BERLIN- In spite of mixed opinions among officials, the Berlin Town Council this week approved a new EDU financing policy.
On Monday, the council voted 4-1 to approve a resolution establishing a formal EDU (equivalent dwelling unit) financing policy. It will permit the town to finance EDU charges for projects requiring fewer than five EDUs.
“We’re trying to encourage the smaller projects which, frankly, are quite compatible with our community,” said Mayor Gee Williams.
While the town has agreed to finance EDU charges in the past, the resolution considered Monday formally outlines the process. It states that property owners may ask to finance up to five EDUs per project over a period of up to five years with an annual financing charge of three percent. The resolution gives applicants whose requests to finance are denied the opportunity to have the mayor and council review that decision.
“The mayor and council from time to time have approved requests from individuals interested in financing EDUs,” Town Administrator Laura Allen said. “What this policy does is codify that practice and reinforce your preference to finance EDUs for smaller projects.”
She said staff recommended adoption of the policy to make sure all financing situations were handled the same.
“The goal of this is to ensure consistent application of the policy across all requests,” she said.
Williams pointed out that the policy was also geared toward small projects because those suited the town. He said that, in general, small projects were often harder for developers to finance.
“This evens the playing field a bit,” he said.
Councilman Zack Tyndall questioned the three-percent financing charge. Allen explained that if the town wasn’t financing the EDUs, a property owner would go to a bank, where they’d also face financing charges.
“In the interest of protecting the town, it makes sense to cover the administrative cost,” she said.
Tyndall suggested using the prime rate charged by banks rather than setting the rate at three percent. Allen said a flat rate was easier for town employees to work with. Councilman Troy Purnell asked why the resolution defined small projects as those requiring fewer than five EDUs.
“The idea was to encourage small projects,” Allen replied. “I have some professional hesitation with the town financing EDUs for large developers.”
Purnell, a developer himself, disagreed.
“It’s an arbitrary number,” he said. “I don’t see the reason for limiting it to a number.”