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Peoria council authorizes additional IEPA revolving loan to meet combined‑sewer reduction mandate
Summary
The City Council unanimously approved borrowing additional Illinois Environmental Protection Agency State Revolving Fund (SRF) money to complete year‑four sewer projects after staff said higher costs and stormwater constraints require an extra $5 million to meet a federal consent‑decree milestone.
Peoria's City Council on Tuesday unanimously adopted an ordinance authorizing the city to borrow additional funds through the Illinois Environmental Protection Agency State Revolving Fund Loan Program to continue combined‑sewer‑overflow (CSO) reduction projects.
City Manager Grama told the council the city has completed roughly $13.5 million of projects from earlier tranches and is paying about $700,000 in principal and about $120,000 in interest annually on that completed work at an interest rate “about 1.87 percent.” He said the city originally sought a four‑year authorization of about $32 million but now needs to request an extra $5 million because year‑four projects are estimated at $12 million and inflation and site conditions have raised costs.
The loan will finance CSO work the city says is required under a federal consent decree. “It’s a binding consent decree with the US Department of Justice and the US Environmental Protection Agency,” Grama told the council, adding that the EPA will be inspecting and monitoring the projects.
Council members pressed staff on financing details. Council member Kelly asked whether interest accrues while projects are under construction; Grama said he did not have that specific answer immediately and would follow up. Grama also said market borrowing would likely carry higher interest: “If we were to go out on the market and bond for this, we’d probably be in the 4 and a half percent range,” roughly more than double the SRF rate.
Council member Kelly moved to approve; council member Vailpula seconded. The motion passed unanimously.
Why it matters: The SRF borrowing finances infrastructure meant to reduce CSO runoff under federal oversight. Staff said meeting the decree’s early milestone — reducing 20 percent of CSO runoff in the first four years of the program — requires finishing the larger, year‑four project scope despite higher costs.
What happens next: Staff will finalize the loan documents with IEPA and return with any follow‑up clarifications council members requested about interest accrual and the loan payment schedule.
