Redding City Council to weigh electric rate hikes, $25 million grant bid, bridge projects at Tuesday meeting

REDDING Calif, — The Redding City Council will consider setting a public hearing on four years of electric rate increases, pursue a $25 million federal grant for a major interchange project and award millions in bridge construction contracts when it meets Tuesday evening.

The regular meeting is scheduled for 6 p.m. at the Civic Center Council Chambers, 777 Cypress Ave. A special closed session is set for 4:45 p.m.

Here is a look at the major items on the agenda.

Electric utility rate increases

Perhaps the item with the broadest impact on Redding residents: Staff is asking the council to schedule a March 3 public hearing on proposed Redding Electric Utility rate increases of 4.5 percent per year beginning with the April 2026 billing cycle and continuing through January 2029.

According to the staff report, average residential customers would see increases of roughly $7 per month in 2026 and 2027, rising to about $8 per month in 2028 and 2029. The increases follow 4 percent annual hikes already implemented in 2024 and 2025.

REU Director Nick Zettel's staff report attributes the need to aging infrastructure, rising power supply costs driven by California's clean energy mandates, the phaseout of federal tax credits and tariffs on clean energy technology. Staff noted the proposal was reduced from an originally planned 5 percent annual increase after the utility identified operational and capital savings.

The proposal also includes an increase to the Residential Energy Discount for income-qualified households, making roughly $500,000 in additional annual assistance available to low-income customers.

Staff projections show that even with the increases, REU would remain the lowest-cost electric provider in the area. According to the report, standard residential bills currently run $160 per month for REU customers, compared with $188 for Shasta Lake and $344 for PG&E.

Tuesday's vote would only set the hearing date. No rate change would take effect without a subsequent vote.

Separately, the council will receive REU's second-quarter financial report for fiscal year 2025-26. The utility outperformed budget projections through December, with operating revenue coming in 1.4 percent above budget and power costs 1.8 percent below projections. The unrestricted cash balance stood at $39.1 million at the end of December, representing about 96 days of cash on hand — above the utility's 75-day policy minimum but below the 150-day target.

$25 million federal grant application

On the consent calendar, the council will authorize staff to apply for a $25 million federal BUILD grant from the U.S. Department of Transportation for the South Bonnyview Diverging Diamond Interchange and Corridor Capacity Improvement Project.

The project, which would reconfigure the Interstate 5 interchange at South Bonnyview Road, has been a long-running city priority. Staff have applied for federal funding under various program names over the past four years without success. The project would include a diverging diamond interchange — potentially the first in California bracketed by roundabouts on both ends — along with ramp improvements and a roundabout at South Bonnyview Road and Churn Creek Road.

If awarded, the required local match would come from the city's Traffic Impact Fee program, with the exact amount determined at the time of the grant award.

Bridge replacements: nearly $8.2 million

Two bridge projects account for the largest immediate spending on the agenda.

The Westside Road over Canyon Hollow Creek Bridge replacement carries total estimated costs of nearly $7 million. Staff is recommending the council reject the apparent low bid from JS Builders Inc. of Palo Cedro as nonresponsive — the company submitted its proposal on incorrect forms — and instead award the contract to the second-lowest bidder, J.F. Shea Construction Inc. of Redding, at $4,748,526. That figure exceeds the engineer's estimate of $3,345,000.

The project is funded primarily through the Federal Highway Bridge Program, which is expected to cover 88.53 percent of costs. An accompanying budget resolution would appropriate $2,318,780 in additional funding, drawing on both federal grants and Transportation Impact Fee dollars. Construction is anticipated to be complete by fall 2027.

Separately, the Eastside Road over Olney Creek Bridge project needs a $1.2 million budget increase to cover cost overruns from contaminated soils discovered after construction began in 2023 and additional construction management expenses. The total authorized project budget would rise to approximately $7.1 million.

Ironman 70.3 triathlon partnership

The council will take up a memorandum of understanding with Redding Tourism Marketing Group Inc., known as Choose Redding, to support an Ironman 70.3 branded triathlon in Redding on Aug. 16, 2026, with subsequent events in August 2027 and August 2028.

