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Council asks staff for clearer funding scenarios after franchise‑fee bonding options presented for public works facility
Summary
Consultants outlined options to pay roughly half of a proposed public works facility with general obligation bonds that could be underwritten by increased franchise fees; council asked staff for comparative scenarios showing levy vs. fee impacts and to preserve current street funding levels.
City finance consultants and staff presented funding options for a proposed public works facility and asked council whether franchise fee increases should fund the city’s general‑fund share of debt service.
Consultant Bruce (Ehlers) described a two‑part approach: general obligation capital improvement bonds could cover the general‑fund share (present baseline assumption 50% of total project cost), while utility revenue bonds could cover the water and sewer portions. One illustrative scenario assumed a $35 million project and level debt service requiring about $1.2 million per year to cover 50% of the debt service.
"If you paid half of the debt service on a $35,000,000 project from the general fund, that would be about $1,200,000 per year," the consultant said, and staff described how phased increases in existing franchise fees (electric/gas) spread over five years could generate that amount without immediately raising property‑tax levies. Examples assumed modest annual percentage increases (illustrative 6% per year) to reach a target over five years.
Council members pushed back on the tradeoffs: several said they did not want to reduce street funding, noting the city’s road maintenance backlog. One councilor asked staff to quantify the comparative household impacts of using levy increases versus franchise fee increases. Staff agreed to return with multiple scenarios that show (a) 100% levy funding, (b) a mix of levy, franchise fees and enterprise fund contributions, and (c) the fiscal effect on street programs if franchise fees are diverted.
Council members also discussed the alternative of delaying or stabilizing the existing public works facility plan and whether limited repairs to the incumbent facility (approximate $5 million stabilization cost) would be fiscally responsible; many members expressed preference for moving forward with a scaled facility rather than pouring limited funds into stabilizing an inadequate building.
Staff will prepare comparative scenarios that quantify per‑household levy impacts, franchise fee increases, and preservation of street funding in parallel with any bond issuance analysis.
