Bay Area Gets $168M in EPA Water Investment Loans
Silicon Valley Clean Water and the Oro Loma Sanitary District on Aug. 17 announced two federal Water Infrastructure Finance and Innovation Act (WIFIA) loans totaling $168 million from the the US Environmental Protection Agency for water system upgrades in Redwood City and Alameda County in California.
SVCW, which serves 220,000 people in the communities of Belmont, Redwood City, San Carlos, and the West Bay Sanitary District, received a loan of $143 million, and themOro Loma district, which serves unincorporated communities of Alameda County, received $25 million.
The loan to SVCW will be split, with $69 million to support the $554-million Regional Environmental Sewer Conveyance Upgrade program (RESCU) and $74 million ford the $140-million wastewater treatment Plant reliability upgrades.
The RESCU program will replace and rehabilitate SVCW’s wastewater conveyance system. Aspects of the project, which use a progressive design-build project delivery method, include upgrades to the gravity pipeline, front of the plant and pump stations. Construction began in 2018 and is anticipated to complete in April 2023.
The wastewater treatment plant project began construction in mid-2018 and is planned to finish by December 2026. The facility was originally constructed over 40 years ago and is beyond its useful life, requiring major improvements. “The project entails upgrading primary, secondary, tertiary, and solids handling processes, and improves energy systems to provide reliable treatment for decades,” says SVCW General Manager Teresa Herrera.
She says SVCW’s proposed projects were attractive to EPA because of their sustainability and environmental benefits, and the agency has demonstrated that the RESCU project is on schedule and within budget.
SVCW’s WIFIA loan will close Sept. 24, but the agency has chosen not to immediately draw funds from it, says Herrera. EPA agreed to a structure under which the agency concurrently issues interim notes that will be placed in an escrow account and used to fund construction, she says.
Repayment of the notes must occur in 2024 for the RESCU project and in 2026 for the wastewater treatment plant, at interest rates lower than that offered by the WIFIA loan. “Once construction is complete, SVCW will repay the notes from a single large drawdown from the WIFIA Loans,” says Herrera, adding that this arrangement will save SVCW Members approximately $7 million.
These loans are in addition to a $218-million WIFIA loan to SVCW in 2019 to support the RESCU project.
The $25 million WIFIA loan to Oro Loma Sanitary will support the Sewer Collection System Pipeline Rehabilitation and Replacement project. This project aims to provide more reliable wastewater service while increasing protection of the community and nearby waterways from sewer overflows. By improving system reliability, the project will provide significant annual resource savings and the community will benefit from 1.3 million gallons of potable water as well as a reduction in 1,000 hours of maintenance costs and over $100,000 in operating costs each year, say Oro Loma project officials
EPA says construction and operation of the WIFIA-financed projects at SVCW and Oro Loma Sanitary District are expected to create more than 2,500 jobs.
The WIFIA program, established in 2014, is a federal loan and guarantee program administered by EPA to accelerate investment in the nation's water infrastructure by providing long-term, low-cost supplemental credit assistance for regionally and nationally significant projects. EPA says that 55 national WIFIA loans are providing $10.6 billion in credit assistance to help finance nearly $24 billion of water infrastructure.
