Pasco staff asks council's informal go-ahead to fund larger utility mains now and seek formal budget amendment later

City staff on June 9 told the Pasco City Council that the utility 'upsize' program ' under which developers install larger water, sewer or irrigation mains to accommodate future growth ' will likely require increased allocations in the current biennial budget and asked the council for preliminary support so staff can reimburse projects carried out now.

Director Sarah (Public Works) explained that past biennial allocations for the program ranged from about $200,000 to $400,000; staff now recommend raising the water upsize allocation to $1.3 million and irrigation to $550,000 to cover commitments and likely near-term projects. Staff said these expenditures are typically funded from capital-expansion fees, but when fees are insufficient the cost can be borne temporarily by rates or reserves and later reconciled.

Because the city operates on a biennial budget, staff said they must confirm the legal mechanism for making reimbursements before September 1 without a formal mid-biennial ordinance. Staff proposed options such as an emergency appropriation or an interfund transfer; legal counsel and the auditor's procedures will determine an approach. Councilmembers asked staff to complete the legal review and return with a formal proposal; some members said they supported acting quickly because waiting could force developers to install undersized mains and later require costly reconstruction.

Councilmember Peralta voiced concern about setting a precedent without legal review; several councilmembers said they supported the policy goal of paying for upsized capacity now to avoid higher rework costs later, but asked staff to document the legal basis and controls (eligibility criteria, reimbursement timelines and reporting) before funds are disbursed.

In related items staff presented two sets of developer reimbursement agreements: reimbursement frameworks for water, sewer and irrigation improvements the city constructed in Broadmoor and for utility work at the A Street Sports Complex. Those agreements, if adopted, allocate future developer reimbursements from properties that benefit from those public improvements. Staff said these reimbursement agreements were structured under state law that allows developer reimbursement districts and that the agreements will be brought to the council for formal approval at the next regular meeting.

No appropriation was approved at the workshop. Staff committed to return with legal analysis of the emergency or interim-funding options, an ordinance if needed and template reimbursement agreements for council approval.