The East Bethel City Council April 17 approved a utility infrastructure loan fund program to assist businesses that will soon be required to connect to the city’s new water and sewer system.
Costs that these businesses are facing include a $2,000 sewer access charge (SAC) per equivalent residential unit (ERU), a $3,600 water access charge (WAC) per ERU, plus a $2,600 SAC charge from the Metropolitan Council Environmental Services (MCES).
The number of ERUs assigned to a business is determined by the MCES based on business type, anticipated peak water usage, building size and other factors. Some of the affected businesses are assigned up to four ERUs.
In addition, businesses will incur various additional costs for private lateral lines, water meters, private sewer abatements and inspection fees, said Community Development Director Colleen Winter.
The loan program would operate through the city’s Economic Development Authority and provide loans of up to a maximum of $37,800 for each qualifying business that applies.
To be eligible for the loan program, applicants must be located in the city’s municipal utility infrastructure improvement area and must be in good standing with the city in paying all property taxes and applicable city licenses. They must also pay a $200 application fee and a $300 escrow fee.
The East Bethel Housing and Redevelopment Authority (HRA) will loan the city’s Economic Development Authority (EDA) $281,400 as seed money to create the loan fund. The city would repay the HRA as loan repayments are collected from borrowing businesses at an interest rate of 4 percent.
Councilmember Heidi Moegerle asked City Attorney Mike Vierling how well protected the city would be in the case of a borrower defaulting.
According to Vierling, the city would not be subordinate to any mortgage or secondary lien on the property, but instead would be “at the top of the list” to recoup its money by assessing it to the property.