Junction City reviews financing scenarios as state ranks water projects for aid

City officials reviewed preliminary financing scenarios for multiple water and sewer projects during the Junction City council work session on May 27, 2025, after the Oregon Health Authority ranked the city ninth among 36 applicants for state funding.

The presentation from Duncan Brown of PFM Financial Advisors offered estimated annual debt-service ranges for each project under several financing approaches, including 20- and 30-year terms, revenue bonds and full-faith-and-credit bonds. "We've looked at 4 different options here using 20 year terms or 30 year terms for a potential bond issue," Brown said during his briefing.

The estimates were intended to give the council a sense of the relative annual cost and affordability of each proposed project so members can prioritize work. Brown said the package in the materials treated the projects hypothetically as one combined bond to show per-project impact; staff also noted the city is pursuing subsidized state loans and other lower-cost options through the Oregon Health Authority and Business Oregon.

Staff told the council they expect SCS Engineering to provide rate-projection work next month so the city can see how each financing scenario would change customer bills. Jason (city staff) and Gary (public works) said that information will allow the council to select a comfort threshold for annual payments and then mix and match projects to meet that target.

Officials discussed the city's place in state funding priorities. Brown told the council he had received notice that Junction City ranked ninth of 36 applicants for state funding programs, and staff estimated roughly $8.4 million of near-term work could be the highest-priority package if state assistance is available. "I haven't had a chance yet to see what falls in that project, but, I'm awfully sure that it's going to be the the first 4 projects on the list," Brown said.

Councilors and staff discussed the city's current water rate and state thresholds for grant and loan eligibility. Staff said the state considers Junction City a "distressed community" because median household income is below state averages, but that the city's water-only bill (for a typical usage level) remains below the threshold the state uses to prioritize some grants. Staff reported the current water-only bill is about $38.42 and said the first eligibility threshold would require a water charge of roughly $75 per month for a comparable customer — a gap staff said could limit access to certain grants and loan forgiveness programs.

Staff also reported administrative progress on specific projects: the city received a final order enabling Bailey Well to begin sending water into the system, and staff said they had applied for a $50,000 grant to help fund a water master plan. Councilors were told the city also expects to present to the Infrastructure Finance Authority (a division of Business Oregon) on an engineering grant request of about $1 million for the Westside Treatment Plant engineering; because the request exceeds $750,000 it will require a board presentation as part of that agency's procedure.

What happens next: staff said they will return with SCS Engineering's rate projections next month, and council direction will determine which combination of projects and financing approaches they pursue.