Council authorizes up to $50 million SRF loan for Alvarado trunk sewer; construction expected 2026–2029

The San Diego City Council on Feb. 10 authorized the mayor to pursue a Clean Water State Revolving Fund (SRF) loan of up to $50,000,000 for the Alvarado Trunk Sewer Phase 4, Package A project.

Kevin Warner of the Department of Finance explained the SRF offers low‑cost financing administered by the State Water Resources Control Board. Under the presentation, the loan would carry a senior lien on sewer revenues, principal repayment beginning after completion of construction, and a 30‑year term. Staff noted the current SRF rate was about 2.2%; actual interest and debt service will be set when the loan is finalized.

Public utilities staff indicated construction has not yet been bid; the council was told the loan authorization is required by the state to enter the loan agreement. Deputy Director Adam Jones said that construction contracts above the city threshold will return to council for award, and principal will not be drawn until design and bid phases advance.

Councilmembers asked procedural and timing questions. Councilmember Von Wilpert confirmed that if the construction contract exceeds the reporting threshold (about $30 million) it will return to the council for a separate vote. The council approved the SRF loan authorization; the clerk recorded the vote as unanimous in favor in the meeting record.

Staff estimated annual debt service for a $50 million loan at approximately $2.3 million but noted the rate and final debt service will vary depending on when the loan is executed.