One of the first sources of funding for the city of Boise’s massive $ 570 million water bond was announced on Friday, and city leaders say it could result in higher water tariffs for less. higher than previously imagined.
The U.S. Environmental Protection Agency has cleared Boise to take out up to $ 272 million in loans to finance upgrades to the city’s sewer infrastructure at lower interest rates than conventional bond loans , officials said.
The program, called the Financing and innovation of water infrastructure Act, allows local governments and businesses to use federal credit to finance large-scale water infrastructure projects.
Mayor Lauren McLean told reporters gathered at the Lander Street Water Renewal Plant that WIFIA is very competitively priced among city governments and will help keep rates more predictable as improvements are made.
“This allows us to offer even lower rates in the future,” McLean said.
Loans under the WIFIA program only bear interest on the money spent, rather than the full amount as is typically the case with a private bank loan, said Public Works Director Steve Burgos. This means that interest payments will be lower year on year, savings that could be passed on to customers for years to come.
Voters overwhelmingly passed the water renewal requirement in local elections last month, with more than 80% of the vote in favor, according to the Ada County Clerk’s Office, to partially fund construction of the city’s aging sewer system.
Part of that success is because the city argued that rates would rise more slowly than without obligation. City council will have the opportunity to vote on a proposed 9.9% rate hike in January.
Burgos said that despite the cash injection, the city will still seek a 9.9% increase and that smaller increases are not a certainty. With much of the market still plagued by inflation and supply chain bottlenecks, prices are still too volatile.
“We’re nervous about going into anything right now,” he said.
The city must finalize which projects will be funded and how much they will cost over the next five years, Burgos said.
This story was originally published 3 December 2021 2:10 pm.