Stormwater proposes first use of debt for CIP, seeks 57¢ monthly increase; council approves budget

Stormwater Management staff told the City Council on Thursday that FY26 will be the first year the program uses debt service to accelerate capital improvements, and recommended a modest monthly fee increase for most homeowners to support the expanded capital program. Council voted to approve the recommended FY26 stormwater budget.

Wayne Miles, stormwater manager for Engineering Services, said the department has identified roughly $920 million in stormwater capital improvements across the city and recommended issuing debt to deliver projects more quickly. “Fiscal year 26 is going to be the year that stormwater uses debt service for the very first time to help fund our capital improvements project,” Miles said. Using debt, staff said, will allow a proposed FY26 CIP of more than $31 million compared with about $14 million in FY25.

To support the program the department proposed raising the single‑family equivalent rate by 57¢ per month, from $7.65 to $8.22. Miles said that increase would raise the program’s projected FY26 budget from about $39.2 million to $42.7 million and that the proposal includes a pay‑as‑you‑go allocation and a recommended $7 million fund‑balance restoration to improve creditworthiness for future bond issuance.

Miles described the proposed projects as already in study, planning or design phases so that construction can begin once debt proceeds are available. He also highlighted maintenance improvements and programs such as Rainwater Rewards, drainage assistance, watershed studies and a flood‑early warning system. The Stormwater Management Advisory Commission unanimously endorsed the FY26 proposal in an 8–0 vote.

Finance staff explained the fund‑balance restoration strategy. Lisonbee Bradshaw, finance, said the program currently has about 360 days of cash on hand and was advised to target 540 days prior to long‑term borrowing; the FY26 plan would allocate roughly $7 million to move partway toward that goal and use temporary bond anticipation notes ahead of a revenue bond issue.

Councilors asked about service levels, why the program moved toward debt financing now, and how the new fee compares with peer cities. Miles and finance staff said the change was timed so projects already in design can proceed to construction and that the proposed rate would keep Raleigh near the median of peer utilities. A council member moved to approve the recommended stormwater budget; the council voted in favor and the motion passed. Staff requested authorization to program billing system changes and notify the largest 250 customers; council granted that permission.

Action: Council approved the FY26 stormwater budget and authorized staff to program billing changes and notify large customers about the proposed fee.