Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Dwr Clean Water Loan topic
No spam. Unsubscribe anytime.
City committee hears DNR loan update; administrator says code change could save $268,957 over 20 years
Summary
Administrator Hutchison told the Joint Committee of the Whole that Seymour’s current industrial-discharge language prevents it from qualifying for the DNR’s lower 2.2% loan rate; staff will draft a Municipal Code amendment to pursue the lower rate and avoid roughly $268,957 in extra interest over 20 years.
Administrator Hutchison told the Joint Committee of the Whole on Feb. 10 that the city’s pending application for a DNR Clean Water Loan faces a rate obstacle tied to the municipal industrial discharge agreement.
Hutchison said the DNR’s advertised quarterly interest rate is 2.2%, but Seymour does not qualify because the city’s agreement with its sole dairy discharger contains an “exclusive” rate provision. "Our rate as things currently are would be 2.472% which would be and additional cost over the 20-year term of $268,957 in additional interest," Hutchison said. That higher rate, Hutchison explained, reflects taxability concerns the IRS would raise if special, exclusive rates were offered to a single industrial discharger.
To address the gap, Hutchison said city staff will prepare an ordinance to amend Municipal Code Sec. 74-152(c)(1)(d) to create a user-classification specific to the dairy industry so the city can qualify for the lower 2.2% loan rate. Hutchison told the committee the DNR processes loan documentation in about eight weeks after it receives complete paperwork; staff will present a draft ordinance to City Council at a later date.
Why it matters: the difference in the loan rate is not just bookkeeping. Hutchison quantified the long-term cost of the higher rate as approximately $268,957 in additional interest over a 20-year loan, which would affect the utility fund and could influence future sewer rates or capital planning.
The committee did not take final action on the loan at the Feb. 10 meeting; Hutchison framed the next step as drafting the ordinance amendment and returning with the formal document for Council consideration.
