Council approves water projects including Coyote Springs well funding; members press for clarity on enclave obligations

Water staff presented several FY27 capital requests and the council approved them after questions about scope, funding and city obligations.

John Spencer, director of water resources, explained that a prior action had awarded the well development contract; the FY27 request would fund the remaining portions (pump station, building and appurtenances) needed to make the Coyote Springs well fully operational. Spencer said construction phases had existing funding and that the FY27 request would close out the project.

Council also discussed upgrades to an enclave subdivision (a neighborhood outside city limits the city now serves). Staff said the city purchased water assets from a private utility in that subdivision and now has responsibility to upgrade aging mains. The work will not be funded by impact fees alone; staff said enclave customers pay higher utility rates (approximately double) and that rates, fund balances and impact fees all contribute to the financing mix.

Councilmembers asked whether forced annexation or different agreements could alter long‑term funding responsibility. Staff and development services officials said annexation requires contiguity and that the city has a small number of similar pre‑annexation or enclave arrangements (five to six) requiring ongoing attention. Council asked for legal and contractual background and asked staff to return with options.

Council voted to approve the water division and water‑renewal capital requests while requesting additional follow‑up about enclave agreements and the planned schedule and budget for finishing the Coyote Springs well.