Boise to access federal sewer improvement loan program, hoping to save residents money
The town of Boise will be able to access a federal program to obtain government-backed loans for planned improvements to the town’s sewer infrastructure.
Voters last month approved a bond that authorizes borrowing up to $ 570 million for what the city says are needed upgrades to wastewater infrastructure. Now, thanks to loans from the Environmental Protection Agency’s Water Infrastructure Funding and Innovation Act, the city will be able to obtain loans at an interest rate lower than that of the traditional bond market.
“As we said before the surety campaign, the board and my office are committed to making sound decisions throughout the process of modernizing our water renewal program,” said Mayor of Boise , Lauren McLean. “This will allow these projects to be carried out at even lower rates than we had planned.
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City officials say the bottom line is it will mean lower rate increases for homeowners. Passing the bond meant sewer rates would go up 9.9% for the average city customer from next year – and even with the new program, it still will. The city said during the bond campaign that rates will continue to rise by an average of 10% each year on a compound basis going forward – but the lending program may alleviate some of that.
“The modeling we did in regards to resident rates – we expected it to be based on higher bond interest rates,” McLean said. “This is where the savings will be made for residents.
Boise Director of Public Works Steve Burgos told BoiseDev that EPA-guaranteed loans carry an interest rate of 2%, which is lower than the private bond market which could be anywhere between 2.5%. and 3%, and increase in the coming years. The EPA interest rate will remain stable.