Will save more than $750K on Phase E costs; council sets preliminary levy at 8%
Paying for the current Phase E infrastructure project just got a lot easier for the City of Tracy.
Tracy City Administrator Je Carpenter was notified last Thursday that the City had a chance to save more than $750,000 on the project. But the council had to act fast. Because a decision on loan options had to be made right away and everything signed by noon last Friday, a special meeting of the Tracy City Council was called Thursday so the council could vote for either a 20- or 30-year loan that would accompany a Public Facilities Authority clean water/drinking water grant.
“As of (Thursday) morning, we got a note (from PFA and Bollig Inc.); our debt load was looked at, and they gave us until noon (Friday) to go through with a $6 million grant,” Carpenter said, “and a $4 million loan.”
With five of the seven members in attendance, the council voted unanimously for a 20-year note at 1.97% interest; it would result in a $250,000 annual payment. The 30-year option carried an interest rate of 2.37% with a lower annual payment of $190,000. The plus side on the 20-year option is that less interest accrue with a shorter term and the loan will be paid off earlier.
“It’s basically a savings, over a 20-year period, of $757,443,” said Carpenter, who called the special meeting to get input from the council and allow them to vote.
The loan does not affect the levy for 2027, which was set at 8% Monday. Also, the recently-approved 3% utility rate increases for 2027 will not go up.
As far as the preliminary levy is concerned, the council voted 5-2 to set it at 8%. Council member Jeri Schons made the motion to set the preliminary levy at that amount, and it was seconded by council member Dave Tiegs. Voting against were council members Jan Arvizu and Seth Schmidt. Schmidt rationalized going with 6% by saying if an unforeseen expense comes up later this fall and more money is needed, “we can still fall back on reserves,” he said.
The City’s preliminary expenditures are $12,609,583 and revenues are 12,865,929. Council-approved Capital Improvement Projects total $182,000. The council can lower the preliminary levy before certification in December, but cannot raise it.
