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Sunnyvale authorizes up to $50 million in state SRF financing for wastewater plant upgrades
Summary
Council approved a resolution authorizing the city manager to execute an installment sale agreement and related documents for up to $50 million in State Revolving Fund (SRF) financing to support the wastewater pollution control plant rehabilitation project; staff said the SRF loan would lower borrowing costs compared with taxable debt.
The City Council authorized the city manager to enter into an installment sale agreement for up to $50 million in State Revolving Fund financing with the State Water Resources Control Board to fund work on the city’s wastewater pollution control plant rehabilitation project.
Public works staff explained the SRF loan would carry a very favorable interest rate (2.1% as quoted in April) and could replace higher‑cost pay‑as‑you‑go expenditures or taxable borrowing in the project financing mix. City staff estimated the swap could save roughly $20 million over the life of the debt compared with higher‑interest alternatives.
Project and timeline: the rehabilitation project is one component of the broader Sunnyvale Clean Water program; construction is underway and the rehab project completion is scheduled for January 2027. The overall project includes prior and concurrent work (primary and secondary process projects and electrical rehabilitation). Staff told council the SRF closing is targeted for July 2025; some administrative coordination will be required to replace other financing drawn for the project.
Why it matters: this loan will reduce the long‑term cost of financing a major city infrastructure upgrade and allow the city to apply lower‑cost SRF proceeds toward reimbursing construction expenditures already incurred. The City’s financing choices affect long‑term rates and reserve planning for the utilities.
Council action: Vice Mayor Selle moved adoption of the resolution authorizing the city manager to execute the SRF installment sale agreement and related documents; the motion passed 6‑0 with Council Member Cisneros absent. Staff will finalize loan closing details with the state board and implement required reporting and labor compliance procedures tied to SRF assistance.
Ending: Council and staff emphasized the fiscal benefit of lower interest SRF financing and the need to continue coordination with federal and state lenders as the plant rehabilitation proceeds.
