City to use TID revenue for housing efforts

A special tax district created as part of a Main Street reconstruction project more than two decades ago, will be closed by the end of the year.

At Monday’s committee of the whole meeting, members of the Medford City Council voted to recommend closing Tax Incremental District No. 5 (TID 5) at the end of 2023. Final action will take place at next week’s city council meeting.

However, the city will also look at taking advantage of a state law that will allow it to retain an additional year of increment after closure with the money to be used for affordable housing.

Typically the property taxes on a parcel are divided between the municipality, school district, county, and technical college district. In TIDs, the amount received by each of the overlapping taxing entities is frozen for a period of time while the city collects the full amount of taxes paid on any improvements made to the properties in the district. This money is then used to pay off costs related to the development of the area. For example, land purchase, road construction or utilities. The TID law also allows districts to help pay off the debts of other TIDs which have been declared “distressed.”

City coordinator Joe Harris said TID 5, which covers the downtown area in the city has paid off its bills and with no distressed districts it is time to close it up.

Council members agreed and voted unanimously to recommend its closure.

However, members also recommended adopting an affordable housing extension. This allows the city to capture an additional year of increment beyond when the TID closes with the condition that the money be used to promote housing in the community.

Harris explained that 75% of the money must be used for low to moderate housing, for example the Commonwealth project now under construction on Progressive Ave. The remaining 25% can be used on any residential housing.

The city will use the money to continue its loan assistance program providing non-interest supplemental loans to contractors building multi-family housing in the community.

Council member Mike Bub asked if this needed to be approved by the joint review board, which is made up of representatives from the other taxing entities and which has to approve changes to TIDs. Harris said that it does not need their formal approval, but that the joint review board members were notified the city would be looking into doing it at the joint review board meeting held last month.

With the housing extension, the city would continue to collect increment on TID 5 through December 2024 and in 2025 and going further the increment would go fully on the overlying taxing district tax rolls.

Capital projects

Council members recommended approval of the city’s capital project plan highlighting which major projects the city staff recommends through 2030.

Top on the list for next year’s projects in the summer of 2024 are the reconstruction of the wall along the east side of the Black River replacing the dry-stacked concrete with a wall near Ackeret Appliance and sloped rip-rap further north toward the Hwy 64 bridge.

In addition, next summer the city will assist with the state’s resurfacing of Hwy 64 with the city responsible for the parking lanes along the road. The state will also be reconstructing the Hwy 13 and 64 intersection next summer.

In reviewing the proposed projects for the coming years, council member Peggy Kraschnewski asked about plans to redo South Second Street.

“It is awful,” Kraschnewski said. “Some of these others are more awful,” Harris replied of the other projects on the list.

Kraschnewski noted the city wanted people to come to town, but the road leading to city hall is really rough. She said it was important to have it be nicer.

Harris said he could add it to the project list for 2029 in the schedule.

Committee members voted to recommend approval of the capital project schedule.

In other business, council members:

  Received an update on the Commonwealth housing project on Progressive Ave. Contractors began pouring the footings on one of the buildings this week and work is continuing to progress.

  Recommended setting the trick or treat hours for Halloween for October 29 following the Harvest Days parade until 6 p.m.

  Recommended approving engineering contracts with Ayres Associates for upcoming projects including the multi-year development of a new well along Pep’s Drive to potentially replace Well 5 located along Hwy 13 near the Bone and Joint Clinic and which was found to have a small amount of PFAS contamination. The city is working to be ahead of potential EPA guidelines on PFAS. The well development is expected to cost about $241,000. The overall engineering contract with Ayres for the four projects is $343,700.