Peoria officials are moving forward with plans to improve drainage between Hatfield and Pinnacle Peak roads and 67th Avenue and the New River.
At its first meeting since a July recess, Peoria City Council unanimously approved a resolution to take out a nearly $6.3 million loan with the Water Infrastructure Financing Authority (WIFA) to fund the improved drainage system.
The $7.4 million project — called the Section 12 Neighborhood Drainage Improvements in the city’s new 10-year capital improvement program — will improve storm water runoff drainage and control to alleviate flooding to neighborhoods within the associated boundaries. According to Peoria’s CIP,
the city will specifically improve basins, channels, roadway and storm drains.
Sonia Andrews, the city’s chief financial officer, told Peoria Times the two-phase project should be complete this winter.
The project, just one component of the Glendale-Peoria Area Drainage Master Plan, was deemed necessary following a drainage study completed in 2017, according to the CIP.
Though Andrews said some of the funding was expended in the last fiscal year, the city ultimately sought the support of WIFA.
“When we look to finance water and wastewater infrastructure, we’re always looking for the lowest-cost financing option available to us. To finance water and wastewater infrastructure, we can use GO bonds, we can use revenue bonds or we have this option of using WIFA loans,” Andrews said at the recent meeting.
Since 2000, the city of Peoria has received more than $195 million from WIFA, with these loans previously supporting the Pyramid Peak Water Treatment Plant, the Greenway Water Treatment Plant and the Butler Water Reclamation Facility.
“WIFA loans are low cost — there’s no closing or issue cost — (they also have) low interest rates, and sometimes we qualify for some subsidies. And so, with the low cost and subsidies, we can keep our water/sewer rates low,” Andrews explained.
An interest rate on the 20-year loan will be determined at loan closing. Not to exceed 4%, it is estimated in the agenda to be 3.6%.
The city will repay WIFA an estimated annual debt service of $375,000 through a $1.15 secondary property tax rate, the document continued.
But, in addition to the $6.3 million, WIFA offered Peoria a $1 million loan principal forgiveness, which reduces the project cost by 16%, according to the council agenda.
“That means that we only have to repay $5.3 million of the loan,” Andrews said of the subsidy.
Andrews cited environmental impacts, WIFA scoring and a strong partnership with WIFA over the years as factors for receiving the subsidy.
“That’s great. Really good news,” Mayor Cathy Carlat concluded.