The Philomath City Council on Monday approved the fiscal year 2026-27 capital improvement plan following more than an hour of discussion that touched on water treatment costs, facility upgrades and the future of a proposed City Hall remodel.
The CIP, which covers infrastructure, facility and equipment needs across three fiscal years, was approved 5-0, with two councilors absent. The motion carried “as modified” after councilors worked through adjustments during the meeting.
City Manager Chris Workman framed the plan as a recovery year following a period of heavy spending and some cost overruns.
“We spent a lot of money over the last couple of years,” Workman said. “We did go over a little bit last year on some of those projects and so this year’s capital project fund is rebounding from that — that leaves us with not a lot of money in our land, building, equipment fund to take on a lot of any new big projects.”
He reminded the council that the vote was limited in scope.
“Just as a reminder, you’re not approving projects for all three years, you’re essentially just approving the allocation for projects this fiscal year as stated for the 2026-27 projected,” he said.
The most prominent figure in the plan is the total projected cost of the water treatment plant — $23.7 million for construction, engineering and contingency. Of that amount, $7.5 million has been spent to date, leaving roughly $16.25 million in remaining expenses.
Finance Director Mike Murzynski noted that the construction number had climbed by $700,000.
“The construction project number will increase to $15,950,000,” he said, “and the number is probably going to change once we get the final construction contract. The bottom line won’t change.”
Business Oregon financing for the project remains at $8.35 million.
“This would be our worst-case scenario budget,” Workman said. “If we can negotiate that down with the contractor, then we will.”
The CIP document shows the water treatment plant construction is funded through a loan of $6.9 million and the Business Oregon financing.
The council’s longest debate centered on whether to move forward with a City Hall remodel estimated at $421,973 — part of a total $461,055 in City Hall facility funding that also includes parking lot restoration and HVAC replacement.
Workman said the remodel would not proceed without further council review.
Mayor Christopher McMorran suggested some money could be redirected toward offsetting water treatment plant debt and noted a council openness to reallocation.
Councilor Diane Crocker expressed caution about reallocating the funds entirely, arguing that ADA compliance and security improvements at the building remained legitimate needs.
“My priority is the ADA and the security,” Crocker said, adding that she did not want a full cosmetic remodel to take priority. “The whole remodel sounds like you’re putting in new landscaping and new carpet and new paint, and it’s going to just make it pretty, and that’s not a priority in my book.”
Crocker also raised a concern that reallocating the money could undercut the rationale for a proposed city services fee.
“I am concerned that if we reallocate it, that it is essentially the same number that we would gain from the fee — and people would just say, ‘let’s just use that instead of a fee’ and then we never get security and accessibility things taken care of,” she said.
Workman suggested a path forward — leave the $421,973 in the plan, bring the matter to the Finance and Administration Committee, and return to the council with a more focused proposal — potentially limited to ADA and security work.
Security improvements under discussion would convert the current open front-counter area into service windows.
Workman steered councilors away from making budget changes at the meeting itself, suggesting that discussion was better suited for the Budget Review Committee meeting scheduled for Wednesday.
Councilor Rich Saalsaa, who sits on the Public Works Committee, praised city staff for pulling together the plan.
“There’s a lot of moving parts, as you can imagine, and there’s a lot on the wish list and a lot of things that have to kind of get moved around that makes sense, particularly in light of this year’s budget,” Saalsaa said.
He acknowledged the difficulty of budgeting in the current economic environment.
“Trying to budget ahead of time in this economy right now is a little bit difficult,” he said. “We’re taking our best foot forward and then having a contingency along the line.”
