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Council hears options for financing projects: SRF surcharges, sales‑tax bonds, or a street maintenance fee
Summary
City staff outlined borrowing choices for street and utility projects, comparing SRF surcharge loans (example surcharge ~$180/year) to sales‑tax revenue bonds (example ~$10/year per utility account) and proposed a front‑foot street maintenance fee; council asked for more numbers and a follow‑up ahead of budget decisions.
City staff presented multiple options for financing upcoming capital projects, including State Revolving Fund (SRF) surcharge loans, sales‑tax revenue bonds, and a proposed street maintenance fee assessed on a front‑foot basis. For the Orleans Avenue example staff used, total estimated project cost was $4,900,000 with a $500,000 sewer grant, leaving an estimated borrow need of $4,400,000. Staff estimated an SRF surcharge could add roughly $180 per year on an average utility account, while a sales‑tax bond approach might translate to about $10–$10.50 per year on a similar account, though sales‑tax borrowing increases general fund debt service obligations.
Staff outlined tradeoffs: SRF surcharge loans are typically long (30 years) and treated as utility surcharges, whereas sales‑tax revenue bonds are more flexible in term (10–30 years) and can allow investment of proceeds while construction is ongoing; sales‑tax debt uses sales tax as the revenue pledge. Staff also proposed a maintenance fee (front footage examples used an 80‑foot lot) to create a dedicated revenue stream for ongoing street maintenance. Council members probed debt limits, current loan counts, and the timing of drawing on existing SRF approvals; staff said they would return with more detailed financial modeling for the 2027 budget process.
