With delayed projects complete, Yachats council approves 2026-27 capital spending plan focusing on streets and water

By GARRET JAROS/Lincoln Chronicle

YACHATS – After wading through the line-item weeds of upcoming infrastructure projects, the Yachats city council approved a $5.4 million capital improvement project budget Wednesday that will dig into the city’s reserve funds.

The unanimous vote to approve the fiscal year 2026-2027 CIP budget was a show of support for several costly and postponed projects and the awareness the city has been building its reserve funds for years to make them possible. The fiscal year runs from July 1 to June 30.

The spending plan was approved by the finance committee before being passed to the council for final consideration. The committee along with city staff began going over the budget in January.

City manager Bobbi Price told the council the first step was to evaluate where the city stands with current projects that would roll into the next fiscal year and what remained to be spent in the current year. The next step was to evaluate 20-year master plans for both water and wastewater in combination with boots on the ground to see what has to be done as soon as possible.

“We do have aging infrastructure,” Price told the council. “We have pipes and pump stations that need a lot of work this year. And that’s going to be the real bulk of our work this year in the CIP.”

Wastewater, water, streets and storm drains top the list of projects.

Big projects include rehabilitating all of the city’s pump stations, major improvements to the lift station in the Quiet Water neighborhood and new eight-inch water and wastewater lines as well as street work on West Third Street. That work will involve removing and replacing old asbestos concrete pipes with new plastic pipes.

“It’s very necessary work,” Price said. “And all very expensive work.”

But with a fully staffed public works department, Price said she is confident they will complete all the projects slated for 2026-27. The city will also continue to investigate the location above the city’s water plant for a 1.5 million gallon reservoir to increase the city’s water storage capacity and resiliency. It will replace the city’s main seismically unstable million gallon reservoir on Radar Road.

Price said street and storm drain work does not have a revenue source other than street taxes the city receives from the Oregon Department of Transportation.

“And they need a significant amount of investment into them,” she said. “So we need to be looking closely at a street and storm drain fee, which has been discussed before and I’d like to be working that into our budget for this year.”

Staff is working on a comprehensive list for the Public Works & Streets Commission, finance committee and council about fees other cities use for that funding and how they structure it.

The big ticket items in the Commons building this year are structural maintenance to ensure water stays out of the building as well as electrical panel work that will be paired with making it compatible with a backup generator from the water treatment plant that can be used in emergencies.

The city is also ready to request bids to rebuild the closed pavilion. Part of that will be paid this fiscal year and part next year. The estuary walkway, which is largely grant funded, is expected to go out for bid in the next couple of weeks. The work will also carry over into the next fiscal year.

The new library and Little Log Church Museum, which were “heavy hitters in the previous couple years,” Price said, are down to budgeting $25,000 for landscaping at the library.

“All of those don’t sound like maybe a lot but they all cost a lot of money,” she said before adding the total enterprise fund capital improvement budget is just over $3 million and the general fund just over $2 million for a combined capital outlay projected at $5.45 million.

“Which is a pretty large chunk and would go significantly into our reserves,” Price said. “But that is exactly why we have money in our reserves is to invest in our capital assets and make sure that we are providing the service and ensuring our infrastructure is in the best condition it possibly can be.”

Councilor Nicole Hedlund asked how those reserve funds will be replenished?

Price said when reviewing the operating budget in connection with the CIP budget shows there’s a trend that much more is budgeted than is actually needed.

“So that will help us to not fully deplete it as much as it looks like we’re going to,” Price said. “This is all work that has to be done so we’re allowing it in the budget, we’re making space for it … to be able to do the work. Will it all get done? Maybe not. Maybe a large portion of it will and some of it will be carrying forward into the next year.”

The city also contributes $250,000 each from water and wastewater operations into capital reserves, which was planned for this year, she added.

“We are going to have to pause after this push of work, we’re going to have to slow down to give some time for those contributions to start rebuilding those up,” Price said. “We also, I think it’s time to start evaluating the rates as well.”

Are water and sewer rates at a pace to be able to contribute to capital reserves needed to carry out large-scale projects? Price asked.

“It’s part of a bigger thing, but we have to be very conscious about how we plan for next year’s capital budget as well.”

Mayor Craig Berdie said the work on Third Street will cost significantly more than anticipated in prior years, citing the impact of tariffs and transportation on the city’s budget.

“It’s expensive,” Berdie said. “And as much as I’d like to defer some of these expenses, I don’t think we can defer it any longer.”

“The beauty is, when we get done with these projects our collection system is going to be looking really good for quite some time,” Price said. “I think we will have the opportunity to have a little bit of relief on those reserve funds to start rebuilding.”

The city will use just over $3 million in reserve funds for the projects if it spends all that is budgeted, which will leaving just over $5 million still in reserve.

Building those reserves and saving for these projects came from the efforts of previous councils, staff and finance committee members, Price said, adding it’s an effort that will need to happen again.

Berdie said to some extent these projects were deferred over the years and then called upon former finance committee member Tom Lauritzen, who attended the meeting, to add his comments.

Lauritzen said it wasn’t too long ago that the city had only $2 million in reserves.

“So a lot of that extra $8 million came from the impact of Covid where we continued to attract a large amount of revenue but we shut down a lot of projects because there wasn’t anyone to (do) them,” he said. “So our reserves built up significantly in 2021 and 2022. We remained a destination of choice into 2023 and 2024 so our tax collections were good. So we saw a real surge.”

Ten years ago, the city had nothing in enterprise reserves, Lauritzen added.

“We’d spent everything we ever had,” he continued. “We had zero. But we’ve come a long way. We built up nice reserves for these projects. And the finance committee, the new members, I am sure will be aggressive enough to start rebuilding again as this wave of projects gets completed.”

Berdie said the city needs ideas where and how to grow revenue through not only rates but other available mechanisms.

“We’re exploring some but I really would like to see a lot of creative thinking in that area – where and what can we do,” Berdie said. “Urban renewal district has been invaluable to us. Hopefully that can be extended a little bit, can give us some more room. We’re going to be looking at some significant cost moving forward.”

One of those is the wastewater treatment plant who he said has “the bones” but a lot of the associated structures are showing wear after 30 years.

“All the pipes on the outside of the building are corroding,” Berdie said. “There’s going to be a significant cost to essentially restore that. We need to start thinking about those big, big projects.”

• Garret Jaros covers the communities of Yachats, Waldport, south Lincoln County and natural resources issues for Lincoln Chronicle and can be reached at [email protected]