Ellsworth finance staff told the council on July 1 that the city was awarded a $4.9 million Drinking Water State Revolving Fund (DWSRF) loan for the Surrey Road water project but never completed the bond‑bank application step necessary to draw that money.

That omission left the city without the expected loan proceeds as a contractor invoice of about $900,000 came due, city staff said. Nate, finance staff, told the group that staff have reached out to the Department of Health and Human Services (DHHS) and bond counsel to complete the remaining capacity review and the submission to the bond bank so the city can draw the funds.

The immediate, most urgent problem is the contractor requisition. Council members discussed short‑term borrowing options — including a bond anticipation note or other short‑term bank financing — to ensure the contractor is paid on time while staff finish the DWSRF paperwork. Staff and bond counsel, the group said, will confirm whether the previously prepared bond package was ever submitted and will prepare any required council agenda items to authorize borrowing if necessary.

Why it matters: The DWSRF loan was intended to pay for the Surrey Road project that is already underway. Without the bond‑bank submission, the city cannot draw the awarded funds and faces a near‑term cash obligation to pay work already completed.

What was said and done: Nate, finance staff, said the city received a draft audit on June 30 and is working with DHHS and bond counsel to supply a missing capacity review and to submit the bond bank packet. "I don't want to put blame on one person because I don't know who's at fault for this," Nate said, adding the priority is to fix the process and get the loan drawn.

Council members urged staff to move quickly. One councilor said the immediate step is to determine the exact amount of the requisition that the city lacks funds to pay and to secure short‑term financing to cover that bill. Staff noted they could use the tax anticipation note (TAN) or borrow temporarily and repay when DWSRF funds arrive.

Bond counsel and prior project consultants: Council asked staff to contact Jim Safian, the city's bond counsel, and Woodard & Curran, the engineering firm that prepared the application materials, to retrace steps and confirm whether the bond packet and related minutes were ever submitted to the bond bank. Staff said they already had begun email chains with DHHS and the bond bank.

Next steps and procedural questions: Council members asked whether the bond‑bank packet and the application to draw DWSRF funds would require a council vote. Staff said that will depend on what paperwork was previously completed; if the packet was never sent or if council authorization is required to borrow, an agenda item and public hearing will be added. Staff and counsel planned to try to include the matter on the next posted council agenda; if timing or payment deadlines require it, the council discussed an emergency or special meeting to approve short‑term borrowing.

What was not decided: No formal motion or vote was recorded. Council directed staff to confirm the status of past submissions, contact bond counsel for a call, determine the exact outstanding requisition amount, and bring an agenda item to council (or call a special meeting) if borrowing approval is required.

Background details: City staff said the application to DHHS and subsequent approval of the project had occurred in 2022–2023, but the later bond‑bank step to enable drawing the DWSRF loan appears not to have been completed. The result is an awarded but undrawn $4,900,000 DWSRF loan for the Surrey Road project and a current contractor invoice of about $900,000 that is due soon.

What to watch: Staff said they will schedule a call with bond counsel and report back with a recommended financing step and whether the council needs to convene a special meeting to authorize short‑term borrowing.