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Committee discusses Bay Street shortfall, impact-fee changes and federal grant pursuit
Summary
Committee members and staff discussed a funding shortfall for the Bay Street reconstruction project, possible use and restructuring of impact fees, and parallel grant and appropriation pursuits to cover remaining costs; staff said a new impact-fee ordinance could allow more impact-fee spending on the project if adopted.
Finance committee members discussed funding options for the Bay Street reconstruction project and related capital priorities, including how impact fees and pending grants or appropriations might be used to close a multi-million-dollar shortfall.
A member said a lobbyist had reported the state appropriation under negotiation looked likely to provide $1 million rather than the $3 million the city had requested. Committee members discussed whether to accept a smaller state award or press for more. Staff said the Bay Street reconstruction was not included in the previous TIF plan but is included in a new transportation/infrastructure priority list and that an updated impact-fee ordinance — which staff are targeting to present in June — would allow the city to spend more impact-fee money on the project.
Noah Crocker and other staff described the current impact-fee fund balance and obligations. Staff said a conservative minimum currently available for Bay Street was about $784,000 but that the city could change its methodology (presenting 20% and 50% alternatives) to allocate a larger share of impact fees to particular projects. Staff also described pursuing federal grants and congressional appropriations; they had submitted requests to both U.S. senators and were preparing an application for a federal grant to support the project.
Committee members stressed the trade-offs: using more impact-fee funds for Bay Street could reduce amounts available for other capital projects (including the Bethel community-center and other obligations already noted in previous packets). Staff said the city is pursuing a mix of funding sources — impact fees, bond proceeds where available, grant applications and federal/state appropriation requests — and that construction timing aimed for early 2026 (award to go to bid November–December and construction in February–March) is contingent on securing adequate funding.
Next steps: staff will continue grant and appropriation outreach, finalize the impact-fee ordinance for council consideration, and report back on updated fund balances and any commitment of impact-fee funds.
