Chino Valley seeks WIFA loan, state partnership to remediate PFAS at Brightstar water facility

Chino Valley’s Town Council on May 26 authorized staff to pursue a Water Infrastructure Finance Authority (WIFA) loan and related agreements to finance PFAS remediation at the Brightstar Water Production Facility.

Consultant Mark Holmes and finance director Katie Pel told the council that testing identified an exceedance for PFOA and that Corollo Engineering had evaluated four alternatives. Staff identified an on-site treatment system at Brightstar as the permanent remedy and said the Arizona Department of Environmental Quality (ADEQ/ADQ) has agreed to participate with a $5.1 million contribution. Corollo’s preliminary estimate for the chosen remedy ranges from roughly $8 million to $10 million, with an engineering accuracy band of –20% to +30%.

“Alternative one was chosen as the ultimate remedy,” Mark Holmes said during the presentation, summarizing the engineering team's recommendation for an on-site PFAS treatment system at Brightstar. Finance Director Katie Pel told the council staff intends to submit the WIFA application immediately and said the town is expecting a funding structure that could be about 90% principal forgiveness and 10% loan, though final terms depend on WIFA board decisions and available funds.

Katie Pel said the town must authorize the full loan amount in order to apply; if most principal is forgiven the town’s net cost could be roughly $500,000. She also said staff expanded the requested WIFA capacity to $10 million to provide contingency for higher-than-expected costs. "We are first in line and we do plan to get the application out tomorrow if possible," Pel said.

Council members questioned contingencies and long-term operations. Mark Holmes said the remediation facility would be a long-lived utility asset and that vessels and media used in treatment have finite lifespans requiring future replacement; he estimated the facility could operate for multiple decades with periodic maintenance and media replacement. Staff said estimates of operations-and-maintenance costs will be incorporated into future budgets.

Council approved the resolution authorizing application for a WIFA loan on a unanimous roll call vote. Next steps include submitting the WIFA project finance application, negotiating intergovernmental agreements covering disbursement and invoicing with WIFA and ADEQ, securing a construction manager-at-risk to work with engineers to reduce costs, and returning to council for final loan documents and acceptance of any principal forgiveness or revised loan terms.

The council’s action authorizes staff to proceed with application steps; the town will report back when WIFA and state approvals are known.