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Council discusses capital plan, debt length and increased pavement spending ahead of June vote
Summary
Budget staff previewed the 2026–2035 CIP and 2026–2028 CIB, proposing a shift to longer‑term bonds to free operating revenue and a $3 million annual increase in pavement management using sales tax fund balance; councilmembers urged caution about extending bond terms amid operating shortfalls.
City budget staff presented the draft 2026–2035 Capital Improvement Plan (CIP) and the 2026–2028 Capital Improvement Budget (CIB) for discussion on May 13 and said staff will move the tentative vote to the council’s June 3 meeting to allow additional review.
Why it matters: The CIP and CIB set multi‑year capital spending and debt strategy. Staff proposed issuing 20‑year general obligation (G.O.) bonds rather than 15‑year bonds to shift debt‑service timing, which staff said would free roughly $3,000,000 in near‑term revenue for the general fund in 2026 but would extend debt payments and increase interest over time. Staff also proposed using available Citywide Sales Tax (half‑cent) fund balance to accelerate pavement management and add about $3,000,000 per year for mill/overlay and reconstruction projects.
Division Director Josh MacInerney told the council that issuing 20‑year bonds would permit shifting more mill levy revenue from debt service to general fund operations for 2026, avoiding immediate CIP cuts. He cautioned that changing the debt term would increase long‑term interest and that the council could instead choose to bond on a 15‑year schedule and reduce or defer project spending. Council members expressed concerns: Councilwoman Miller urged maintaining a 15‑year debt horizon to avoid increased long‑term interest costs and to preserve recent progress in reducing outstanding debt; other council members pressed for clarity about which projects would be reduced if the city kept 15‑year bonds.
MacInerney also said staff wants to spend down a built‑up sales‑tax fund balance on pavement management, increasing that program by about $3,000,000 annually to address backlogged mill and overlay needs. Council members requested detailed scenarios showing which projects would be cut under a 15‑year approach, and asked for more time to evaluate tradeoffs amid a reported $17,000,000 operating shortfall in the master budget.
Ending: Staff postponed the tentative vote to the June meetings to compile project‑level scenarios and bond‑term comparisons. No ordinance or final vote occurred at the May 13 meeting.
