Nogales council authorizes pursuit of up to $10M in WIFA loans to leverage matching water/sewer grant

The Nogales City Council voted Feb. 4 to authorize the city manager to apply for Clean Water and Drinking Water State Revolving Fund loans through the Water Infrastructure Finance Authority of Arizona (WIFA) and to negotiate loan amendments, adopting resolution R2026-01-004.

City staff described the action as a step to secure up to $10 million in low‑cost WIFA financing; staff said the likely borrowing need is about $8 million and that the loan would be coupled with an $8 million matching grant from the NAD Bank (as discussed in the meeting) to fund repairs and replacement of aged water and sewer infrastructure. Staff noted that some pipes in the targeted area date back to the early 20th century and said they are lined and failing in places; a comprehensive engineering study to map shutoff valves, manholes, line materials and other assets will precede or accompany project design.

A city financial adviser told the council the WIFA loans are secured by the water/wastewater enterprise and that, while additional borrowing affects total city debt, the adviser did not expect a negative bond‑rating downgrade tied to the loan issuance. Counsel and staff emphasized that the resolution authorizes application and negotiation but that any final loan issuance would return to council for approval.

The council approved the resolution by voice vote; the mayor called for the ayes and the motion passed. Council members said the matching grant opportunity made pursuing the loan attractive and directed staff to return with further details and the engineering study results as work proceeds.

Action item recorded: resolution R2026-01-004 (authorize WIFA loan applications).