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Council considers $1.5M interfund transfer to shore up water reserves; concerns raised about sewer and storm funds
Summary
A modeled $1.5M internal transfer or grant to the water fund would raise days‑cash to about 300 and allow planned projects to proceed, but councilors warned it would reduce cash available for sewer or storm capital needs and asked staff to analyze impacts to those funds.
Jonathan Wirtz showed councilors that an internal transfer or grant of $1.5 million into the water fund would materially improve reserve metrics while enabling completion of planned 2026 projects.
"With the same $86,000 starting point and a net increase of 1.3 after operations in '26, plus 1.5 infused into the waterfront from somewhere else, we're now showing a positive 300 days cash on hand and still completing $1,800,000 of capital projects in the waterfront," Wirtz said. Several council members cautioned against tapping a single enterprise fund for the full amount and recommended splitting any transfer across sewer and storm funds so the donor funds retain capacity for their own capital projects.
Wirtz noted that modeling the transfer as a grant (rather than a loan) avoids coverage ratio requirements but also permanently reduces the donor fund's reserves unless repaid; an internal loan structure is permitted under state law but requires repayment terms (typically up to 10 years) and an interest rate equal to the greater of the PTIF rate or comparable treasury yields. Councilors asked staff to evaluate which combination of transfers, loans and bond sizes would balance near‑term delivery and longer‑term fund health.
