Earlier this month, Gov. Tina Kotek threatened to veto $14 million in state funding for seven local infrastructure projects across Oregon unless they could clearly show they would result in new housing development. Last week, she announced that no line-item vetoes would be made to the projects state lawmakers had already approved funding for during this year’s short legislative session. Shady Cove, a city of roughly 3,200 residents in Jackson County, was one of the municipalities the governor’s office requested additional information from. According to Mayor John Ball, the city wants to use the $1.5 million it was awarded to develop a municipal water system, which he says is essential for new housing development. Mayor Ball joins us to talk about the status of the project, and to reveal the challenges rural communities in Oregon face to build more housing.
Note: This transcript was computer generated and edited by a volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Not too long ago, Oregon Governor Tina Kotek said she was considering line-item vetoes for seven local infrastructure projects. She said she wanted each of them to show that they would lead to new housing development, and do so quickly. $14 million in state funding was at stake. Last week, she announced that all the projects would, in fact, get their money. Shady Cove is one of the cities that could breathe a sigh of relief. It’s a city of roughly 3,200 people in Jackson County. It’s in line to get $1.5 million for a municipal water system. John Ball is the Shady Cove mayor. He joins us now. Welcome to the show.
John Ball: Thank you very much. I appreciate it.
Miller: How would you describe the housing situation in Shady Cove right now?
Ball: Very stagnant. We’re a smaller community. We’re actually shrinking in size in the last ten years, very stagnant growth. And the developments that we had that had been approved and zoned properly need water to be finished, to be built.
Miller: Well, let’s hear more about that because, as I noted, the Governor really wanted to know two things before she would agree to not line-item veto these out. Would this result in the production of new housing and could it happen quickly? So let’s take that first one. How would a municipal water system in Shady Cove, itself, lead to more housing?
Ball: We literally have lots that are waiting for homes that have no water.
Miller: And no way to dig a well in those?
Ball: Wells, in the whole state of Oregon, are going to become harder and harder to dig.
And in our area, we have thousands of wells. And they are going dry constantly. They’re dug four or 500 ft and they never hit water. So wells are very, very iffy. When they do hit water, a lot of times in this area, it’s arsenic, really bad sulfur water. So wells are not the answer. In fact the Oregon Health Authority is trying to get people away from the wells as much as possible.
Miller: What kinds of units are you talking about here that are ready to go as soon as they get water?
Ball: In this case, they’re gonna be single family dwellings, maybe one set of duplexes, but most of them will be single family dwellings and not high end, but mostly low to middle income type housing.
Miller: Low to middle income, but market rate housing, single family homes?
Ball: Correct.
Miller: And what’s the timeline that you’re looking at, because that was another big issue the Governor wanted to know. Because I think if you said these will be up in eight years, I get the sense she wouldn’t have given you the $1.5 million. So what is a reasonable timeline?
Ball: We’re hoping to have those built within a year to 18 months, to have the first ones done and ready for people to move into and live in.
Miller: And you’ve talked directly with developers to actually get that timeline?
Ball: Correct.
Miller: What kind of a guarantee can they give you? There’s so many issues that crop up when you’re talking about any development, even a relatively small one. I mean, what do you hear from them?
Ball: Well, you know, for the developers, it’s even more of a risk right now with the cost of construction going up almost daily. They really have lost money over the last four or five years by us not being able to furnish water for them. So they’re not real happy to begin with. But they also know that they need to develop these properties that have already been zoned, allocated. They have electrical, sewer, everything is there. So they need to develop them. They can’t really give us a guarantee. So all we can do is work with the state and try to allocate the money they give us, directly to what’s going to get their homes built the fastest .
Miller: Were these developers just assuming all along that somehow the city would be able to put in a municipal water supply? I mean, it’s been many years that folks have been talking about this. I’m just curious, from the developer’s perspective, what their plan was, say, absent the legislature coming through?
Ball: They were probably just gonna sit on the land. We even have, in the southern part of the city, a new developer that’s looking at 90 apartment complexes. And we have a water main just right near him that’s privately owned but it is part of the public right of way and we could finish it. We’re looking at possibly helping him with the finishing of the infrastructure there, to break ground in the next year or two on 90 apartments, which would be incredible for this area.
Miller: How much would the water treatment plant cost in total?
Ball: The last feasibility study was not an in-depth one, but you’re looking upwards north of $50 million easy. North of $50 million.
