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City advances multi-million-dollar lead service-line and other capital projects; staff flag loan timing and $8 million in deferred work
Summary
City staff told the finance committee they are pursuing multiple large capital efforts — including a roughly $14 million lead-service-line project and a larger 2026 application — and that state loan-closing schedules, principal-forgiveness awards and shrinking TID increments shape borrowing and deferral choices.
City staff presented the committee with the capital portion of the 2026 plan and said timing at the state level will shape how much is borrowed this year versus next. Mary Anne described a lead-service-line program the city has been advancing: the 2025 project is presented as roughly $14 million total (about $9 million private/ homeowner side and $5 million utility side) with substantial principal forgiveness estimated for the private side (roughly $7.7 million) that would leave the city borrowing in the neighborhood of $1.3 million under current estimates.
Staff also described a larger 2026 lead-service-line application in process. Under one scenario the full private-side program could total as much as $40 million, with principal forgiveness on the private portion potentially exceeding $12 million and a public-utility revenue-bond component of about $6 million if awarded based on the state's matrix. Mary Anne cautioned the committee these are application-stage numbers and that final obligations depend on the state's award and loan-closing schedule.
Other capital items in the 2026 plan include about $4.6 million in general infrastructure projects, roughly $580,000 in facilities work, and a fleet replacement program of $2.6 million; the staff presentation said the city expects to borrow for portions of fleet and other projects and cited a general-obligation promissory note of about $6.4 million among funding tools. Staff reported about $8 million of capital projects were deferred in the recommended 2026 plan; the deferred list included roof replacements, tennis-court and playground repairs, parking-lot reconstructions, an aerial fire truck and one ambulance replacement, and other maintenance items.
Staff discussed tax-increment-district (TID) impacts: TID 6 is closing and the resulting drop in increment partially explains the need for a larger debt-payment plan this year to smooth levy impacts. The presentation included a discussion of TID-funded trail and street projects, and staff noted some RiverEdge Trail segments and downtown parking improvements will be paid from a mix of TID, room tax and grants.
Timing and implementation risk: staff said the city is waiting on state loan closings for safe-drinking-water loans and revenue bonds; one staff member (Eric) reported he is traveling to the state to push a loan closing. Mary Anne said last year’s loan closing was delayed into June and that calendar timing could push some closings into 2026. "We need to get that loan closed," she said, urging attention to the state schedule.
No capital ordinance or bond resolution was adopted at the meeting; the committee reviewed funding sources and deferred-project choices and directed staff to continue negotiations and to return with updated numbers as loan and grant awards are finalized.
