OKLAHOMA CITY – The Oklahoma City Water Utilities Trust has been cleared to apply for financial assistance of up to $80 million to expand the city’s water infrastructure, a majority of which will come from revolving fund programs co-administered by the Oklahoma Water Resources Board and Department of Environmental Quality.
The trust received unanimous City Council approval Wednesday to file the applications. By city charter, six affirmative votes are needed to incur taxpayer debt.
Joe Freeman, chief of the OWRB’s Financial Assistance Division, said some of the paperwork through his office has already been completed. Of the total amount approved by the City Council on Wednesday, debt of $37.57 million will be processed through the state program established for wastewater-treatment goals and $20 million through a loan fund for drinking water.
City officials plan to come up with the balance through other funding sources if needed, Freeman said. Utilities Director Chris Browning said about 40 percent of the city’s major water projects can be backed by budgeted cash and don’t require debt.
Oklahoma City is a primary water provider for the rest of the metro because the city’s trust sells to municipalities such as Yukon and Moore, while Norman and Edmond have as-needed purchase agreements typically triggered during summer months.
By using the loan program, Oklahoma City also helps lower the costs for those cities and rural water districts, which would otherwise need upgrades for their own systems. Oklahoma City also has a triple-A credit rating, which improves the credit rating for the entire pool of debtors who are eligible for loans from the Oklahoma Drinking Water State Revolving Fund. Most communities in Oklahoma are so small they don’t even have credit ratings to back such work, Freeman said.
Freeman said that because of the city’s strong credit history and the state program’s standards, trust customers would save a total of about $5.3 million over the life of a hypothetical, combined 30-year loan of about $57.57 million compared with traditional financing. Freeman said city officials might want to close the deal with different terms, which would change the overall savings.
Browning told City Council members another advantage of using state revolving funds is that the program does not require a 10 percent reserve as would be the case in a traditional municipal bond structure.
Browning said the funds will be used, in part, for the Hefner-Draper interconnect, a 22-mile pipeline project that will connect the treated water infrastructure between the city’s Lake Hefner and Lake Draper water treatment plants. Two sections of pipeline are planned, and both will connect to pipeline already in place.
When complete, that project will provide improved resiliency throughout the treated water delivery system by creating a redundancy between Hefner and Draper, he said. That will provide continuity of service for all Oklahoma City residents in the event of a plant outage or severe drought conditions. Currently, the Hefner and Draper water treatment plants each serve a specific portion of the city in separate, closed systems.
The idea for the project was generated from the city’s 2003 master water plan, championed by City Manager Jim Couch, who was praised on his last day of work Wednesday for moving that long-term vision forward in many ways. The master plan initially identified a need to create a connection between raw water sources. However, with existing infrastructure already in place between the two plants, it was later determined that connecting the treated water delivery would not only help the city realize an overall cost savings, Browning said, but also provide a better continuity of service by connecting treated and not raw water delivery.
