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Approving two U.S. Department of Agriculture (USDA) loans worth more than $10 million, the San Juan Bautista City Council completed the final stage of financing for a wastewater conveyance project.
The loans, totalling about $10.27 million, will help pay for a pipeline project to convey the city’s wastewater to Hollister’s Regional Treatment Plant.
The project is intended to keep the city in compliance with Environmental Protection Agency (EPA) and Department of Water Resources rules, following several years of fines for violations of wastewater discharge regulations.
The loans secure the total funding of the project, estimated at $25.2 million, and will allow the city to close its interim construction line of credit sometime in September. The remainder of the funding, about $14.94 million, comes from various already-secured sources:
- EPA grant: $1 million
- San Benito County contribution: $4 million
- State funding: $3 million
- Surface Transportation Block Grant: $410,000
- U.S. Department of Agriculture: about $6.53 million
According to Dmitry Semenov of Ridgeline Municipal Strategies, limitations placed on loan amounts meant that the money required two separate agreements, one for $7 million and one for about $3.27 million, with a 40-year payback at 2.75% interest. The estimated annual debt service is around $425,000.
Semenov said that, because of the amount of money involved, and in light of the city having only about 2,000 residents, a strategic, long-term financing solution was needed to minimize the impact on the community.
“We tried to get as many outside resources that the residents don’t have to pay back,” he said, “and limit how much of the debt the city needs to take on and how much of the reserves and revenues are used.”
Also during the meeting, City Manager Ashley Collick and the council discussed a proposal for the city to co-sponsor selected events with nonprofit groups to make them more affordable to stage.
“We want to work with our nonprofits in a way that supports the community,” she said, “and also highlight some of the historic events that have happened here and that we want to continue to have happen.”
During public comment, several residents including Credo Studio owner Ramona Hill said that the fees were endangering the ability of nonprofit organizations to hold events in the city.
“For the Mandala project this year,” Hill said, “the sum of the $200 application fee and the $245 public works fee equaled over 20% of my entire budget. The only way I could afford the fees was to decrease my artist pay.”
Councilmember Scott Freels said that while the “whole fee thing has really kind of raised some eyebrows,” the schedule was not something new and had been around for decades.
“It’s not like something we created last night,” he said. “It’s just sometimes people were charged and sometimes people weren’t. So, it’s nice to hear some discussion on this to make it fair for everybody.”
Councilmember Jose Aranda said that he was “huge on making sure that the local nonprofits that support this town are themselves supported,” and suggested that the city pick up some of the insurance costs usually paid by the organizations, as well as using trained volunteers to do some of the work done by city staff.
Councilmember E.J. Sabathia said that his experience with volunteers dealing with tasks such as barricades had been poor and that until there is a strict training program and release of liability forms, it’s in the community’s best interests to allow city staff to do those types of work.
“You know,” he said, “barricades have to be set up, streets have to be cleaned, things have to be removed. Understanding exactly where those fees are going could go a long way.”
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