Hernando aldermen Tuesday heard a proposal by developers of the Hernando West project that in a nutshell would finance a major sewer trunk line to serve approximately 1,000 Hernando residents residents and allow for expansion of the city's sewer service.
Hernando West is the long approved and much anticipated 1,139-acre upscale development located north and west of the city's historic Square.
Hernando attorney Bill Brown, a principal in the Hernando West project, made the presentation before city officials at their regular board meeting. Under the proposal, a maximum of $750,000 could be obtained to construct the sewer on the beginning phase or eastern portion of the project at an interest rate of 2 percent over a 20-year payback period — provided the project receives tax-exempt status through the Mississippi Development Authority. There is a 3-percent cap on the rate of borrowing funds under the CAP Loan program.
"The city could obtain a $750,000 loan at 2 percent for 20 years," Brown said, adding the loan would be paid back with a special assessment on Hernando West property, adding that city taxpayers would not be "out a cent" on the project.
Brown said other cities have benefitted from the CAP Loan process in recent years and Brown views the development itself as a catalyst for economic growth. In essence, Brown said the city is investing in its own future by assisting as the governmental agency making the application for the CAP loan.
"People living in Hernando and would like to come to Hernando should not have to go outside the area," Brown said. "Hernando should not be left behind because other areas that are serviced by utilities can provide for growth."
Brown said that Hernando West has had its sewer line re-engineered so that it can serve its proposed resident population at different stages of growth.
Brown said the special assessment being levied on the lots within the Hernando West development will pay back the loan over time and in the bargain, the City of Hernando will be able to help create a "walkable, sustainable community."
To ensure certain safeguards and protections, Hernando West developers will place a certificate of deposit in the bank to make sure financial obligations are met and pay the first year's payment in advance.
Brown said Hernando West developers are only requesting that they provided with a "level playing field" in their attempt to bring high quality growth and development to Hernando.
"This (sewer) trunk line will belong to the city," Brown said. "It will not belong to Hernando West. All we are asking for, in a nutshell, is to put Hernando West on a level playing field."
Hunter Taylor with the Mississippi Land Bank said the annual payment on the CAP loan would amount to $46,000, paid for by a special assessment. Hernando West developers would bear initially an up front cost of approximately $150,000.
Darell Dixon, Program Specialist with the North Delta Planning and Development District, said the CAP loan process, if approved, would be publicized for four weeks.
Dixon clarified the fact that the City of Hernando would also be eligible for future CAP loan projects.
Ward 3 Alderman Gary Higdon seemed to grasp the fact that neither taxpayers nor the City of Hernando would be asked to fund anything out of taxpayer coffers.
"The big difference is that we're not paying a cent of this out of city money," Higdon said.
Some aldermen were not ready to make a decision on singing onto the CAP loan project.
Tuesday's listing on the agenda was for discussion purposes only.
"This is a major decision to be made," Ward 2 Alderman Andrew Miller said. "I only knew about this a week ago."
"We want to address any issue on the front end," Brown said. "If there is a problem, tell us and we''ll try to find a solution."
"We'll look into it," Hernando Mayor Tom Ferguson said.
Robert Lee Long is Community Editor of the DeSoto Times-Tribune. He may be contacted at firstname.lastname@example.org or at 662-429-6397, Ext. 252