The Hollister City Council is set to consider approving a bond
issuance for the city’s redevelopment agency
– of up to $20 million – at a special meeting Monday.
HOLLISTER
The Hollister City Council is set to consider approving a bond issuance for the city’s redevelopment agency – of up to $20 million – at a special meeting Monday.
Although the bond issuance would not exceed $20 million, the city is “only projecting about an $8 million issue,” said Bill Avera, director of development services for the city.
“When you start the (bond) process, you put in an amount not to exceed,” he said. “(It) lets everybody know that it won’t exceed that amount.”
The last time the city issued a bond for the RDA was in 2003 for $35 million. There was another bond issue on the table last year for $25 million, but officials stopped it “because we wanted to get a better handle on what the rates were doing and what the revenues were doing,” Avera said. Additionally, he noted that the RDA’s tax increment wasn’t at the same levels as in the past, while officials have had uncertainty about the state, which divvies out property tax funds.
Avera explained further that having the dollar figure so high is a “financial tool” to show the city has the ability to exceed the arranged bond amount if necessary.
He noted that RDA bond issuances, no matter the amount, do not require voter approval. He also contended it does not cause an increase in taxes because, he said, “RDA bonds work differently than other bonds.”
“Redevelopment agencies are set up to be in debt – required to be in debt,” he said. “We get that way from the issuance of bonds.”
The loan is to tear down and rebuild Hollister Fire Station No. 1 along with landscaping at the city’s western gateway, Avera said. If the bond is approved, the fire station would receive $5 million for the project and the west gateway project would receive the remaining $3 million.
While Hollister Fire Chief Fred Cheshire said the fire station has been “sufficient over the years with upkeep,” Avera also pointed out that the building wasn’t constructed for that purpose and is “dilapidated.”
“If you think that the fire station is adequate right now, that could be an opinion that many people have,” Avera said. “We all have to remember that it wasn’t built as a fire station – it was built as a tractor repair shop and it has been modified to work. It’s dilapidated and shouldn’t be there now.”
One of the reasons that the RDA has chosen to put money into the west-side gateway improvement project is because the area is the city’s biggest unused plot of land, he said.
“Developing that would increase the tax increment. There would be a huge economic benefit there,” Avera said.
If both of the projects go under budget, any leftover money would go toward road repairs in the city. The RDA has spent almost $7 million on roads over the past few years, according to Avera, but it is not the responsibility of the RDA to fix roads.
“(The RDA’s job) is not necessarily to maintain roads,” Avera said. “It’s not intended for the general maintenance of general government duties.”
The city council meets at 6 p.m. Monday in the council chambers at city hall, 375 Fifth St.
