Board transfers $101,000 from water reserve to repay temporary sewer loan; engineer reports contractor delays

Madison — The Board of Public Works and Safety approved a transfer of $101,000 from the Water Capital Reserve Fund to the Sewer Capital Fund to repay the remaining balance on a temporary loan authorized by Resolution 2024-13c.

Resolution 2025-35b directs the transfer because interest expected to be received and used to repay part of the loan has not yet posted; staff said the interest is expected later in 2025 and, when received, will be deposited directly into the Water Capital Reserve Fund to restore the balance.

City staff summarized the remaining delay for final project closeout as work by Division B of the contractor not yet completed. City engineer Brian said Division B “has not completed their work, and and they're in actually in getting penalized right now, at a thousand dollars a day until they finish.” He said Division B is between 15 and 20 days delayed and that about $80,000 in retainage is being held; one remaining major punch-list item — cathodic protection on a million-gallon tank — remains unfinished and is a principal hold-up to final payment.

The engineer explained that prior loans were administered directly by the SRF and paid as invoices were submitted, but that in this loan the city received the funds upfront. He said the city will transfer funds from water reserve to sewer capital now, then restore the water fund when the interest and retainage are received. He noted the SRF processing timeline would be four to six weeks after submission, which made meeting the June 30 deadline unlikely.

A resident thanked staff for documentation prepared for the State Board of Accounts. The board adopted Resolution 2025-35b by motion and voice vote; staff said the transfer will allow the city to meet repayment requirements in the near term while final contract and retainage work is completed.