$6.3M loan comes with subsidy
By Philip Haldiman
A flood-prone area in Peoria is getting closer to receiving infrastructure improvements that will help keep damage away.
The city council approved the authorization a loan of up to $6.3 million with the Water Infrastructure Financing Authority with a $1 million loan principal forgiveness for the construction of drainage improvements that will impact the neighborhoods between Hatfield Road and Pinnacle Peak Road and 67th Avenue and the New River.
The proposed WIFA loan will fund the improvements to improve stormwater runoff drainage and control to mitigate flooding impact to those neighborhoods.
The loan will be paid back through property taxes.
Chief Financial Officer Sonia Andrews said WIFA loans help keep water rates low for residents, and the current interest rate environment is favorable for the loan. At an estimated interest rate of 3.6%, the annual debt service amount will be about $375,500.
She said the city’s secondary property tax rate of $1.15 generates sufficient tax collections to cover the debt service for this loan.
Since 2000, the city has obtained $195 million in WIFA loans.
“When we look to finance water and waste water infrastructure, we area always looking for the lowest cost financing option available to us. …. We have the option of using WIFA loans. WIFA loans are low cost, there are also low interest rates and sometimes we qualify for subsidies, as in this case,” Ms. Andrews said.
This project is included in the FY2020-2029 Capital Improvement Program approved by Council earlier this year.
Officials say the infrastructure improvements in this area of the city will ultimately provide protection for the area from a 100-year storm, or an extreme storm with a one percent chance of occurring during any given year.
Philip Haldiman can be reached at 623-876-3697, firstname.lastname@example.org, or on Twitter @philiphaldiman.