2014.04.08 EDA Agenda Packet - Laserfiche WebLink

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Communities are strongly encouraged to: Consider which staff will be responsible for authorizing SAC deferrals and what the process will be to implement site specific deferral arrangements as are allowed under the Agreement with MCES; Consider the need for policies or ordinances around your agreements or arrangements with business and property owners (in some cases those parties may have different interests); Consider in advance how to react if a business fails to pay, which will not relieve the community of its deferral payment obligation to MCES, unless the business closes and as described below; and Review the Agreement with involved community staff and legal advisors before signing. Please note that this program is offered only as described in the Agreement; MCES does not anticipate changing it. Once the Agreement is executed, SAC reporting staff in your community must also attach the MCES SAC -E form with monthly SAC reporting for each qualified business for which the community is allowing the deferred SAC payment. Each deferment liability will be effective the first day of the subsequent month (e.g., for an April building permit that is due and typically reported in May, interest will begin accruing June 1). Principal on the deferred amount will be amortized monthly at a fixed interest rate based on MCES' average cost of debt (per statute). MCES' average cost of debt, computed on December 31 each year, will be used as the interest rate for all new deferrals entered into the following calendar year. For example, the average rate was 2.28% on 12/31/12, so all deferrals originating in 2013 uses that rate, and the rate was fixed for the duration of each individual deferral started in 2013. For 2014 the rate for new deferrals is 2.26%. Near the end of January each year, MCES will provide the new interest rate (for deferrals started in the new calendar year) to participating communities. If a participating business completely closes, the community has an option to discontinue making deferral payments to MCES. If this option is chosen, it requires a notification to MCES with a certification of the business closing. In this situation, the site will not be credited with the unpaid wastewater capacity (for future SAC determinations), but will get credit for each SAC unit paid. No payments will be refunded and no net credits will be transferrable off the site (unless and until a redevelopment requires less wastewater capacity, as on any site). Alternatively, for each such business closure, the community has the option of simply finishing the payments to MCES, which will result in full SAC credit for the next use of the site. Late payments on deferrals will incur an additional administrative charge of 2% per month plus the maximum interest allowed by law. SAC Deferral Example #1: 1. Community signs SAC Deferral Agreement in October 2013, establishing basic deferral terms including maximum amount deferred (e.g., 80%), standard community deferral length (e.g., 5 years), and the payment timing requested (e.g., billing only on anniversary of Agreement). 2. An 8 -SAC unit business is permitted February 2014. On the SAC Activity Report for February, the community chooses a deferral and: a) Pays 20% of the SAC for the site = 8 X 20% =1.60 X $2485/unit [2014 SAC rate] =$3976 2