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City moves ahead with third water tower

City moves ahead with third water tower City moves ahead with third water tower

Tower will be located on Shattuck St., will improve pressure on north side

The city of Medford is moving forward with a financing plan to build a third water tower and complete additional sewer projects.

At Monday’s committee of the whole meeting, members of the Medford City Council approved plans to build a 250,000 gallon water tower on city-owned land on Shattuck St. The tower ties into the creation of a water pressure zone that will run roughly from Allman St. north.

According to city coordinator John Fales, areas on the north end of the city have been dealing with pressure levels that are near the minimums required by state codes and standards. This is due primarily because of the change in elevation between the south end of the city and as people go north. The new tower will provide close to double the water pressure currently seen in that area and open the door for further expansion on the north side of the city.

The new tower will be about half the size of the tower by the Medford Area Fire Department building and will have a similar internal design to increase water circulation in the tank and reduce the likelihood of it icing up in the winter.

The city’s community development authority (CDA) on May 7 approved moving forward with the project. While the city controls the purse strings for the project, the CDA will handle the planning for it due to it being a project in Tax Incremental District No. 13.

The other project involves the extension of the east side sewer interceptor to Allman St. This will allow the city to remove a fifth lift station in the area and allow for additional growth to the east and north for several decades. The total cost of both projects is about $2.5 million. According to Fales, the request to the city council is to do short-term borrowing not to exceed $2.5 million from a local financial institution with a maximum term of 12 months. This will allow the city to meet the June 7 deadline for expenditures in TID 13 before that TID moves into its payoff portion of its lifecycle. TID 13 includes the Hwy 13 corridor north of Hwy 64 including Walmart, taxes collected on improvements to properties since the creation of the district goes to pay off debt related to extension of infrastructure and other development.

According to Fales, TID 13 has enough increment even with the revaluation of the Walmart parcel to cover the additional projects as well as the existing debt service for the district.

Fales told council members the plan is to roll this short-term borrowing into a larger refinancing of city debt from a 2011 bond issue that is reaching its callable date in October. The city is in a strong financial position relating to debt service and is seeking to tap into its allowed general obligation debt limit in order to secure more favorable financing levels. He noted the 2011 bond is currently at 3% and is set to reprice at 4% next year and they feel the city will be able to get a lower rate in general obligation debt service.

The vote to move forward with the borrowing for the project will be formally approved at next week’s city council meeting. It also kickstarts the city preparing a business development agreement between the CDA and the city for the tower and utility project.

According to Fales, these projects will address long-term city needs for those areas at least until 2040. He noted that while it is possible the city may need additional water capacity due to a large, wet industry coming in or some other unforeseen circumstance, the city is sitting in a good position with the development of existing wells. In addition, the city is looking at developing an additional high capacity well near Pep’s Drive which will be able to produce more than 250 gallons per minute. Fales said the city is fortunate given its location to have the water capacity it does.

Alderman Greg Knight noted that for development purposes water is considered the new gold, with communities that are water rich having an advantage.

In other business, aldermen received the annual audit presented by Dave Maccoux of Clifton Larson Allen, the city’s auditors.

Maccoux praised the city for its strong fiscal and budget management, noting thecity is in a strong financial situation with a healthy fund balance that allows it to do internal borrowing to advance projects in the TIDs rather than having to go to an outside source. This reduces the amount of reserve funds that are spendable, but over the long-term, benefits taxpayers by reducing interest expense.

Maccoux reviewed the city’s audit and found no substantial issues with the totals. The same minor issues were cited including the company preparing the financial statements, which is normal for municipalities the size of Medford.