Hollister City Manager Brett Miller said the current debt for wastewater bond is approximately $60 million. Photo by John Chadwell.
Hollister City Manager Brett Miller said the current debt for wastewater bond is approximately $60 million. Photo by John Chadwell.

Four Hollister City Council members voted unanimously (Councilman Rick Perez was absent) to adopt a resolution to “defease,” or void, $5 million in 2016 bonds on the city’s balance sheet.

City Manager Brett Miller told the council the defease move was being made to pay down some of the bonds. 

“This will help us get our utility rates down and lower future wastewater fees to our citizens,” he said. “There will be an estimated savings of $481,717 per year. I just want to remind everyone that since I’ve been here wastewater charges have not gone up. They’ve actually gone down.”

Miller told BenitoLink, “This is one of the steps to lower the wastewater rates. We are currently having the rates studied as to where the new rates should be going forward. We are trying to get these implemented as soon as possible.”

Miller did not specify when the new rates may be adopted. 

He said 15 years ago the debt was $120 million. The current debt is approximately $60 million, and the defease would reduce it another $5 million. Mayor Ignacio Velazquez clarified the money would be moved into a separate account to ultimately be used in June 2023 to pay down the debt.

In March 2016, the Hollister Joint Powers Financing Authority issued its $67.97 million Wastewater Revenue Refunding Bonds, Series 2016, which were secured primarily by installment payments payable by the city of Hollister from the net revenues of the wastewater enterprise, according to city documents.

The Wastewater Fund has sufficient funds to make the $5 million early bond call with respect to the 2016 Bonds maturing on June 1, 2037, city documents state. The first date the bonds may be redeemed is June 1, 2023. Prior to this date, funds will be held in an escrow fund. Defeasing and optionally redeeming these bonds will reduce the obligations of the Wastewater Fund and save the city interest costs.

The item was approved without further City Council discussion. 

Miller also said the city is conducting a rate study and securing funding to improve water lines.

South Street between Washington and San Benito Streets has been closed for about a week because of a water main break. 

In 2021 Henry Gonzalez, Hollister’s interim public works director told BenitoLink nearly 100-year-old cast iron pipes run beneath Fourth Street, from San Benito Street across a fault line, all the way to the bridge crossing the San Benito River. It’s unknown how much cast iron pipe is still in place throughout the city.

Gonzalez previously told BenitoLink that between 2017 and 2020 there were 39 water main breaks throughout the city, an average of more than one a month. 


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John Chadwell worked as a feature, news and investigative reporter for BenitoLink on a freelance basis for seven years, leaving the role in Sept. 2023. Chadwell first entered the U.S. Navy right out of...