FOWLER – The city of Fowler is following through on key points of discussion following the most recent council meeting.
On May 19, the Fowler City Council moved forward with two returning items, the first being a loan for the ongoing police department and senior center project, and the second being a reintroduction of the city’s tobacco retail ordinance.
After some discussion on both items, the council ultimately approved staff to move forward with a $7 million drawdown loan for the police department and senior center, and approved the first reading of the tobacco ordinance with previously requested changes. The council voted 3-0 on both items, with Councilmember Daniel Parra being absent.
Police department and senior center
Bringing the item back after the April 21 city council meeting, Finance Director and Treasurer Nancy Banda sought direction on the specific amount that the city should apply for through a Rural Community Assistance Corporation (RCAC) loan.
With an estimated $5.6 million in expenses left on the project, the loan will help provide a financial buffer to cover those costs without draining city funds. The city will be pursuing a drawdown finance structure with the loan, which means that money will only be pulled as needed, and interest will only be paid on the amount of money pulled.
According to the staff report, preliminary discussions project the interest rate to be around 1% for the first three years, and 5% after that. The loan is to be paid through Measure N — a 2018 measure to help fund the new police department and equipment — which Banda said has been generating around $1.8 million annually.
During the council’s comments, Councilmember Karnig Kazarian spoke in favor of applying for the full $10 million available from RCAC, but aiming to pay within a five-year term. Mayor Pro Tem Amarjeet Gill followed by echoing her previous distaste for loans, and suggested the city instead apply for only the approximate $6 million needed to cover construction costs.
Kazarian then argued that since the city would only be paying interest on the money that’s drawn for the project, there wouldn’t be any disadvantage to going for the full amount. He also said that if the project resulted in unexpected costs, having more flexibility could be advantageous.
“It would actually be a positive, because having to go through a loan process, especially with this RCAC, would be difficult if we run into a problem with cost overruns,” said Kazarian in his comments. “The ability to have that money available, and to be able to draw that if needed, that’s a huge advantage.”
Mayor Juan Mejia spoke next, and seconded Gill’s approach of taking on a smaller loan that closer fits the projected end costs. Mejia noted that since the police department and senior center is already aimed to open in early October, he doesn’t foresee any substantial overrun costs.
He expressed comfort in the range of up to $6 million that Gill suggested, worrying that anything higher would open up the possibility for other uses.
“My fear is we pull $10 million, then we find other uses for it,” said Mejia in the discussion. “I don’t want to put us in debt as a city, and for me, a very rare chance of a cost overrun — that’s the reality.”
Banda later clarified for Mejia that since the council only approved the police department and senior center, the loan would not be open to being used for anything else. Later in the discussion, City Manager Michael Reid added that even when money would be pulled for this project, it would first go to council for approval, adding another stopgap to ensure responsible use.
Mejia then asked Banda directly for her opinion on an appropriate loan amount, to which she said a $5 million loan would be “responsible.”
“What we said was $17.5 million for the project, and currently we have about $5.6 million to go, so that would be my suggestion, but it’s up to the council.”
With Banda’s input, Mejia then suggested $7 million as a compromise, giving some buffer beyond the $5 million while not going all out on a $10 million loan. Gill made a motion for $7 million, and the council approved with the added direction of staff also looking into potential prepayment penalties on the loan.
Tobacco ordinance
Also returning from the April 21 city council meeting was an ordinance to update the city’s tobacco retail regulations, presented by Community and Economic Development Director Matthew Flood. The ordinance was drafted in collaboration with a division of the Fresno County Department of Health that promotes anti-tobacco policies, and is being done with an emphasis on reducing or preventing tobacco use among youth.
Among other regulations, the ordinance brings updates to the municipal code which include: a minimum distance of 1,000 from youth-oriented facilities and other tobacco retailers, prohibition of tobacco sales in pharmacies or cannabis retail locations, detailed packaging guidelines and more.
Although the council was mostly onboard with the ordinance during the first meeting, Mejia and Gill raised concerns about how the original draft’s proposed limit to tobacco retail licenses within the city would affect incoming businesses.
After that first meeting, Flood worked with county staff to look at how other cities implemented a license cap, if at all, and found that many cities do not have one. Flood told the council that the county was more open to removing this section from the original ordinance after learning more about Fowler’s “business-driven” environment, and about how the freeway affects local commerce.
“They don’t want to lobby, they want to really do what the communities want to do, which is awesome,” said Flood to the council.
Also removed from the original ordinance was language regarding the prohibition of online sales, pricing guidelines and inspection mandates, with these changes being made due to enforcement of this nature being deemed impractical.
Flood noted that county staff raised concerns about removing some of the sections relating to enforcement, but said he assured them that tobacco use is a high priority for the Fowler Police Department. Flood also alluded to the potential for Fowler PD to collaborate with other law enforcement agencies when possible to conduct operations.
“Anything removed in no way will hamstring or limit the ability for Fowler PD, or any other law enforcement agency, to enforce these provisions and anything else related to it,” Flood said.
After the brief presentation, the council had no comments because of the lengthy conversation that already took place at the March 21 meeting. After a motion from Mejia, the council voted to approve the first reading.
The ordinance is expected to return at the next council meeting for the second and final reading.
