San Luis council seeks roughly $12 million to close funding gap on west wastewater plant expansion

The San Luis City Council voted May 13 to authorize staff to apply for about $12 million in additional financing from the Water Infrastructure Finance Authority of Arizona (WEIFA) to help close a funding gap on the west wastewater treatment plant expansion.

Roland Cena, director of public finance, told the council the city was previously approved for approximately $26.2 million through the Clean Water State Revolving Fund program but that the lowest responsive construction bid came in near $41 million, creating the shortfall. "Due to the increase in construction cost, staff is requesting authorization to apply for approximately $12 million in additional funding to help close the remaining funding gap," Cena said.

Council members questioned how the city would repay any additional loan. Cena said the remaining balance beyond the WEIFA request — about $3 million — would come from the wastewater utility reserve and that the city will review utility rates and impact fees to cover future debt service. "We are going to review our utility rates and we are going to review our impact fee rates," Cena said.

The council heard technical and timing details from public works staff. Mr. Vera, the director of public works, described the expansion plan as a doubling of west-plant capacity from 1.5 million gallons per day to 3.0 million gallons per day and said environmental clearances and design milestones remain on the project schedule. He added that shortening or redesigning scope could reduce cost but would also reduce future capacity.

Several council members voiced concern about passing additional costs to residents. Council Member Luis Cabera warned, "The community is not going to be happy about having to pay additional utility rates," and pressed staff on alternatives, state or regional partnerships, and whether a smaller scope could be considered. Staff said the city has limited alternatives: existing wastewater revenue is insufficient to cover debt service, and permanent operational measures such as diverting flow to the east plant would constrain growth in the west service area.

Council members also discussed timing risks: staff reported the west plant is operating near capacity thresholds that trigger planning and regulatory requirements, and delaying expansion could limit future permitting for new development in the west part of town.

By vote, council approved Resolution 2398 to pursue the additional WEIFA assistance; final loan terms will be returned to council for approval when available.

Next steps: staff will submit the WEIFA application and continue negotiations with the low bidder and regulatory partners; council directed staff to continue work on utility-rate and impact-fee updates that would address repayment.

Source: Public meeting of the San Luis City Council, May 13, 2026. Quotes and details are taken from the council discussion and presentations at that meeting.