The City of Wichita closed a nearly $280.9 million federal credit financing agreement today that will help fund a new Water Treatment Plant at very favorable interest rates – saving Wichita water ratepayers millions of dollars and ensuring a stable source of drinking water for generations to come.
For nearly a year, a City team of representatives from Public Works & Utilities, Finance and Law have been seeking alternatives to finance the new $550 million treatment plant. Today, with the completion of this credit agreement with the Environmental Protection Agency (EPA), the City can finance nearly $280 million of construction costs at a very low interest rate of 1.17%. The EPA estimates the use of financing through the Water Infrastructure Finance and Innovation Act (WIFIA) will provide cost savings of $96.5 million compared to municipal bonds of a similar maturity.
Over the past year, staff have been working with federal government representatives to secure the WIFIA loan. This process included working closely with bond rating agencies to provide an objective third-party review of Water Utility finances. Throughout this process, WIFIA staff were very knowledgeable, making the entire transaction very smooth and collaborative. The City will also be seeking financing from the State Revolving Fund for an additional $267 million, and that agreement is expected to be completed early this summer.
City Manager Robert Layton noted the importance of staff efforts in finalizing this loan: “I’d like to acknowledge the work of all staff involved, including the Director of Public Works & Utilities Alan King and Finance Director Shawn Henning. Appreciation is also expressed for the efforts of the City’s bond counsel, Gilmore & Bell, in assisting with the WIFIA loan.
This agreement is a key element in the City’s plan to construct a new treatment plant that will provide drinking water to Wichita residents for decades to come, and at a cost that is affordable for residents and businesses.”