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Council hears first reading of interfund loan to fund combined sewer overflow project estimated at $4.5 million
Summary
City staff presented an ordinance for a first reading Oct. 6 to authorize a 5-year interfund loan from the water fund to the wastewater fund to support a combined sewer overflow (CSO) project estimated at $4.5 million; council asked for more detail and staff will return at the next meeting.
City finance staff presented a first reading Oct. 6 of an ordinance that would authorize an interfund loan from the city’s water fund to the wastewater fund to support a combined sewer overflow (CSO) project with an engineering estimate of about $4,500,000.
The finance presentation said the wastewater fund faces financial challenges and that the water fund currently has the cash to make a short-term loan. Staff proposed a five-year loan with interest charged in accordance with the state auditor’s BARs guidance; staff identified the interest rate as 3.61%, tied to a current five-year Treasury benchmark.
Council questions and staff responses
Council members asked substantive questions about project status, timing and whether the ordinance should be brought back after bids or as an authorization “up to” the estimated amount. Staff said the design was nearly complete, the $4.5 million figure was the engineering estimate intended to cover anticipated bid amounts, and that the council could authorize a loan after bids are received for an exact amount if council preferred. Council discussion also covered potential grant opportunities and the need to understand how an interfund loan would affect water-fund cash available for water projects.
Next steps
Staff said the ordinance would be brought back for a second reading on Oct. 13 with additional details; no formal approval or loan execution occurred on Oct. 6. Council members asked staff to provide: (1) the water fund cash position, (2) whether grants or other external funding might be available, and (3) clearer timing and bid information so council could decide whether to authorize all or part of the money in advance.
Ending
The item remains at first reading; staff will return with more detailed materials at a future meeting before any loan is executed or the ordinance is adopted.
