WIFA outlines SRF portfolio, conservation grants and phased plan for long‑term water augmentation

Chelsea McGuire, interim director of the Water Infrastructure Finance Authority, told the Arizona State Senate committee that WIFA administers the state's water financing programs and is pursuing a cautious, multi‑stage process for long‑term water augmentation.

McGuire said WIFA's mission focuses on three pillars: augmentation, conservation and reliability. "Our goal is water security for the state," she said, adding the agency acts like "a bank" that turns federal and state funding into below‑market financing, forgivable principal and long repayment terms for water projects.

WIFA manages the state revolving funds (SRFs) for drinking and clean water, which McGuire described as the agency's "bread and butter." She told the committee the SRF portfolio currently holds about $1,200,000,000 and that the agency has fielded projects in every county; she said WIFA's 30‑year portfolio totals roughly $3,000,000,000.

The Water Conservation Grant Fund, created with $200,000,000 in American Rescue Plan Act (ARPA) funds, produced more than 260 applications requesting roughly $300,000,000; WIFA's board approved about 158 applications. McGuire said the funded projects are expected collectively to save about 5.5 million acre‑feet of water over their lifetimes. Governor Katie Hobbs later appropriated an additional $14,000,000 for another application round that WIFA expects to open for about 30 days.

McGuire described a separate Water Supply Development Revolving Fund targeted to rural systems, offering up to $5,000,000 per applicant (about $3,000,000 in loan plus $2,000,000 in grant) and said the current demand against that fund is about $90,000,000, with most demand concentrated on the grant portion.

On the long‑term augmentation fund, McGuire said the board identified an augmented supply need it quantified as "about 100,500,000 acre‑feet" over a 10–15 year timeframe based on conversations with water providers and academic assessments. She said importing water will be expensive and will require careful evaluation of technical, environmental and political feasibility.

To select augmentation projects, WIFA has issued a procurement structured in three phases: a qualifications solicitation (an RFP for prequalified teams), a contracting phase where qualified teams develop proposals and respond to task orders to test financial and environmental feasibility, and a phase for full project development for proposals that clear the second phase. McGuire said the phase 2 work would be public and allow stakeholder input.

McGuire asked the committee for continued support but said WIFA will return for additional appropriations only when it has a concrete project to present. She also said WIFA is compiling post‑award reporting on the conservation grants and that grantees must submit water‑use reporting to the Arizona Department of Water Resources; WIFA will compare before/after numbers, audit grant reports and work with academic partners (the transcript referenced the Kyle Center) to refine program design.

Committee members pressed McGuire on evaluation timelines; she said the deadline for expenditures under the initial conservation grant round is mid‑2026 and that preliminary spending and reimbursement reports could provide interim results within a few months. Questions from committee members also touched on rural funding sustainability, the use of public‑private partnerships and the role private capital could play in very large augmentation projects.

McGuire stressed that WIFA's solicitation is designed to harness private capital while preserving public accountability. "Everything that happens in phase 2 is in the public," she said, describing the process as "transparent" and open to stakeholder input.

Ending: The presentation concluded with committee members thanking McGuire for the overview and with no formal committee action on WIFA items during the meeting. McGuire outlined two likely future requests: additional conservation grant resources and, eventually, a specific augmentation funding request when a project is sufficiently developed.