How is the project being paid for?

The City of Wichita Public Works and Utilities submitted a letter of interest (LOI) in Summer 2021 to the Environmental Protection Agency’s (EPA) Water Infrastructure Finance and Innovation Act (WIFIA) program seeking financing for the Biological Nutrient Removal (BNR) project. In December 2021, the WIFIA program announced that the City of Wichita was one of 39 projects invited to apply for the loan. The loan allows the city to finance 49% of the estimated $357 million project through a low, fixed-interest federal loan with a delayed repayment schedule. The federal loan is expected to be paired with a State Revolving Fund (SRF) loan through the Kansas Department of Health and Environment’s (KDHE) Water Pollution Control Revolving Loan Program. SRF loans offer a low-interest rate, delayed repayment, and low financing costs. A combination of WIFIA and SRF is the optimum approach for minimizing wastewater rate increases.

In December 2021, City Council approved proceeding to 30% design, cost confirmation, and funding applications. The engineering design work for Plant 2 was awarded to CDM Smith while the Plant 1 and Collection System design work was awarded to PEC. Both firms have proceeded with confirmation and refinement of the concept plan and are currently working on the firm costing of those configurations. With those elements in place, the work will become even more important in further refining the critical elements of the projects to be included with the most benefit to the City and its residents. The Project Steering Committee will be brought back together soon for a full update on the progress and to weigh in on some of the value engineering elements being considered. This will be done to keep the current design phase on schedule for the funding application due dates and other contractual considerations.

In March 2023, City Council approved the WIFIA Credit Agreement (WCA) and authorized staff to insert the final interest rate which is to be determined on the Effective Date (March 17, 2023) by adding 0.01% to the rate for state and local government securities with a similar maturity as the WIFIA agreement. City Council also approved the repayment schedule of April 1, 2032 to October 1, 2061

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1. What is the City doing to minimize the project costs?
2. How is the project being paid for?