On March 10, the U.S. Environmental Protection Agency (EPA) announced a $62 million Water Infrastructure Finance and Innovation Act (WIFIA) loan to the city of Morro Bay, Calif., to replace its 63-year old wastewater treatment plant with a new treatment and water recycling facility.

These improvements should help reduce discharges into the ocean as well as increase water supply and flood resilience. Morro Bay (population 10,600) is the first small community nationwide to receive a WIFIA loan. The city will replace its existing treatment plant to help supplement the city’s water supply, reduce reliance on imported water and improve groundwater quality with the addition of highly treated water. In addition, the new facility will be moved inland to increase its resiliency and reduce the risk of flooding.

“Securing this low-interest federal funding is a sound financial decision for the City,” said Mayor John Headding. “Signing the agreements now means that we will lock in near-historic low interest rates and ensure maximum benefit for our rate payers.”

This water reclamation project will cost $126 million. EPA’s WIFIA loan will finance nearly half of that figure—up to $62 million. Additionally, the California State Water Resources Control Board will finance approximately $64 million from its Clean Water State Revolving Fund Loan Fund. The WIFIA loan will save the City of Morro Bay an estimated $29 million compared to typical bond financing. Project construction and operation are expected to create 403 jobs.

“This WIFIA loan will help improve water quality in Morro Bay, while using advanced water reuse technology to help provide an enduring source of water to the small community of Morro Bay,” said EPA Administrator Andrew Wheeler. “Through WIFIA, EPA is playing a key role in President Trump’s efforts to improve and upgrade our nation’s water infrastructure. With this loan closing, EPA has now issued 17 WIFIA loans totaling $3.7 billion in credit assistance to help finance $8.4 billion for water infrastructure projects while creating more than 16,000 jobs.”

The WIFIA program was established by the Water Infrastructure Finance and Innovation Act of 2014, and is a federal loan and guarantee program at EPA that aims to accelerate investment in the nation’s water infrastructure by providing long-term, low-cost supplemental credit assistance for regionally and nationally significant projects in addition to providing thousands of jobs.  For more information, click here.

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This Week in Washington is compiled by the WEF Government Affairs department. Please contact us with any questions or comments.

Claudio Ternieden
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Steve Dye
Legislative Director

Amy Kathman
Government Affairs Specialist