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McKinleyville board reviews water/wastewater bond plan and draft FY 2026–27 budget; final approvals set for June
Summary
District staff presented a preliminary plan to issue certificates of participation to finance ~$4.588M in water projects and ~$3.939M in wastewater projects, outlined an S&P credit presentation and June approval timeline, and discussed the draft FY 2026–27 operating budget including requests to separate grant and operating revenues for clarity.
District staff briefed the McKinleyville Community Services District board on plans to seek tax-exempt financing for critical water and wastewater projects and on the draft FY 2026–27 operating budget.
Financing plan: Staff summarized board direction from March and the audit and finance committee’s April review. The preliminary financing targets are $4.588 million for water projects and $3.939 million for wastewater projects. The next steps include an S&P credit presentation in mid‑May, submission of legal and financing documents for board authorization at the June 3 meeting, and a planned closing in early July. Directors stressed the need to strike a balance: borrow enough to complete the highest-priority projects while avoiding a borrowing level that could materially weaken the district’s strong credit rating and raise long-term borrowing costs.
Budget draft: Staff also presented the draft FY 2026–27 operating budget for the water, wastewater and streetlight funds. The water fund is projected to end FY 2026–27 with a $2.348 million surplus; the wastewater fund is forecasted to end with a $3.366 million surplus despite a modest decrease in net income compared with the prior year. Staff cited increases in general liability insurance, subscriptions and permit fees as drivers of higher operating costs. Directors asked staff to present operating revenue separate from grant and non‑operating receipts in the final budget packet so the board can clearly see core utility performance apart from capital grant flows.
What’s next: The board will receive final financing documents and pricing information at its June meeting and expects to take action on the financing at that time. The finalized FY 2026–27 budget will also return to the board for adoption in June after staff separates operating and non‑operating revenues per the board request.
