The Tracy City Council on Monday received a complete breakdown of the nearly $10 million Phase E project, which will zero in on 20 blocks of town. And it appears residents who don’t live within the project boundaries will be on hook for a portion of the cost in the form of increased utility rates.
The total grant amount will only be about 52% of the project costs; the City had expected closer to 70-80%. This was partly due to overall project costs coming in lower. If the project had cost, say $12 million, the loan amount would have stayed the same while the grant would have increased.
“We expected bids to come in at more than $11 million, and with us getting a bit at just under $7 million, that made the overall cost less, and thus, the amount of the loan was a greater percentage,” City Finance Director Tyler Twistol said.
The City did receive a good interest rate for the $4,667,991 loan (1%), but even so, will still likely have to increase utility rates to be able to service its loan for Phase E.
If the City receives $2 million in bonding from the State, it will likely be used on Hwy. 14 improvements since that project is not included on the City’s facilities plan that was submitted to the Public Facilities Authority. And since it is not on the plan, it does not qualify for funding and will have to be paid for by the City.
It was the recommendation from Bollig to earmark that $2 million — if the City gets it — because the City was not able to include that project in its overall facilities plan that was submitted to the Public Facilities Authority.
“We’re not going to get funding for that through PFA,” Twistol said. “That’s all on us for the infrastructure for Highway 14.”
The estimated total project cost for Phase E is $9,810,000; the estimated loan for the project is $4,668,000; and the total to be assessed is approximately $1,013,000, which leaves a cost of $3,655,000. Initial assessment payments are due next spring with property tax payments. PFA loans and grants are used to finance the improvements. Assessment proceeds, utility revenues, and general levy may be used to pay the PFA loans.
When the loan amount is put into an amortization schedule, it produces an annual payment of $180,876, according to the City. In order to be able to make these payments, the City will need to raise the water portion of utility bills by $3.64 and the sewer portion by $13.11. The proposed rate increases would be spread out over three years — $1.21 per year for water and $4.37 annually for sewer for a total of $5.58 per year.
“We need to increase our rates pretty quickly to be able to cover the loan payments,” said Twistol, who added doing so would benefit the City in future grant funding from PFA for future projects.
Given the consistent annual increase in water and sewer rates in Tracy — it’s typically a 3% annual hike — this bit of information did not sit well with the council, who questioned Bollig on what it could do to keep the burden off Tracy residents.
Zach Bubany, Bollig municipal funding coordinator, said he will look into the issue and do what he can. He said one way to do that would be to study home median income statistics the PFA used to determine rate increases. He will also look into changing assessments (they are now estimated to by $7,500 per property) to adjust for inflation.
The project proposes to reconstruct all 20 blocks of the project area, including the bituminous street itself, the curb and gutter, sidewalks, driveway aprons, and sump pump/roof drainage systems, consistent with recent similar projects the City has constructed. The existing sidewalk throughout the project will be replaced. One block of sidewalk will be added along Union St. between Center St. and 1st St. E. Sidewalk will be installed for half a block on the east side of 1st St. E just south of Hollett St. These sidewalk additions will allow for continuous pedestrian access throughout the project.
Existing carriage walks (sidewalks that extend from a building to the street) will be replaced within the ROW as needed to accommodate changes to the curb and gutter profile. The intersection of 1st St. E and Hollett St. E is not proposed to be reconstructed with this project, as that intersection was recently reconstructed in a separate project.
The existing bituminous pavement is in very deteriorated condition, including areas of pavement that have completely broken apart and are gone. Portions of the street pavement have flat longitudinal or transverse slopes, which does not effectively remove rainwater from the pavement to the curb and gutter. Existing curb and gutter in the project area includes longitudinal slope variations that are not conducive to effective flow to storm sewers, including sagging and heaving due to service trenches and tree growth.
The proposed street pavement will consist of two typical sections, depending on whether storm sewer catch basins exist to serve as an outlet to street subsurface drainage systems.
Approximately 20 blocks of the project will include a drainable base course of select granular material (sand) and longitudinal drain tiles along both sides of the street. Sump pump/roof drain service connections will be provided for properties, which will outlet to the road subsurface drains, eliminating sump pump discharges to the street gutters.
Emory St. and State St. east of 2nd St. E do not have outlets available for subsurface drainage, so the street section will not include a drainable base. Sump pump/roof drain services for these properties were installed in previous phases or will be installed in a future phase.
Construction will begin this July, and the project’s completion date is set for Sept. 2028.
