Financing confirmed for infrastructure

$8.4M loan, $4.5M grant

By Seth Schmidt

An announcement from U.S. Dept. of Agriculture last week made official what City of Tracy officials had been promised last summer: Rural Development has committed an $8.4 million loan and a $4.5 million grant for on-going sanitary sewer, storm sewer, and water main improvements planned in Tracy.

Rural Development representative Jeff VanBuren informed the Tracy City Council of the likely funding amounts in July.  Last week’s announcement from State Rural Development Director Jeff Finstad confirmed the funding.

The federal financing will help pay for an estimated $21.3 million in infrastructure improvements that are planned in Tracy over the next five years.  A Minnesota Public Facilities Administration grant of  $3.4 million has also been allocated for the improvements.

Four separate projects are envisioned, with the first likely to begin in 2019.

Once the $21 million package of improvements is completed, engineering plans call for additional infrastructure improvements years into the future.  The estimated price tag for all proposed Phase 3 projects now stands at about $39 million.

Engineers and city leaders say the improvements are needed to replace deteriorating underground pipes and reduce clear drainage water entering the sanitary sewer system.  Tracy has historically had problems with clear storm water overwhelming the sanitary system during periods of high run-offs, such as what is triggered by a heavy rain or rapid snowmelt.

Construction for “Phase One” in Tracy’s long-range infrastructure improvement plan was conducted in 2017.  Those water and sewer improvements excavated streets from roughly Central Park to Circle Drive and Fourth St. East, and mandated that all private drainage connections to the sanitary sewer be disconnected and put onto the storm sewer.  Outlet pipes leading out to the city’s new sewage lagoons were also included in the 2017 construction.

“Phase 2” consists of new sewage lagoons being built northeast of the Tracy Airport and Calvary Cemetery.     Completion of the $5.4 million sewage pond project is expected next year.

Jan. 14 hearing

The first portion of what’s been termed “Phase 3” improvements will involve Third St., between Hwy. 14 and South, and roughly one block east and west from Third.  The estimated cost of the Third St. project is  $6 million. A public hearing on the Third St. project is scheduled Jan. 14, with an open house for property owners set for Jan. 15.

Subsequent segments of the $21 million plan include

• Fifth St., between Rowland and Hwy. 14.

• North, Easy, and Otis streets, a portion of First St. East, and Center between Hwy. 14 and East Morgan.

• Park St., Rowland and Morgan east of Second St.,  Hunter St., Second between Morgan & South.

• Fifth, between Morgan & South.

This work comprises about half of the $39 million in long-range Phase 3 infrastructure improvements that engineers have recommended.

40-year loan

The $8.4 million loan would be repaid over a 40-year period at an interest rate of 2.37%.  Revenues generated by city utility customers are expected to fund the repayment.

The federal Rural Development and state Public Facilities grants would not need to be repaid by local taxpayers.