Salt and marijuana mine producers push Bay City to consider utility deposits for big business

BAY CITY, MI – Several new businesses coming to Bay City have city officials looking for ways to financially prepare for losses due to the possibility of unpaid utility bills.

During its virtual meeting on Tuesday, January 19, the Bay City Commission chose to host two prescription changes for a first read that deals with setting up deposits for commercial utility customers who are expected to incur monthly bills in excess of the $ 50,000 threshold. The changes to the ordinance will be presented at the next committee meeting on February 1 for a second reading and possible adoption.

“We have very large commercial and industrial accounts and we are very concerned about protecting the utility if they last for, say, three months, it could be over $ 150,000 that they owe us that we are not in. able to recover one way or another, ”said City Manager Dana Muscott.

the first amendment modified Standard rules and regulations governing electrical service for 2021, which give the city the option require large commercial or industrial customers to make a deposit not exceeding three times the estimated monthly invoice, depending on the agenda item. Meanwhile, the second amendment clarifies the grounds for a deposit to ensure payment by Bay City utility customers who have an unsatisfactory, incomplete or nonexistent credit history.

“It can take 30 to 60 days for someone to shut down,” said Jay Anderson, director of Light and Power. “In the meantime, you might have accounts that have a bill of $ 100,000, $ 200,000 a month and continue to accumulate them. It’s really about protecting both parties and ultimately protecting all other taxpayers in town. “

Anderson said the city currently has 2 commercial utility customers who exceed the $ 50,000 mark on their monthly utility bill. However, he said there is a possibility for anywhere from 5 to 10 or more large business customers to come to town in the years to come.

“So it’s not so much the past, but rather the prerogative of the future,” he said.

Commissioner Kristen Rivet asked what type of businesses the city expects to see an influx. Anderson responded that some of the energy-intensive businesses that are coming in are marijuana grow operations, but he stressed that the changes affect business customers in all industries and that the changes do not target any specific industry.

Anderson also referred to a brining operation where Wilkinson Minerals plans to drill 4,000 feet below Bay City in a giant reservoir to pump 450 gallons per minute of salted brine.

“One of them is obviously the salt facility that we talked about and I don’t expect any credit problems at all,” he said. “And the others are a big part of the grow facility … I’m not pointing them out by saying there’s a problem with them, I’m just saying that’s why we’re putting this in place so that we have the ability to check their credit and make sure everyone will be able to pay their bills. “

The Bay City Commission had already taken steps to approve the major marijuana grow operations that have set their sights on Bay City. The commission approved an application in a virtual meeting on December 21, 2020, for an interim medical marijuana facility license to Area Capital LLC to operate a production facility at 2 Johnson Court. The location is near Woodside Avenue.

According to at the request submitted to the cityArea Capital paid an application fee of $ 30,000 for six licenses in total – five Class C cultivator licenses and one processor license. Each license has an annual renewal fee of $ 5,000 each. A Class C license allows a grower to have up to 1,500 plants per license.

On October 5, 2020, the City of Bay Commission also approved a request for an industrial facility tax exemption certificate for Shango Park Bay City Inc. to enable the company to rehabilitate a vacant 24,800-foot building. squares located at 1601 Garfield. The approved IFT is for the total amount of $ 7 million over 12 years.

According to at the request submitted to the cityArea Capital paid an application fee of $ 30,000 for six licenses in total – five Class C cultivator licenses and one processor license.

On Tuesday, the city commission approved a Class C adult producer license for Golden Harvests at 333 Morton Street.

Anderson explained that the proposed changes are also designed to give trading clients options to provide a deposit or ensure their creditworthiness with three main avenues available.

“If they don’t want to pay cash up front, they can get a letter of credit or finally agree to an expedited payment term,” Anderson said.

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