Mountain Regional Water wins council approval to pursue up to $43M WIFIA financing for treatment-plant expansion

Mountain Regional Water Special Service District representatives Steve Anderson and Lisa Hoffman returned to the Summit County Council on June 25 to seek authority (parameters) to issue up to $43,000,000 in water revenue bonds to finance a treatment-plant expansion and related costs. Anderson summarized the financing plan, the district’s WIFIA (Water Infrastructure Finance and Innovation Act) strategy and projected rate impacts.

Project and financing details presented to the council included: - Construction costs and contingency: base construction of approximately $6,800,000 in identified construction items plus a recommended construction contingency; staff recommended adding an additional $2,000,000 contingency line the WIFIA package to avoid mid-project shortfalls. - Planned borrowing and drawdown: the district requested a financing parameter of $43,000,000 but said the planned drawdown is roughly $34,300,000 (the $43M parameter includes contingency flexibility). - Grants/other funding: the district has secured Division of Drinking Water funding including a $2,000,000 loan with principal forgiveness; impact fees and district cash will be used for the non-federal share required by the WIFIA program (federal monies can typically cover up to 80% of eligible costs). - Timeline and rate strategy: the district plans to delay loan drawdown until early 2027 to minimize accrued interest costs and to seek a 1‑time interest-rate reset when funds are drawn if interest rates fall; the expansion would increase treatment capacity from about 2.6 million gallons per day to 5.5 million gallons per day and provide source capacity for the district for roughly 30 years. Staff projected phased customer-rate increases in the 3–5% range in most years with possibly larger one-time increases around 2034 when debt-service ramps up, depending on growth and other factors.

Council members asked about total outstanding debt (total parity), debt-service-coverage assumptions, reliance on impact fees and how the district planned to avoid reliance on projected growth. Anderson said the district used conservative growth assumptions (roughly 2% customer growth) and a debt-service-coverage cushion that avoided pushing coverage ratios near minimum thresholds. He said the WIFIA loan’s 35-year amortization and flexibility to capitalize interest before payments begin helped keep near-term rate impacts lower.

Council Member Canis moved to adopt the resolution authorizing issuance and sale of not more than $43,000,000 in water revenue bonds (MRW 25-13); the motion was seconded and passed by voice vote.

Why it matters: the plant expansion is a long-term infrastructure investment expected to double treatment capacity and support projected growth; financing choices will affect long-term district debt and future utility rates.

Next steps: the district will continue WIFIA closing work, hold a public hearing on July 26 and plan a 2027 drawdown schedule that seeks to minimize interest expense while matching the construction schedule.