By Seth Schmidt
How much proposed Phase 3 sewer, water, and storm sewer improvements will cost—and how the project would be paid for—is coming into focus for Tracy.
A report presented to the Tracy City Council Monday, projects a $21.3 million cost for a series of infrastructure projects that could begin next year.
Federal and state grants totaling $7,858,000—which would not have to be repaid by Tracy taxpayers—would cover 27% of project costs.
A federal Rural Development loan of $8.4 million, repaid over 40-years at an interest rate of 2.37%, would cover 39% of estimated costs. Revenues from water, sewer, and storm water fees, with some rate increases, would fund the loan repayments.
The remaining $5 million of estimated expenses are not eligible for Rural Development funding. Some combination of city property tax levy and special assessments would be needed to cover funding gaps not covered by utility fees.
The council held a special meeting Monday, in order to meet a Rural Development funding application deadline. After hearing a review of the project from Rural Development representative Jeff VanBuren, the council authorized a “letter of intent” for the funding application. VanBuren said the letter does not obligate the city to anything, but would allow Rural Development to set money aside for the Tracy project. Rural Development not allocated for Minnesota projects, would have to be released for projects in other states.
For more on this article, see this week’s Headlight-Herald.