Riverbank council approves form of loan agreement for recycled‑water project amid calls for more study

Riverbank City Council voted on June 10 to approve a resolution authorizing the city to use a construction installment sale agreement with the California State Water Resources Control Board to finance a portion of Phase 1 of the Riverbank Regional Recycled Water Project.

The agreement approved by the council authorizes staff to finalize the form of the agreement and pledges net revenues of the city’s wastewater enterprise as the repayment source if the city later executes the loan. The motion as approved also directed staff and consultants to continue studying alternatives and to return with additional feasibility information and community briefing materials.

The council debate and public comment were lengthy and sharply focused on cost, timing and alternatives. City staff told the council the State Water Board offer would finance up to $85 million at about a 2% interest rate over 30 years; staff said that financing would cover a substantial portion of current construction estimates but not the full project cost. Public works/utility staff cautioned the council that the city is operating under an old wastewater permit and that regulatory standards are tightening. “Our facility, the technology is very, very old,” a utilities‑division staff member told council during the presentation. He warned that changes in state water quality rules and the regional board’s reissuance of permits could require upgrades on a state timetable.

Residents at the microphone urged the council to pause before locking in large loans. “I am a single mom … to hear that we only have 60% of what is going 60% figured out is really concerning to me,” said resident Danielle Banning, citing the potential impact on household budgets. Other speakers asked whether connecting to a nearby regional plant or upgrading the city’s existing treatment facility would be lower cost. Michael Christie, a resident, asked how citizens could help lobby for grant funding at the state and federal level.

Councilmembers expressed differing views about timing. Several members said they supported taking the financing option now to preserve a low interest window and to keep options open while staff pursues additional grants (including Prop 4 and federal programs such as WIFIA). Others said the city should first complete additional feasibility and value‑engineering work and investigate regional partnerships or less expensive upgrades to existing facilities before committing to long‑term debt.

The council’s motion authorized approval of the form of the installment agreement and directed staff to return with a workshop summarizing the engineering assumptions, alternatives considered (including prior analyses of connections to other regional systems), updated project cost estimates and a financing plan that shows how any remaining funding gap would be filled. Councilmembers also asked staff to expedite outreach to the community to explain rate impacts and to return with options for mitigating impacts on households on fixed incomes.

The approval does not obligate the city to sign the final installment agreement; staff told the council that execution would occur only after the project reaches the appropriate design milestone and after council review of financing alternatives. Staff and bond counsel also noted that other lower‑cost financing opportunities may be available later and that the city could continue seeking grant awards before executing any final loan.

What happens next: staff and the project’s engineers will prepare a workshop for the council that lays out the updated design, value‑engineering opportunities, a side‑by‑side comparison of alternatives (including connecting to nearby treatment facilities), and an updated financing pro forma. Staff also said it will pursue potential state and federal grant sources and report back on whether additional grant funding can reduce the city’s borrowing need.

Council and staff emphasized they will continue to brief the public as the design and funding plan develop.