Council members press for clarity on $80 million loan interest and deferred water/sewer projects

Council members raised concerns at a Cloverdale City meeting about how interest payments on a large municipal loan are affecting the city’s water and sewer capital program.

At the start of the meeting a council member said the city has an "$80,000,000 loan" with "$2,000,000 interest payments on it," and asked which water and sewer capital projects were deferred or canceled because of those debt-service costs. The council member said: "Something has to hurt the infrastructure that we all been wanting over the last...20 years." (Councilmember (unnamed), public comment)

City staff said they would gather and provide a clearer breakdown. Finance staff (Susie) and Public Works/operations staff (Kevin) discussed an audit and a 12-month review to reconcile the water revenue increases and project spending. Susie presented water and sewer revenue figures showing year-over-year increases and noted the water usage and rate changes have substantially raised receipts: examples cited by staff included monthly usage spikes described as 11%, 24%, 13% and a 34% increase in a recent October reporting period. (Finance staff (Susie))

Staff and councilors also discussed new water meters. One council member asked whether higher billed usage reflected better meter reads rather than actual consumption; staff said meters were installed "a little bit at a time," making month-to-month attribution difficult. Staff said a grant covered a portion of meter costs but the majority of the program was funded through the city’s utility program and turn‑key arrangements. (Public Works/operations staff (Kevin))

Council members asked for clear follow-up: a reconciliation showing (1) how much of the revenue increase is attributable to new or corrected meter readings, (2) which capital projects identified before the recent rate increases were completed, deferred or canceled, and (3) what portion of rate increases was needed to meet debt-service rather than pay-as-you-go capital needs. Staff said they will return with a breakdown and that a full audit at the 12-month mark should clarify whether the rate increases remain necessary or should be adjusted.

The discussion produced direction to provide a written breakdown to council and to verify that projects such as new chlorine tanks, reservoirs and hydrant upgrades identified in prior rate hearings were completed or remain on schedule. No formal vote or change to rates was recorded during the meeting; councilors framed the item as a request for additional information and audit follow-up.