Lenore Rutherford, The Union Democrat

Tuolumne Utilities District directors declined by a split vote to participate in a statewide program to provide up-front cash for developer impact fees.

The program's purpose, states a staff report to the TUD board, is to spark growth and investment in the local economy. Financing would be provided to a developer through the formation of an assessment district and the issuance of tax exempt bonds which would be paid back by property tax assessments over time - up to 30 years.

The City of Sonora and Tuolumne County have already agreed to

participate in the statewide program. The only difference it makes is

that TUD money will come directly from the developer rather than being

funneled through the county or city via the program.

After hearing a presentation from Larry Cope, executive director of

the Tuolumne County Economic Development Authority, about the purpose

of the program and the fact that TUD would bear no risk, Retherford

said he still believes this opens the way to too much leveraging and

creative financing.

"The banks have tightened up, and rightfully so," he said. "This seems to be a way to go around the conservative bankers."

Balen agreed.

Rotelli disagreed, saying the district would not risk any money and

would be paid out of the fund. "I don't see how we can lose," he said,

" and this will help spur construction."

TUD Director Joseph Day said he was concerned the program is a way

of continuing "the same old policies under another guise" that may have

caused the state's current financial problems.

"I get the part about it not hurting us," he said, "but in the

larger sense, we have a moral obligation to do the right thing and look

at the bigger picture."

Director Bob Behee said it wasn't programs like this one that got

the state into trouble. He said this program requires developers to

have solid credit and to have invested themselves into the project.

This won't cause rampant development, he said.

In a 2-2 vote - Rotelli and Behee voted yes and Balen and

Rutherford voted no - Day decided to abstain, and the motion died for

lack of a majority.

The board met March 14.

Contact Lenore Rutherford at lrutherford@uniondemocrat.com or 588-4585.