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Arcata council approves reimbursements for water and wastewater projects, pauses Prop 218 rate hearing
Summary
The Arcata City Council on Nov. 5 adopted two resolutions declaring the city’s intent to reimburse certain water and wastewater capital expenses from future tax‑exempt financing, and voted to remove a separate Prop 218 rate‑setting item from tonight’s agenda pending grant and federal benefit developments.
The Arcata City Council on Nov. 5 adopted two resolutions that let the city reimburse itself for recent and upcoming water and wastewater capital costs if it later issues tax‑exempt debt. The measures, numbered 256‑16 (water) and 256‑17 (wastewater), were presented by Assistant City Manager and Finance Director Tabitha Miller as administrative steps required by the Internal Revenue Service to preserve flexibility in future financing.
Miller said the resolutions do not obligate the city to issue debt; they simply allow the city to consolidate and reimburse eligible capital expenses incurred in the covered projects. She walked the council through three decades of asset and investment history in the city’s water and wastewater funds and said recent years have seen renewed capital spending.
City Engineer (staff) described current capital improvement projects that underlie the financing need. The steel water‑line replacement project is estimated at about $12 million and is under way; the Plunkett waterline was completed at roughly $1.4 million; Tank 1C concluded at about $3.3 million. On the wastewater side, staff said Phase 1 of the wastewater improvements is about 95% complete and that the overall wastewater program (excluding separate levee work) carries an estimated price tag in the range of $67 million. Staff noted a separate levee/levee‑improvement project remains in environmental review and will require coordination with the California Coastal Commission.
Separately, Miller asked the council to remove from tonight’s agenda a Prop 218 item (Resolution 256‑18) that would have initiated the formal process to adjust water and wastewater rates. She said doing so would be prudent after recent federal benefit disruptions and because staff is pursuing a potential wastewater grant (roughly $15 million) that could materially change the rate model. Councilmember [motion maker] moved to pull the Prop 218 item and the motion passed unanimously.
Councilmember [maker of reimbursements motion] then moved to adopt resolutions 256‑16 and 256‑17; that motion passed unanimously as well. Councilmembers and staff emphasized that the actions preserve options while the city refines grant assumptions and the rate model. Staff said the council will receive further updates and a longer‑range planning presentation in January 2026.
The council also took public questions about the ratio of grant vs. rate payer impact, whether levee work would proceed without Coastal Commission approvals (staff said no), and the timeline for remaining wastewater construction (staff said contractor work should reach full completion by mid‑2026).
