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Clear-well water project remains costly; staff flag borrowing and rate implications
Summary
City staff said the Clearwell water treatment project has long been in the CIP (previously cited at roughly $90 million), remains unborrowed and could require borrowing or ratepayer decisions depending on public-service commission determinations.
City staff reminded the council that major water-utility projects remain outstanding and flagged uncertainties about funding and potential impacts on rates and borrowing.
The Clearwell project (previously shown in CIP materials at about $90 million) and other large utility items such as ozone and liquid-oxygen systems were described as outstanding utility projects that the city has not yet borrowed for and that may be financed through the Safe Drinking Water Loan Program or other mechanisms. In the meeting staff said the city had not yet borrowed for the clear-well project and that some work would be reimbursed through the Safe Drinking Water Loan Program rather than taken as upfront revenue bonds.
Councilors and staff noted an unresolved issue with the Public Service Commission (PSC) over how much of the Clearwell cost ratepayers must cover; staff said a portion — discussed in the workshop as roughly $3–4 million in one scenario — might land on the general fund or require other funding if PSC rules limit ratepayer responsibility. That uncertainty would affect the city’s overall borrowing strategy and the levy limit calculation because general-obligation borrowing would increase debt service allocated to taxpayers.
Grill and finance staff urged that the council consider the uncertainty in the CIP and be cautious about adding more GEO borrowing until the status of the Clearwell, PSC determinations and other revenue bonds are resolved.
Ending: Staff said they will continue to track program funding (Safe Drinking Water Loan reimbursements and PSC decisions) and update the council as the Clearwell project moves from planning to procurement.
