The $272 million line of credit will fund upgrades at Lander Street as well as a Boise River temperature mitigation project.
BOISE, Idaho —
This article originally appeared in the Idaho Press.
City officials announced Friday that Boise will be awarded a $272 million federal loan to fund sewer and water projects.
Administered by the U.S. Environmental Protection Agency, the Water Infrastructure Finance and Innovation Act (WIFIA) of 2014 provides funding to state and local governments for water and sewer infrastructure projects. Boise officials say the funding will help improve water quality and reduce sewer fees.
“This is really big news, good news for our city,” said Boise Mayor Lauren McLean during a news conference Friday at the city’s Lander Street Water Renewal Facility. “It makes it possible for us to provide the work that we said we would: provide clean water, affordable rates, etc., through our water bond proposal that the public voted ‘Yes’ for at such a high level.”
Last month, Boise voters approved a ballot measure allowing the city to bond $570 million for wastewater projects. Voters overwhelmingly approved the bond with 81% voting in favor of it. As a result of the bond, sewer rates will increase about 10% next year and 230% over 20 years.
Boise Public Works Director Steve Burgos said the federal loan should lower sewer fees. By how much, Burgos said he won’t know until the loan is factored into a financial analysis.
The $272 million line of credit will fund upgrades at Lander Street as well as a Boise River temperature mitigation project, Burgos said. The city will need to identify more specific uses of the funds within five years. The Environmental Protection Agency will provide up to 49% of funding on a project while the city will cover the remaining 51%.
The interest rate on the loan is 2%, less than a 2.5% to 3% expected rate from a private lender, Burgos said.
“It allows us to draw on these funds as we need them so the interest only accrues as the funds are used,” he said, “which is a huge advantage over the private sector bonds that we would access.”
City officials began considering the federal program last spring, Burgos told the Idaho Press. In July, the city submitted a letter of interest to the Environmental Protection Agency (EPA). But the November sewer bond had to pass before the city could access the funds, per state code, Burgos said.
It’s the first Water Infrastructure Finance and Innovation Act loan issued in Idaho. The Environmental Protection Agency has issued 63 similar loans, providing $12 billion in credit assistance for water infrastructure projects, said Matt Szelag, Idaho operations office director for the EPA. The program is a “tried and tested financing tool,” Szelag said.
“WIFIA is accelerating investments in the nation’s water infrastructure by providing long-term, low cost supplemental credit assistance for select projects,” he said. “…the WIFIA process is competitive and coveted. We look forward to working with the city of Boise, to support this project that will provide water resource resiliency and protection against extreme drought, improve water quality for the Boise River, modernize aging infrastructure and provide capacity for future population growth.”
This article originally appeared in the Idaho Press. Read more at IdahoPress.com
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