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Employee home loans a good investment for city

How much is a reliable, long-term city employee worth?

How valuable is stopping the revolving door of recruiting, replacing and retraining? What if newly trained employees did not take off for greener pastures after a year or two and instead continued their careers with the agency that taught them?

The Sonora City Council, with a new home loan incentive program, has made it clear that it puts a high value on longevity and experience. At the recommendation of a committee that studied the issue for a year, the council has voted to offer seven $15,000, five percent home loans to eligible employees beginning next month.

For a first-time home buyer, the cash could help meet a down payment and make the difference between buying and renting. And as soon as the decision is "buy," the employee becomes invested in the community and much more likely to stay.

But the low-interest loan is not the end of the program: After five years, the loan will be forgiven at 10 percent annually until it disappears altogether after another decade.

At that point, the city will have a 15-year police officer, firefighter, planner or clerk who knows the job and its turf well, is likely raising a family, and may well be ready to finish his or her career in Sonora. That employee will, in turn, have an appreciating home that may have been out of the question had it not been for the city's incentive program.

Over the program's 15 years, the cost per employee completing the program and having a loan forgiven will be $1,000 a year.

The one-time cost of recruiting, background checking and training a new police officer, the city has estimated, is $5,000. And that does not include up to $25,000 in salary and benefit costs a recruit may be paid during the six-month training period.

If the loan incentives do indeed keep employees on the job, the investment will be a bargain.

What's more, the $105,000 in cash that will be loaned to qualifying employees is in state grants made to the city in the late 1980s and early 1990s for home-rehabilitation loans. This hard-working money has already been loaned and paid back more than once and is now free of state strings.

And it has no effect on the city's ongoing Homebuyers Assistance program, which provides up to $100,000 to low-income families for purchase of homes in Sonora.

Although only time will tell if the program is successful, early indications are positive. City Administrator Greg Applegate said several firefighters and police officers have already asked about the loans.

But not everybody is eligible: To qualify, employees must work full-time and not have owned a home in three years and buy property within two miles of the city. If a worker leaves or is fired, the balance of the loan must be paid back immediately.

"The goal here is to keep our homegrown talent at home," said Applegate, himself an 18-year city employee.

In many ways, the loan program is a second step toward meeting this goal.

Measure I, a half-cent sales tax which annually generates $1.2 million for the Police, Fire and Public Works departments was the first. Passed by nearly three-quarters of Sonora voters in 2004, the measure brought almost immediate raises for police officers and firefighters and slowed what had been chronic turnover.

Sonora is not the first city to offer home loan incentives, but in the foothills the program is unique. Both the City Council and former Mayor Dave Sheppard's committee should be commended for suggesting a creative, innovative program that addresses both affordable housing and workforce stability.

Union Democrat editorial positions are formed through regular meetings of the newspaper's editorial board — Publisher Geoff White, Managing Editor Patty Fuller and senior reporter-columnist Chris Bateman.


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The Union Democrat 05/02/15

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