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Budget committee reviews $4M pump station loan, ties project financing to proposed 400‑unit Timber Cove housing development
Summary
Committee discussed Business Oregon loan proceeds, the $4,000,000 construction cost for Pump Station 27, related tide-gate loan, developer obligations for minimum home production, and timing uncertainties tied to grants and buildout pace.
Coos Bay's Budget Committee was briefed on financing and schedule for Pump Station 27, the sewer pump station intended to serve a proposed Timber Cove housing development.
Nicole (City Manager/Finance Director) told the committee Business Oregon loan proceeds are budgeted in Fund 29 and that the construction estimate for Pump Station 27 is reflected as roughly $4,000,058 in construction costs. "So this is… the pump station that's going to serve the, 400 units of division Timber Cove," she said when describing the project and grant/loan package.
Why it matters: the pump station is being advanced by the city (rather than fully built by a developer) because the city lacks system development charge (SDC) mechanisms for shifting that capital responsibility to developers; staff said the city must be creative to facilitate development. Nicole said the $4 million will sit in Fund 29 as construction costs and that the repayment/ debt service will sit in Fund 3. She also noted a separate Business Oregon loan for tide gates is included in the financing package.
Committee members asked about affordability and debt capacity. Nicole said rate consultant Steve Donovan reviewed the plan and that he was comfortable with a 7.5% rate recommendation for fiscal 27 so the utility would have capacity for the Timber Cove loan. Committee members also discussed the buildout pace; staff told the committee the 400 units will not likely appear immediately and said a ten‑year buildout is more likely, though the developer had told staff he could build more quickly if market demand supported it. Nicole described a developer agreement that requires at least 150 homes to be built or the $4,000,000 would be repaid to the city, creating a partial safeguard for the city's investment.
The committee also heard that Nicole testified to the state legislature in support of grant funding for the project; staff said outcomes of state appropriations could reduce the city's upfront cost.
Ending: The financing plan for Pump Station 27 will move forward in the proposed budget materials to council; committee discussion centered on balancing near‑term city debt with long‑term housing supply goals and on grant pursuit to reduce the city's share of costs.
