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Denton authorizes application for $60 million TWDB loan to rebuild Pecan Creek water plant
Summary
Council approved a resolution to submit an application to the Texas Water Development Board for $60 million from the Clean Water State Revolving Fund as part of a larger Pecan Creek Water Reclamation Plant reconstruction to increase capacity to 30 MGD; staff plans to pair CWSRF funds with WIFIA to lower overall borrowing costs.
City staff on Tuesday won council approval to submit an application for a $60 million low-interest loan from the Texas Water Development Board—s Clean Water State Revolving Fund (CWSRF) to finance a portion of the Pecan Creek Water Reclamation Plant reconstruction.
Project overview: Kyle Pedego, planning and engineering division manager for Water Utilities, said the full reconstruction is estimated at roughly $500 million to increase treatment capacity to 30 million gallons per day and to modernize treatment processes. The TWDB included the project in its 2026 intended use plan with $326 million in eligible costs; the city was invited to apply for $60 million in fiscal 2026.
Funding strategy: Staff intends to pair CWSRF funding (the $60 million ask) with a Water Infrastructure Finance and Innovation Act (WIFIA) loan that may finance up to 49% of an approved project; the CWSRF award would serve as the City—s local match to leverage WIFIA and extend repayment terms. Both applications are under review; the CWSRF application is due Dec. 4 and staff expects a decision between January and March, with a letter of commitment possible in April 2026.
Council action: Council approved the resolution 7-0, authorizing the submission of the TWDB forms, designating signatories and allowing staff to proceed with the application. Staff cautioned that neither award is guaranteed and that the city will return to council if and when loan terms are presented before closing.
Next steps: Staff will submit the completed CWSRF application before the December deadline and continue WIFIA coordination. If awarded, the combined financing would reduce interest costs versus traditional bond issuance and extend payback up to 30 years per program rules.
