Chapter 3.61
SEWER SERVICES LOAN PROGRAM

Sections:

3.61.010    Sewer services loan program.

3.61.010 Sewer services loan program.

(1) There is established in the city a new program to be known as the “sewer services loan program” (“program”). The finance director of the city is hereby authorized to transfer $250,000 from the sewer operations fund to the sewer services loan fund in order to administer the program. Disbursement of funds from the sewer services loan fund shall be made in the manner as provided by law.

(2) Moneys allocated to the sewer services loan fund are to be used exclusively to provide loans for city of Longview commercial wastewater customers, whether located inside or outside the city limits, licensed and operating on June 14, 2012, to purchase and install materials and equipment that help conserve conveyance and treatment infrastructure in the city’s and the Three Rivers Regional Wastewater Authority’s sanitary sewer systems and/or reduce pollutants in discharges to the wastewater treatment plants serving city customers.

(3) Except as provided by law, loans shall be secured by a lien against the benefited property or business or a security interest in the equipment benefited, and the sewer services loan fund shall be sustained by borrower payments, which shall include reasonable interest and administrative charges. The finance director shall determine and administer the policies and operation of the sewer services loan program.

(4) The city manager is authorized to implement any and all remedies to collect the payments for the loans, which may include foreclosure of the liens and/or security interests, as well as terminating sewer service to the premises.

(5) In order to qualify for a loan under this section, the business owner must complete a credit application and pass an appropriate credit check. The city reserves the right to exercise reasonable business judgment and to disapprove any loan based upon a credit check, at the city’s sole discretion. The application must be accompanied by a nonrefundable application fee in an amount set forth below.

(6) The terms of the loan shall be as follows:

(a) The nonrefundable application fee shall be $100.00 per loan requested.

(b) The maximum amount of each loan shall be $20,000.

(c) The loan will be structured as a simple promissory note.

(d) The term of the note shall not exceed 10 years.

(e) The note will bear interest at the rate of six percent or the city’s current investment yield at the time of the loan plus a margin of five percent, whichever is greater; plus a one percent margin to cover administrative costs over the loan period. The interest rate shall be fixed for the term of the loan.

(f) The loan will be secured by an interest in the property. The property interest may take the form of a lien, a deed of trust, or such other instrument as may be acceptable to the city finance director and city attorney. Alternatively, security interests will be taken on available assets, both business and personal. These may include liens on fixed assets (land, buildings, machinery and equipment, etc.), inventory, receivables, assignment of patents and licenses, and other available assets of the borrower. Personal guarantees may also be required from principal owners, as appropriate.

(g) The note shall provide for acceleration of the principal upon default in any payment. In the event of default, the city shall have all available remedies, including, but not limited to, foreclosure of its interest in the property, notification of credit bureaus, use of collection agencies, and terminating sewer service.

(h) Loan principal and interest charges will be billed by the city and due monthly. Appropriate penalties may be imposed by the city for delinquent accounts, as established in the promissory note.

(i) There shall be no penalty for prepayment.

(j) The note will contain a due on sale clause which provides for payment in full of all outstanding principal and interest upon sale of the property or the business. (Ord. 3213 § 1, 2012).