Staff told the council that an engineer-recommended option to address a sewer bottleneck at 20 Fifth Street carries an estimated cost in the neighborhood of $3 million. “The option that the engineers recommended … was 3,000,000,” a staff member said, and added that the amount is large enough that the city would need significant revenue sources to proceed.

Staff discussed funding options in the workshop. They said the general fund does not have sufficient capacity to pay the full construction cost and that the city would likely use a debt issue; staff also noted some developer participation has already occurred for portions of the project. “The developer for the RE part has been paid for some of it. But … it has to be a debt issue,” the staff member said.

Council members asked whether water-rate capital improvements or other waterline funds could be used; staff said large sewer or major utility replacements are generally funded from utility capital funds or debt and may not be appropriate for transportation-fee revenue. No funding decision or motion was made at the session; staff said further modeling and identification of revenue sources would be required to move the project forward.

The matter remains in study and will return to the council with refined cost estimates and funding options.