The city's cost is $53,000 per year from the general fund, covering police and fire overtime, shuttle service from the Civic Center to Whiskeytown Lake and miscellaneous expenses. A budget resolution would appropriate the funds for fiscal year 2026-27.

The expenditure is modest, but the funding source warrants attention. Staff noted the appropriation would draw from general fund reserves that are already forecasted to finish below thresholds established in council policy. Choose Redding estimates the event would generate roughly $152,000 in additional transient occupancy tax revenue during race week, with total lodging tax receipts for the week expected to reach $345,000.

The item was first presented Jan. 20 and sent back for further analysis. Staff reported that road maintenance costs for the bicycle course have not yet been determined, and that funding trail maintenance required by Ironman within the Community Services Department's current budget would displace other planned projects, including restroom repairs, park signage replacement and median rehabilitation.

Oregon Street improvements

Also on the consent calendar, the council will consider awarding a $1,312,100 contract to J.F. Shea Construction for improvements along Oregon Street between Yuba and Shasta streets. The work includes filling sidewalk gaps, constructing a concrete box culvert to enclose Calaboose Creek and adding a mid-block pedestrian crossing. Total project costs are estimated at roughly $2 million, funded by a Clean California grant and city streets funds. Construction is expected to wrap up by fall 2026.

Nuisance abatement: 825 Industrial St.

The council will revisit a request to demolish the former Bert & Ernie's sports bar at 825 Industrial St., a long-vacant building near the intersection of Industrial Street and Hilltop Drive that has become one of the city's most persistent nuisance properties.

The bar closed in 2012 and the building has deteriorated steadily since, attracting unauthorized entry and repeated emergency responses. A fire in May 2025, believed to have been human-caused, destroyed much of the structure and the city red-tagged the building.

Then, on Dec. 16 — one day before the property owner faced a code enforcement hearing — a second fire broke out. The Redding Fire Department determined the blaze was arson after videos showed multiple people leaving the building at the time of the fire. The building was declared a total loss.

Efforts to resolve the matter with the property owner, George Somers, have been complicated by his death in August 2025. The property is held by Fossil LLC, and according to city documents it is unclear who is now responsible for it. The city's Administrative Hearings Board upheld an abatement order in December authorizing demolition and imposing up to $80,000 in potential penalties.

When staff first brought the demolition request to the council Jan. 20, they sought $40,000 from general fund reserves. The council directed staff to find an alternative funding source. Staff is now proposing to use salary savings from two vacant positions and one unpaid leave in the Development Services Department to cover the estimated $30,000 demolition cost plus contingency, carrying a net-zero fiscal impact to the general fund.

A tax auction for the property is scheduled for Feb. 27, but staff argued waiting introduces further uncertainty while the structure continues to attract trespassing and hazardous activity.

Traffic safety grant

The council will ratify a $689,226 grant application to the California Office of Traffic Safety for the Selective Traffic Enforcement Program. The one-year grant, which requires no local matching funds, would fund a dedicated DUI enforcement officer, overtime for traffic enforcement operations, three patrol vehicles and six motorcycle-mounted radar devices. The grant period would run from Oct. 1, 2026, through Sept. 30, 2027.

Flood recovery update

During the presentations portion of the meeting, a U.S. Small Business Administration representative will brief the council on services available to Shasta County and Redding residents affected by December 2025 flooding. The council has continued a local emergency declaration related to the flood event since January.

Closed session

Prior to the general meeting, at 4:45 p.m, the council will go into closed session on four items: a performance evaluation for the city attorney, a combined recruitment and labor negotiation item regarding the city attorney position, a conference with labor negotiators on contracts for two Redding Independent Employees' Organization bargaining units and a real property negotiation involving the Redding Motorsports Park and Redding Drag Strip on Old Oregon Trail.

The Redding City Council meets at the Civic Center Council Chambers, 777 Cypress Ave. The closed session begins at 4:45 p.m. and the regular meeting at 6 p.m.

And that's the Agenda Preview