Council reviews three options to stabilize water fund as staff warns of near-term cash shortfall

Staff presented three scenarios for the city water fund and warned council that, under current budgeted capital spending, the fund could run short of operating reserves unless the city raises revenue, reduces capital, or borrows. Chair (S1) opened the item and turned the presentation over to the staff member (S4), who said the water fund ended FY25 with roughly $323,000 — about 79 days cash on hand — and that spending $2,000,000 in FY26 without offsetting revenue would produce a roughly $300,000 negative balance.

S4 summarized the three options: Scenario 1 assumes no new rate increases; Scenario 2 assumes a 6% revenue increase split over two years plus a $900,000 internal transfer and scaled-back capital; Scenario 3 models borrowing ($7–8M) with a $300,000 transfer to fix a timing gap. “we have about 323,000 in cash for the waterfront, which equates to 79 days cash on hand,” S4 said, and later warned that without action “we're gonna come down to a negative 300,000 cash available for ongoing operations and emergencies.”

Councilmembers probed the assumptions (pass-through costs from Weaver Basin, timing of capital projects already in the pipeline, and how transfers would affect sewer and storm funds). Staff said the model includes Weaver Basin pass-throughs and that some FY25 projects are already underway; staff also noted that transfers in the model were treated as grants and not repaid. Council asked for five years of historical cash data and additional modeling before choosing a course of action.

The staff presentation did not produce a formal vote or directive; instead, council asked staff to return with historical trends, clarified consequences of each scenario, and outlined the legal and public‑notice steps that would be required before any rate action.