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STAFF REPORT <br />DATE:03/10/2026 <br />DISCUSSION <br />TO: Mayor and Councilmembers <br />FROM: Clarissa Hadler, Finance Director <br />AGENDA ITEM: Use of Stormwater Funds to pay for Street Improvements <br />CORE STRATEGIES: <br />☐ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services <br />☐ Responsive, transparent, adaptive governance ☒ Balanced Finances now and future <br />☐ Managed Growth ☒ Resilient Infrastructure <br />BACKGROUND <br />Councilmember Dragisich requested discussion regarding the use of the Stormwater Fund to <br />pay for street improvements at the February 17 meeting, and there was a consensus of the <br />Council to review it further at the March 3 meeting. <br />The current practice of the City is to not use Stormwater funds for street projects. Street <br />projects have largely been funded by bonds, to date, and we recently started moving toward a <br />funding model and associated taxation to be able to pay for future street projects, at least in <br />part, with cash. The bonds for Street Projects are repaid by a combination of property taxes and <br />special assessments. Special assessments are generally 30% of the total project. <br />The Stormwater Fund has paid for certain non-street, project-related capital projects, such as <br />the Hudson Blvd culvert. That project cost was approximately $400,000, which is over 50% of <br />our annual stormwater revenues and used over 20% of our cash in the fund for that one <br />project. <br />The Ordinance creating the Stormwater Fund in 2003 <br />does indicate that one of the purposes of the fund is <br />for “capital improvement in developed areas.” While <br />that ordinance does dictate what the stormwater fund <br />shall be used for, it does not dictate that all <br />stormwater projects must be paid for by the <br />stormwater fund. <br />The residential stormwater fee started at $20 in 2004 <br />and is currently $95. (See chart.) The fees for other