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Council approves $19.68 million internal loan for North Dry Gulch drainage improvements
Summary
Lakewood City Council approved a $19,682,727 internal loan from the general fund to the stormwater enterprise fund to finance North Dry Gulch flood-control projects, with a 2% fixed interest rate over 20 years and annual repayments budgeted from the stormwater enterprise.
Lakewood City Council on March 24 approved an internal loan of $19,682,727 from the general fund to the stormwater enterprise fund to finance major drainage improvements in the North Dry Gulch area.
City Engineer Ray Hill and Director Max Kirschbaum presented the North Dry Gulch project as a multi-phase effort to address flooding that affects roughly 150 properties and about 130 buildings and 23 street crossings in the floodplain. "The North Dry Gulch project is a floodplain that impacts about 150 properties within the North Dry Gulch floodplain," Hill said, adding that the project will reduce flooding in the 100-year floodplain.
The requested action authorized an internal loan (a transfer) and the expenditure of the funds by the Division of Public Works via Mile High Flood District for construction. Staff said the stormwater enterprise has approximately $29 million saved toward the project through 2027 and that Mile High Flood District has been a long-term funding partner, contributing roughly $775,000 per year. City staff noted that accrued interest dedicated to the project is approximately $1.3 million.
The loan terms authorized by the council are a 20-year term at a fixed 2% interest rate, with annual repayments from the stormwater enterprise fund of $1,203,731. Ray Hill said the annual payment amount has been budgeted in the city's 2025 budget and can be made "without impacting our operational services." Council members asked clarifying questions about whether taking the loan from the general fund affects the enterprise fund status; staff responded that the loan preserves enterprise status and that the loan agreement sets repayment terms.
One resident, Brad Bruce, who lives near Pierce and Colfax, spoke during public comment in support, noting chronic flooding at the intersection of Pierce and Colfax. The council closed the public hearing and passed the ordinance authorizing the loan on third and final reading; the vote was 7-0.
Staff indicated the work is already underway in earlier phases (a conduit on 14th Avenue completed late 2024 and a Colfax crossing at Newland Street under construction). Phases 3 and 4 are planned to continue construction into 2027. The loan will fund continued construction and will be repaid from the stormwater enterprise fund per the agreed schedule.
