Boise to get federal credit for sewage treatment. How will that affect water rates?
One of the first funding sources for the city of Boise’s massive $570 million water bond was announced Friday, and city leaders say it could lead to water rates not increasing as much as previously imagined.
The U.S. Environmental Protection Agency has approved Boise to take up to $272 million in loans to fund improvements to the city’s sewer infrastructure at lower interest rates than typical bond loans, officials announced.
The program, called the Water Infrastructure Finance and Innovation Act, allows local governments and corporations to use federal credit to fund large-scale water infrastructure projects.
Mayor Lauren McLean told reporters gathered at the Lander Street Water Renewal plant that WIFIA is a highly competitive award among city governments and that it will help keep rates more predictable as improvements are made.
“It makes it possible for us to deliver even lower rates in the future,” McLean said.
Loans taken through the WIFIA program accrue interest only for money that is spent, rather than the entire amount as is typical in a private bank loan, Public Works Director Steve Burgos said. That means interest payments will be lower year to year, savings that could be passed on to customers in future years.
Voters overwhelmingly passed the water renewal bond in last month’s local elections with more than 80% voting in favor, according to the Ada County Clerk’s Office, to partially fund construction on the city’s aging sewage system.
Part of that success stemmed from the city arguing that rates would increase at a slower rate than without a bond. The City Council will have the chance to vote on a proposed 9.9% rate increase in January.
Burgos said, despite the injection of money, the city will still seek a 9.9% increase and that smaller increases are no sure thing. With much of the market still plagued by inflation and supply chain bottlenecks, prices still remain too volatile.
“We’re nervous about committing to anything just yet,” he said.
The city must finalize what projects will be funded and how much they will cost within the next five years, Burgos said.
This story was originally published December 3, 2021 at 2:10 PM.
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