Water Infrastructure Finance and Innovation Act (WIFIA) Program
Water Infrastructure Finance and Innovation (WIFIA for short) is a program set-up by the Environmental Protection Agency to provide funding, through low-cost, long term loans, for water infrastructure. Additional information on WIFIA can be found on the WIFIA webpage: https://www.epa.gov/wifia
The city secured a WIFIA loan to finance up to $33 million of improvements for the water system over the next 5 years. See the EPA announcement: https://www.epa.gov/newsreleases/biden-harris-administration-announces-16-million-wifia-loan-water-system-reliability
Three main projects were funded in the city’s WIFIA loan package:
- WIFIA Project 1: SCADA Isolation Project
- Improving cyber security for water supervisory control and data acquisition (SCADA)
- WIFIA Project 2: Pipe Rehabilitation Projects
- Replacement of aging and undersized water pipes
- WIFIA Project 3: Upper System Transmission Improvement Projects
- Improves transmission of water in the city’s upper water system
Why Pursue a Loan?
The City has over $81 million dollars of water infrastructure improvements identified in its Water Master Plan, as amended in 2021. The plan identifies $38 million of improvements needed in the first 5 years, reflective of deferred projects due to insufficient funding to date. To fund these improvements, increases in water system development charges (SDCs) and water rates, above the annual 3% charter limit are needed. Borrowing was identified as a strategy to reduce the needed rate increase above charter limit.
In November 2021, the City Commission placed two ballots before the voters of Oregon City:
- Measure 3-567 – Authorized the City to borrow funds for water system improvements.
- Measure 3-578 – Authorized a temporary water rate increase above the 3% annual Charter limit.
Measure 3-567 was passed by voters, authorizing the City to borrow up to $38 million. Measure 3-578 did not pass, limiting the annual water rate increase to 3% in accordance with the City Charter.
Without a rate increase above the 3% annual Charter limit, the City’s ability to fund water system improvements is limited, as the majority of the current rate revenue goes to maintenance of our existing system.
With borrowing in mind as an infrastructure solution, the City submitted a Letter of Interest for a WIFIA loan in June 2021. On October 27, 2021, the City received notice from the United States Environmental Protection Agency that it’s Letter of Interest was selected, and the City was invited to apply for a WIFIA Loan.
To pursue the WIFIA loan, the City is required to provide 51% of the overall WIFIA package cost as “matching”. Without voter approval of the needed rate increase, the city risked not being to meet the matching requirement. The city received $8.3 million dollars of American Rescue Plan Act (ARPA) grant funds. To pursue the WIFIA loan and fund the needed water system improvements, the city made $ 5.6 million available towards the needed water system improvements. The City authorized entering into the loan through Resolution 23-16 with the loan closing on July 20, 2023.
While the full water CIP cannot be supported without a rate increase, significant work can be completed with the WIFIA loan package, providing a more resilient, reliable water supply to its customers.