San Luis approves WIFA loan resolution for West Wastewater Treatment Plant expansion

The San Luis City Council voted to adopt a resolution authorizing the city to enter into a loan agreement with the Water Infrastructure Finance Authority of Arizona (WIFA) to finance the expansion of the West Wastewater Treatment Plant.

Mark Reeder, managing director with Stifel, Nicholas & Company, presented the financing plan and reported the proposed loan amount of approximately $26,226,000 and that negotiations secured a $1,500,000 forgivable principal component that reduces the city’s borrowing and amortization burden. Reeder said the team plans a 25‑year amortization and estimated the interest rate would be set within weeks, likely in the low‑to‑mid 3% range. He advised council that interest does not accrue until the city draws funds from the loan, so closing now would not immediately trigger interest expense.

Council members asked about the construction cost estimate and whether available proceeds would cover contractor proposals. Staff and council noted the city received a CMAR cost model that came in nearly twice the budgeted amount, and that an independent engineer is reviewing the cost estimate. Reeder said if additional funds are required the team will try to avoid borrowing more, but that the council may need to consider cash contributions or future borrowing depending on final construction pricing.

Council adopted the loan resolution and authorized staff to proceed; Reeder said closing and setting the interest rate were anticipated within about two weeks and that the city would then be positioned to award a construction contract.

Next steps: staff will complete technical corrections with WIFA, set the interest rate once market conditions permit, and return with procurement items to award construction contracts.