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Public works outlines 2026 operating cuts, capital deferrals and advancing a proposed solar project
Summary
Public Works proposed operating reductions and limited capital deferrals to balance the 2026 levy-supported budget and briefed the committee on a proposed $2.5 million community solar project that could leverage tax credits and an EPA grant; staff recommended starting design work in 2026 to meet tax-credit timing.
The Department of Public Works and Utilities presented an overview of operating reductions, staff vacancies and capital changes for 2026. The department said water and wastewater operate in enterprise funds and were largely self-funded; five levy-supported divisions (streets/maintenance, engineering, GIS, inspections/zoning and motor pool) were reviewed for possible cuts.
Public Works staff said non-street and storm positions and contracted services were trimmed where feasible, maintenance supplies were reduced by about $5,000, and a vacant surveyor position is proposed to remain unfilled for half of 2026. The motor-pool fuel budget was reduced by roughly $70,000 based on a new fuel contract and expectations about fuel usage. Streets and storm budgets were trimmed by reducing planned purchases of materials where inventories should cover next year’s anticipated needs.
On capital, the department proposed a lower-cost repair to 20th/Eighth Avenue — a mill-and-overlay rather than full reconstruction — to address damage and avoid an immediate $1.8 million reconstruction, while noting the repair is not a permanent fix and a full reconstruction may return to capital lists later. Staff said the repair would also preserve the option to apply for state STP urban funds or LRIP for a future full reconstruction.
Public Works briefed the committee on a proposed municipal solar project estimated at $2.5 million total. Staff said to maximize federal tax credits and competitive grant opportunities, the city should commence project design and bidding in 2026 and ideally begin construction before July 2026 (or meet federal commence-construction rules) because certain tax-credit and Buy-American-related requirements affect eligibility. The department has applied for an EPA grant of $1,180,000 for the project; if awarded along with minimum federal tax credits (30%), the city’s borrow requirement would be reduced. Committee members asked staff to bring more detailed financing scenarios and a timeline for design and construction given grant and tax-credit deadlines.
