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Council approves $7.297M water revenue bond to complete phase one of South Water Storage Project
Summary
Whitefish approved Resolution 26‑17 to issue a $7,297,000 water system revenue bond (series 2026) for phase one of the South Water Storage Project after DEQ determined earlier rate thresholds would not permit loan forgiveness; loan term is 20 years at about 2.5% effective (2% interest + 0.25% admin + 0.25% loan‑loss surcharge).
Whitefish — The Whitefish City Council unanimously approved Resolution 26‑17 on June 15, authorizing a $7,297,000 water system revenue bond through the Drinking Water State Revolving Loan Program (series 2026) to fund phase one of the South Water Storage Project.
Finance staff member Laney told the council that the prior A/B structure (including a $1 million forgiveness component) was superseded after DEQ determined the city’s current average water and combined water/sewer rates did not meet forgiveness eligibility thresholds. The revised structure consolidates financing into a single loan of $7,297,000 with a 20‑year term and interest at 2% plus two surcharges of 0.25% each (administrative and loan‑loss reserve), for an effective borrowing cost of roughly 2.5%.
Laney said phase one total cost is $8,467,000 and will use $1,160,000 in water impact fees alongside the loan. The multi‑phase project includes a storage tank platform (under construction), an 18th Street extension, a Greenwood Drive pump station and an additional supply line between 13th Street and Greenwood in subsequent phases.
Councilors discussed the rate math and the policy implication that conservation, second homes and lower billed usage affect average rates and eligibility for loan forgiveness. Laney observed that conservation and “dark homes” (second homes not using water regularly) factor into the program’s average‑rate calculations.
Action taken: Councillor Rebecca moved to approve Resolution 26‑17; the motion was seconded by Councillor Sweeney and passed unanimously.
What’s next: Staff will proceed with financing and project execution for phase one; the bond resolution supersedes the May 18 bond resolution and positions the city to proceed with construction and the funding plan.
Ending: The council approved the financing change so phase one of the South Water Storage Project can move forward with a clear funding source and defined loan terms.