Miller: But we’re talking about $1.5 million in state help right now, right? And you’re saying $50 million total,
Ball: Probably that or more.
Miller: So, what can you actually do with the $1.5 million?
Ball: You get the first homes built. That’s our first step. We haven’t had new homes and like I say, our population is actually shrinking, like a lot of rural Oregon.
Miller: I feel like maybe I’m just missing something basic here. But I thought that the homes couldn’t be built because they didn’t have the municipal water supply. But you’re saying the municipal water supply system will cost $50 million. So I’m wondering how you could then, how the homes could be built with the help of only $1.5 million?
Ball: Because some of the infrastructure is already there. So we just have to use it to finish the infrastructure to those developments.
Miller: So that’s not a whole water system of, say, filtering and providing clean water, but it’s just some pipes to existing clean water?
Ball: Correct. That’s the infrastructure. I.e. infrastructure to the homes the developers were not going to invest their money in. And we, as the city, can invest the money to allow them to build.
Miller: And then in the future, with other money, you could build a new drinking water system to provide water citywide. Is that the ultimate dream?
Ball: Correct. Correct.
Miller: What options did you have if this project had been vetoed? I mean, we might have spoken last week when you were sending the packet of information responses to the Governor’s office. At that time, if she said, ‘no, we’ve looked at your responses and we don’t think this is a good use of these state funds right now,’ what options did you have?
Ball: Keep looking for money. Go to the federal end of it and see what we can find there. Because we need something to get us moving, something to move us forward. Because without more homes, without more population, you can’t generate any money to move forward, whether it be to fill a pothole or to lay groundwork and infrastructure for the water system. So I mean, you can either dry up and go away or you can try to figure out a way to pay for it.
Miller: And putting a bond out, you’re saying, wouldn’t work because your tax base itself is shrinking?
Ball: Correct. Correct. So, with a shrinking tax base, in a very impoverished tax base, which much of rural Oregon is, you’re not going to be seeing a lot of bonds going out. And the ones that do go out just get crushed, not just from the small town itself. When the school district, last fall in this area, put out a school bond, I think it was 75-25% no, for this area. I mean, it was just absolutely hammered, crushed. Same thing with the jail a couple of years ago, which is coming back out again this fall and will get hammered, crushed again. No, the people are tight. In this area in rural Oregon people are going broke, from taxes and fees.
Miller: But the Governor did not strike this. So you do have access to the $1.5 million for this infrastructure. What’s the current status right now of getting those state dollars so you can move forward?
Ball: You know, they changed it in the middle of the bill. At least from my understanding, these are all going to be prepaid in one nature or another. It’s going to all go through Business Oregon now. And then that means that the small cities and everybody in this infrastructure bill will need to expend the money and then ask for reimbursement based on whether it qualifies or not.
Miller: Do you have the money? Do you have the cash to spend it first on this project and then get reimbursed from the state?
Ball: We’ll have to take a lot of little bites, instead of bigger ones. I wish they would have done it like they do to all the nonprofits for the addiction and the homeless and just give us the money. But I guess they’re the only ones who know how to spend money without wasting it.
Miller: Sarcasm drips deeply.
Ball: It should. It should. They hand out money to the recovery houses and the nonprofits with no questions asked. And they don’t even audit it to see what it gets spent on. But maybe the cities, you better know exactly what it’s going for.
Miller: That response gets to my next question. But I want to give you a chance to just address this more broadly. I’m curious what you think this whole experience says about the challenges that rural communities are facing right now when it comes to the statewide goal, necessity, of more housing and more affordable housing?
Ball: Well, this is just my personal opinion. You know, when I do speak to people, I tell them that the state is pushing people away from living rurally. They want them in cities. They want them in larger towns and I do mean all the way down into Medford. They want us to stop living rurally. They want us inside of the 15-minute city thing. And they’re pushing hard to get it there.
If they have to kill the rural communities, they will. You’ll have to find, from safety to water to even sewers and infrastructures. They’re making it so hard to put in leach fields and your own septic tanks and things like that. It’s almost impossible to get the permits now because of the state. So if you’re not close enough to a sewer system of some sort, you can’t build. So they’re not real rural-friendly for a state that only has, what, 4.5 million people in it or something like that. They are not real rural-friendly.
Miller: John Ball, thanks very much for joining us today. I appreciate your time.
Ball: Thank you, appreciate it.
Miller: John Ball is the mayor of the city of Shady Cove.
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