Council considers transfers from sewer and storm funds to cover $549,000 water shortfall

Council members reviewed staff projections for the city’s enterprise funds and considered transfers to cover an anticipated shortfall in the water fund. Peter, presenting the packet, said last year’s capital and operating expenditures in water totaled about $4.3 million and projected an "ending balance this year of about minus $549,000," prompting staff to propose transfers rather than bonding to avoid long-term interest costs.

Jeremy and other staff flagged a few modeling inconsistencies in the packet but confirmed the policy option: finish FY2026 in the black by executing inter-fund transfers and then present a formal budget amendment. As one councilor summarized the staff recommendation, "We agree with 400 from the sewer, 4 50 from storm," and staff said they would prepare the amendment and supporting public notice for the hearing timeline tied to truth-in-taxation advertising.

The council debated alternatives to transfers, including cutting capital spending (staff suggested limiting water capital to roughly $750,000 annually for the near term) and revisiting water rates next calendar year if needed. Staff emphasized that some capital projects are scheduled to take advantage of concurrent road work, which can increase short-term capital outlays but save money long term. The council did not adopt the amendment at the meeting; instead, members directed staff to prepare the amendment, correct modeling errors in the packet, and return with the formal amendment and public-notice language.