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CDA OKs TID financing of city water tower

CDA OKs TID financing of city water tower CDA OKs TID financing of city water tower

Plans for a third city of Medford water tower to improve pressure for the city’s north side and open the door for future expansion moved forward this week.

Members of the Community Development Authority on May 7 approved plans to move ahead with the tower project as included in the tax incremental district (TID) No. 13 plans.

The city has until June 7 to commit to new projects in TID 13, after that point, the district enters into a repayment period where increment can only be used to pay off existing projects.

In TIDs, the taxes collected on improvements to the district are retained by the city and used to pay for infrastructure and other improvements that would assist in development occurring. TID 13 snakes along Hwy 13 and includes the Medford Walmart as well as other retail businesses. It is the only city TID that is still able to take on new projects.

The proposed water tower has been in consideration for some time, with the CDA discussing it at the January meeting. However, since that meeting the location of the proposed tower has moved.

According to city coordinator John Fales, the proposed tower will be built on city-owned property behind Well No. 10 located on Shattuck St. about 1,000 feet north of Allman St.

When built, the tower will hold about 250,000 gallons making it about half the size to the water tower by the fire hall. Fales explained that the city has been working on improving the water pressure for the north side for some time. Plans call for the creation of a separate pressure zone for that portion of the city which will have valves connecting to the rest of the city in the case of emergency.

Because of elevations to the north of the city, businesses and individuals seeking to connect to the city water system in that area are facing low pressure. This can also have an impact on fire protection in that portion of the city.

Currently pressure at Shattuck St. and Allman St. is between 35 and 37 psi, when the new tower is built, the pressure will be at 69 psi.

In addition to a new water tower, Fales has proposed the CDA move forward with the final phase of the east side sewer interceptor project. This has been a longterm project to install an interceptor sewer main along the east side of the city from CTH O to Allman St. Through previous projects in the last six years, the city had gotten as far as Hwy 64 and the plan is to get to Allman St. and eliminate the need for lift stations in that area.

Unlike sewer mains which are pressurized, sewer mains flow by gravity through gently sloping mains. The further away from the treatment plant, the more shallow mains become. There is a limit though and in areas lift stations are used to pump waste into the system. Lift stations are costly to maintain and prone to failure, which can lead to backups. A sewer interceptor is a larger, deep main that flows to the wastewater treatment plant.

The price tag for both the tower and the sewer extension is abut $2.5 million. Fales explained the city would initially borrow the money using general obligation debt loans and then roll it into refinancing outstanding bonds issues.

The CDA is the planning body set up when TID 12 was created and later was given authority over TID 13 projects. If approved by both the CDA and the city council a business development agreement would be drafted. Approval of that agreement would have to be in place by the June 7 deadline.

Fales noted that other than the location of the tower, the projects have not changed from what was brought to the CDA earlier this year. “The idea hasn’t changed, just the location,” Fales said.

CDA chairman Dave Koester questioned if the CDA would be “out of business” after this project was completed.

The CDA was originally created as a financing tool because when TID 12 was created nearly two decades ago, the city was close to its borrowing capacity and the CDA was able to issue revenue bonds to cover the infrastructure cost. The city has since significantly improved its debt situation and grown. The city currently has about 80% of its debt capacity available and is looking at closing five of its existing TIDs between 2022 and 2023. State law sets a maximum of 12% of total equalized value that can be in TIDs in a city, with the closure of other TIDs, the city could have the capacity to develop an additional TID in the future if a project presented itself. It is likely that the city would utilize the CDA at that point.

CDA members voted to approve moving ahead and drafting a business development agreement for the water tower and sewer extension work.