Snoqualmie staff recommend accepting $6.87 million Ecology loan to build reclaimed-water reservoir

The City of Snoqualmie considered a resolution (AB 25-023) to accept a $6,866,000 low‑interest loan from the Washington State Department of Ecology to build a new reclaimed‑water reservoir.

Andrew Vining, engineer, presented the loan package and told the committee the state offered a 30‑year term at an effective 1.6% interest rate. Vining said the loan is more competitive than issuing market‑rate bonds and that the city will continue to bring individual construction contracts back to council for approval under city financial policy.

City staff and the committee focused on how the loan affects city finances. Finance Director Drew Boutet and bond counsel from Pacifica Law Group were present to answer questions. Committee members pressed for clearer budget language and an amortization/debt‑service picture; one member asked that the agenda summary explicitly state the loan amount, interest rate and term rather than a generic “no budget impact” statement.

Boutet and other staff clarified that the City does not pay interest on the total loan until it draws funds. Reimbursement requests to Ecology would be staged as project costs are incurred; if the city draws only part of the loan at first it pays interest only on that amount. Staff also noted Ecology’s published effective rate of 1.6% includes a 0.3% Ecology administrative charge. The loan packet attached to the agenda includes a $30,000 line for grant/loan administration and references an approved indirect cost rate listed in the materials.

Committee members asked about audit and federal‑funding requirements. Staff said the contract cites a standard audit provision: recipients that expend $750,000 or more in federal awards in a fiscal year must obtain a single audit; the city has been subject to such audits in recent years because of ARPA and other federal funds.

After discussion, the committee agreed to advance the resolution for council consideration on the nonconsent calendar; the meeting transcript records committee members saying staff should “take this forward” and that the item will be placed on nonconsent for the next council agenda. The committee did not record a final vote on adoption of the loan in the transcript; staff said formal project contracts and any reimbursements will return to council for separate approvals.

Next steps: staff will add the requested budget and debt‑service detail to the agenda materials, continue coordination with bond counsel and Ecology, and present the item on the nonconsent calendar for council consideration. Construction timelines in the packet show an anticipated project schedule through June 30, 2026, and staff said bids are being lined up to meet that deadline.