Staff outlines possible public–private partnership to advance McDermott trunk sewer; council requests more detail

Meridian staff briefed the City Council on June 24 about a possible public–private partnership (PPP) intended to accelerate construction of a segment of the McDermott trunk sewer that the city had planned for a later year in the capital facilities plan.

Staff said the concept would let a developer fund and build an eligible trunk segment earlier — at the developer’s upfront cost — and the city would reimburse half of the documented cost at the time the project appeared in the city’s capital plan (the staff example advanced the schedule from 2028 to 2026, with the city’s 50% payment not due until the originally planned year). The draft terms staff discussed included public bidding, a 50/50 split of final cost, a cap on the city’s share of change orders at 5% (developer responsible for excess), and plan review and inspection provided by the city at no initial cash cost.

Staff emphasized limits and risk: the arrangement would only be considered for projects already in the five-year CFP, the city would require a non‑appropriation clause (the developer would accept the risk that a future council might not fund the reimbursement), and the agreement would not obligate the city to pay before its planned funding year. Staff identified Toll Brothers’ Dayspring project (Eustis/McDermott area) as the immediate project prompting the discussion; the city’s current planning documents program the McDermott trunk in phases through 2032, and only a small number of future segments would fit this PPP model.

Why it matters: Staff said the PPP could cut the city’s immediate construction cost roughly in half for eligible, large-diameter trunk work because the developer builds under public procurement rules and the city pays half later; an earlier completion could also enable private development sooner. Staff cautioned that the developer would front the full cost and that bids and final pricing must be available before council would be asked to approve an agreement.

Council response and next steps: Council members requested more detail before taking a position. Councilwoman Strader asked for maps showing the segments and votes wanted a draft of the proposed agreement and worst-case scenario analyses (for example, the city’s exposure if a counterparty failed mid-project). Staff said Toll Brothers had drafted an agreement and that staff revisions had been exchanged with the developer’s attorneys; staff proposed bringing full bid numbers and the agreement back to council if the Dayspring entitlements were approved. The item was continued to the main meeting agenda and staff said they would return with the agreement and financials after the project is bid.