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Council reviews $17.2M 2026 capital slate and bonding plan that would raise water, sewer rates
Summary
City staff outlined a $17.23 million package of 2026 projects — Rossman neighborhood infrastructure, downtown water/sewer/road work, sewer lining and a sludge thickener — to be funded with a $2.5M state grant, cash and up to $13.18M in water/sewer revenue bonds that would prompt multi-year rate increases.
City staff on Aug. 25 presented a multi-project capital plan for 2026 that would overhaul water, sewer, storm and road infrastructure in several neighborhoods and downtown, and described a planned financing package that relies heavily on revenue bonds.
The largest single element is the Rossman Neighborhood Infrastructure Project, which staff estimated at about $9.1 million and said received a $2.5 million state grant (the maximum available this funding round). The downtown infrastructure component (Walnut, Chestnut and parts of Trowbridge) was estimated at approximately $4.43 million. Staff also estimated sewer lining work at roughly $800,000 (about 7,390 linear feet to be lined) and a sludge-thickening installation at the water resource recovery facility with an anticipated cost near $2.4 million. Combining the disclosed estimates produced a total program cost of $17,234,375 and a projected city obligation of $14,734,375 after the state grant.
To finance the work staff proposed using about $1.974 million in cash on hand plus issuing up to $13.18 million in water and sewer revenue bonds. Staff outlined an anticipated schedule for the bond process — notice of intent in October, a 45-day referendum period, distribution of official statements and bond bids in January — with expected completion of the process by Feb. 10. The plan includes water rate increases of 8% in 2026, 6% in 2027–2030 and 1.5% in 2031–2035; sewer rates were projected to increase 1.5% annually from 2026 through 2035 to service bond payments.
Councilmembers questioned whether nonessential projects could be paused or deferred; staff recommended continuing design work so the city holds shovel-ready plans and explained that pausing design midstream can increase costs. Staff noted tradeoffs of bonding (higher total payment over time) but argued the financing approach spreads costs across users and years. "I am very confident in the funding the financing plan that was presented in June," the city manager said, while acknowledging interest-rate uncertainty and the need to monitor bids and market conditions before finalizing bond amounts.
Next steps: staff will complete 60% design by Oct. 3, refine cost estimates, prepare notice-of-intent documents for Oct. 13 and continue bond planning. Council requested additional per-lane-mile cost comparisons of county chip/cape-seal work, grind-and-fill and full reconstruction to inform later choices.
