Arcadia council adopts reimbursement resolutions to preserve financing options for water and wastewater projects

Arcadia’s City Council on Nov. 5 adopted two resolutions declaring the city’s intent to reimburse certain water and wastewater capital expenditures from the proceeds of future tax‑exempt debt, preserving the option to consolidate projects and issue tax‑exempt bonds when market or grant conditions are favorable.

City staff said the declarations — Resolution 256‑16 for water projects and Resolution 256‑17 for wastewater projects — do not obligate the city to issue debt immediately but allow the city to reimburse itself from future financing for capital costs incurred within IRS time limits. Assistant City Manager and Finance Director Tabitha Miller told the council the change provides flexibility to time borrowing to the market and to incorporate grant awards that could reduce rate impacts.

Nut graf: The council adopted the reimbursements as part of a broader update on major capital needs. City presentations showed hundreds of millions in historic underinvestment followed by recent large projects: a $12 million steel water‑line replacement (about 8% complete), a Plunkett water line replacement completed at $1.4 million (75% Cal OES‑funded), the recently completed Tank 1C (about $3.3 million), and wastewater Phase 1 improvements that staff said are roughly 95% complete with contractor work expected through early 2026 and final completion anticipated by June 2026.

City Engineer (name not given) told the council the steel water replacement is intended to remove aging steel pipe and AC pipe and replace meters with smart meters; a future additional water storage tank and further waterline projects are planned over the next 3–5 years, with a very large waterline replacement cost estimate included in planning at $14–50 million. On the wastewater side, staff reminded the council the Phase 1 treatment plant work has added new pumps, electrical rooms and headworks; separate levee (levy) improvements to protect the wastewater plant remain in the environmental review phase and will require coordination with the Coastal Commission before construction, the engineer said. The council was told the levee project’s environmental work is complete and the construction phase may be a multi‑tens‑of‑millions dollar effort (staff cited $50–60 million as an illustrative planning scale) scheduled in a 3–5 year horizon.

The council and public pressed staff on the levy work’s regulatory constraints. Resident Gregory Taget referenced prior Coastal Commission correspondence that he said denied levee work; staff clarified that the levee/levy project is separate from the Phase 1 wastewater project, that the environmental phase is complete, and that staff will consult the Coastal Commission before any construction and would return with more detail in January 2026 when a long‑range feasibility presentation is planned.

Quotes: “All you are doing tonight is making sure that we have the ability if we actually issue tax exempt debt at a future time to reimburse ourselves for cost that we’re incurring,” Tabitha Miller said. The City Engineer described the wastewater Phase 1 timetable: “we are 95% complete…we are on schedule to complete the project for the contractor by February 2026,” with final completion estimated by June 2026.

Ending: Council adopted both resolutions in a single vote and directed staff to return with further grant and planning updates, including a January 2026 briefing on long‑range wastewater planning and levy options. The declarations preserve the city’s ability to time borrowing and to apply grant proceeds to lessen impacts on rates if the city decides to issue tax‑exempt indebtedness later.