Hollister staff members are developing a program for
city-financed loans designed to ease sewer impact fees on
commercial businesses. The staff outlined the new program at the
Dec. 21 meeting, where the council directed the staff to
investigate the possible application to new, as well as
established, businesses.
Hollister staff members are developing a program for city-financed loans designed to ease sewer impact fees on commercial businesses.
The staff outlined the new program at the Dec. 21 meeting, where the council directed the staff to investigate the possible application to new, as well as established, businesses.
Several local businesses are facing large impact fees as they eliminate the temporary waste holding tanks they used during the building moratorium and connect to the city’s sewer system, as required. According to the staff report, current economic conditions make it difficult for some business to pay these fees in a lump sum. The changeover was part of the agreement that allowed them to open and operate during the state-mandated building ban from 2002 through 2008, caused by the failure of the city’s wastewater plant.
The proposal is to make long-term loans available to commercial properties that have impact fees of at least $20,000. The interest rates would be set to ensure that the city and ratepayers are fully reimbursed for carrying the loans.
They would cover the current bond interest, the cost of issuing the bonds, the cost of carrying the loans and an administrative cost for processing and servicing the account. The loans would be secured by liens on the commercial properties’ loan payments with interest and would be collected along with the regular sewer bill.
City Manager Clint Quilter pointed out that under the new impact fee schedule, some businesses are facing lump-sum impact fees of $150,000.
At this stage, the city has yet to detail several factors. These include the length of the agreements, the source of the loan funds and the possibilities of variable interest rate components designed to compensate for changes in future economic conditions.
