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Oregon City updates commissioners on WIFIA loan, multi‑million dollar water projects
Summary
City staff told commissioners the EPA WIFIA loan will let Oregon City scale up water capital work over the next five years, but rising construction costs have reduced the amount of pipe rehabilitation and increased project budgets.
Oregon City staff updated the City Commission on the city’s Water Infrastructure Finance and Innovation Act (WIFIA) loan and the schedule for work on water transmission and rehabilitation projects.
The presentation by Public Works Director Dana Webb, Senior Project Engineer Patty Nelson and Finance Director Matt Sook summarized the loan terms, the projects included in the program and how the city plans to sequence work through 2028. "For those who don't know what WIFIA stands for, it's the Water Infrastructure Finance and Innovation Act," Webb said at the hearing.
Why it matters: staff said the loan makes it possible to increase annual capital spending on water from about $2 million to roughly $6 million over the next five years, allowing the city to tackle larger transmission and pump‑station projects that have been deferred for years. However, rising construction costs have shrunk the scope of some rehab work and elevated total program estimates.
Key details: staff said the 2020 water master plan identified about $81,000,000 in capital improvements. The city closed a WIFIA loan at about a 3.94% interest rate and has drawn a financing strategy that delays interest accrual until project draws. The program groups work into three project bundles: a SCADA/security isolation project, a pipe rehabilitation program, and a set of upper‑system transmission projects that staff say serve roughly 70% of the city’s customers south of Mountain View Street. "All this work... has to be substantially complete by 06/30/2028," Webb said.
Scope and cost changes: staff provided examples of how costs have shifted. For the pipe rehabilitation program the original plan listed eight projects for $5,500,000 and about 18,500 linear feet of pipe; current estimates show five projects for about $6,800,000 covering roughly 10,300 linear feet. Major transmission projects include the Molalla (Molalla Road) transmission project, estimated at $8,600,000, and the Henrici project with three elements (new pump station, a new 24‑inch transmission main and repurposing an existing main) now estimated at $13,000,000. Collectively, transmission project estimates rose from a planned $16.7 million to about $24.5 million.
Funding and risk: staff said the city is using a mix of WIFIA loan proceeds and local funds, including an ARPA allocation of about $5,600,000 that helped meet the city’s match requirement. They noted rate increases the city sought in 2021 were rejected by voters and explained the city used other means to secure the matching funds. The financing plan assumes continued compliance with WIFIA reporting and a multi‑year construction period; staff will submit quarterly and annual reports to the EPA.
Construction and outreach: staff said the Molalla project contractor had mobilized to the Mountain View Reservoir site and that construction trenches are not expected until April or May because of long lead times on pipe. They also flagged planned nighttime work at several signalized intersections and said the city will continue community outreach during construction.
What comes next: staff said they will continue to value‑engineer projects where possible and monitor SDC and other revenues; they will bring the work back through the budget cycle and keep the commission informed.
Ending: commissioners heard the update; no formal action was taken on the WIFIA presentation during the meeting.
