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Cody approves $2 million drinking-water loan with 25% principal forgiveness for PRV upgrades
Summary
Council approved the Drinking Water State Revolving Fund loan agreement DW‑268 for $2,000,000 to fund pressure‑reducing valve replacement and upgrades, authorizing the mayor to sign and approving a $10,000 loan-origination fee.
The City of Cody council approved a Drinking Water State Revolving Fund loan agreement (DW‑268) with the Wyoming State Loan and Investment Board and authorized the mayor to sign the documents. The council also approved payment of the $10,000 loan‑origination fee required to initiate the agreement.
City staff explained the loan covers the pressure reducing valve (PRV) replacement and upgrade project, identified as priority number 2 in the city’s 2021 water master plan. The loan approved by the state totals $2,000,000, is structured as a 20‑year loan with an interest rate of 1.5 percent, and the agreement includes eligibility for principal forgiveness of 25 percent (up to $500,000) subject to conditions in the loan agreement.
Philip (staff) summarized repayment scenarios presented to council: if the city receives no principal forgiveness the amortization schedule in the packet shows about $116,500 per year; if the stated 25 percent principal forgiveness is granted under the agreement’s conditions, the annual payment would be lower (staff provided the estimate and explained the forgiveness conditions). The loan agreement lists conditions for principal forgiveness that include making the first draw within 18 months after execution, making draws at least quarterly while the project is ongoing, full compliance with terms and conditions of the agreement, and paying accrued interest as required by the program.
Staff said the project design is expected in calendar year 2025 with construction in 2026, and that the city has selected an engineering firm (Dura) to finalize scope and fee prior to bringing an engineering contract to council.
Council voted to approve the loan agreement DW‑268 and separately approved payment of the $10,000 origination fee; both motions carried on voice votes.
Ending: With loan approval and origination fee authorized, staff will finalize engineer contract and begin design work this year with construction anticipated in 2026 pending procurement and project schedule.
