| | | | | | | | CITY OF PEORIA, ARIZONA
COUNCIL COMMUNICATION | Agenda Item: 6C. |
| Date Prepared: 2/25/2026 | Council Meeting Date: 3/3/2026 |
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| | | | | | | | | TO: | Honorable Mayor and City Council
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| | | | | | | | THROUGH:
| Kevin Burke, Deputy City Manager |
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| | | | | | | | | FROM:
| David Burks, Water Services Director
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| | | | | | | | SUBJECT:
| Water Services Fiscal Year 2026 Capital Improvement Program Budget Re-allocation Request |
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| | | | | | | | Purpose:
Discussion and possible action to reallocate existing Fiscal Year 2026 water/wastewater Capital Improvement Program funding to create financial capacity needed to accelerate two wastewater projects. |
| | | | | | | | Summary:
Last fall management determined that the timing of two wastewater projects needed to be accelerated and the project budgets increased in order to meet the timeline of the Amkor development. The two projects are the 96th Avenue 18-inch Sewer (UT00543) and the Agua Fria Regional Wastewater Lift Station (UT00544). Consequently, an exercise was undertaken by staff from the Water Services and Finance and Budget departments to identify water and wastewater funding in the current fiscal year that could be reallocated to these two projects.
Exhibit 1 is a summary of the results of this exercise. Staff identified $11,479,199 in wastewater funding in five projects that could be reallocated to the sewer line and lift station projects. Staff also identified $2,582,017 in water funding in seven projects that could be returned to fund balance to help create budgetary capacity for higher priority projects in FY2027. Staff is requesting Council approval to move forward with these changes in the FY2026 budget. |
| | | | | | | | Previous Actions/Background:
• On May 13, 2025, the City Council adopted the 10-year capital improvement program for FY2026-FY2035.
• On June 3, 2025, the City Council adopted the final budget for FY2026, including the capital budget, as well as utility rates for FY2026 and FY2027.
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| | | | | | | | Staff Recommendation:
Staff recommends the approval of a request to reallocate existing FY2026 water/wastewater CIP funding to create financial capacity needed to accelerate two wastewater projects. |
| | | | | | | | Fiscal Analysis:
The adopted 10-year CIP includes the 96th Avenue 18-inch Sewer and Agua Fria Regional Wastewater Lift Station projects. However, the funding for these projects is spread over fiscal years 2026 through 2028 and needs to be moved up. In addition, the approved project budgets fall well short of current estimates.
Accelerating these two projects and rightsizing the project budgets to reflect current estimates has significant implications on wastewater rates. Reallocating funds as shown in Exhibit 1 will help keep the city on the rate path approved by the City Council in June 2026. Without such action, the City would need to adjust wastewater rates above the approved rate path.
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| | | | | | | | Contact Name and Number:
David Burks, Water Services Director (623) 773-7181 |
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