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Council pauses full stop on recycled‑water work pending state grant decision, authorizes staff to continue through July
Summary
Facing an expired grant term and construction delays, the council directed staff to continue both pipeline and pump station projects through July to await a possible state grant extension and return with funding options if reimbursement is not approved.
Public Works staff updated the council on the recycled water master plan and two construction contracts that are near completion (pipeline ~90% complete, pump station ~15% complete). Staff said permit delays from a railroad and PG&E extended the project schedule and that the Department of Water Resources grant term expired March 31, 2026.
Staff presented three options: (1) continue the pipeline project only (estimated additional local expenditure ~$700,000), (2) continue both projects through the end of July while awaiting a grant‑extension decision (estimated local cash outlay ~$1.6 million), or (3) fully complete both projects now using a $3.8 million general fund loan if the grant extension is not approved. Staff recommended Option 2.
Council voted to direct staff to proceed with Option 2 — continuing both projects through the end of July; staff will return with either confirmation of the grant extension and reimbursement plan or a request for a general‑fund loan and associated resolutions and budget adjustments. Staff emphasized that the city has sufficient recycled‑water impact fees to cover near‑term expenditures but that lack of reimbursement would leave the city unable to seek grant repayment.
Council also heard that two construction contracts had a three‑year term ending March 31, 2026, and that contractor claims could arise if projects paused mid‑contract. The motion passed unanimously on roll call.
