By Kathleen Ferris
There are many Big Government programs you’ve never heard of that simply work. They don’t generate headlines, political debate or viral videos. They often have names that put people to sleep. For example, and stay with me here, the Water Infrastructure Finance Authority of Arizona or WIFA.
WIFA provides low-interest loans to communities so they can deliver clean drinking water to their residents and safely treat wastewater.
Consider this example: The Colorado River provides Arizona with about 40 percent of its water. WIFA has funded $350 million worth of wastewater treatment projects along the Colorado River that stopped contaminants, such as nitrates and E. coli, from entering the river.
To date, WIFA’s smallest loan has been $2,900 and its largest $61 million. WIFA loan money is available through a revolving fund. The money stays within Arizona to help Arizona’s cities and towns, private water companies and tribal communities. Here’s how it works:
- WIFA was established in 1989 and received its first federal capitalization grant of $12.9 million in 1992 from the U.S. Environmental Protection Agency. WIFA immediately started providing loans for Arizona wastewater projects. In 1996, it was authorized to provide loans for drinking water projects.
- As the loans are paid back with interest, the money stays in Arizona and the amount of money WIFA has available to lend grows. It now can fund larger projects for new and repeat customers.
- Since that first EPA grant, WIFA has used $575 million in federal money and turned it into $2.2 billion in water projects for Arizona. WIFA calls itself the perfect public-private partnership, working with the federal, state and local governments to sell bonds on the private market to the benefit of everyone.
WIFA continues to receive about $25 million from the EPA each year to help subsidize the cost of loans. WIFA can offer a 5 percent to 30 percent discount on each loan’s interest rate. Smaller and poorer communities and projects that protect the environment get the bigger discounts and, therefore, the cheaper loans. In 2014, WIFA loans averaged a 2.17 percent interest rate for public systems.
Here are a few samples of projects WIFA loans have funded:
- City of Peoria: $14 million to help the city purchase the private New River Utility Company, improve the company’s existing infrastructure and integrate it into the city’s system. (Over the years, Peoria has used $160 million worth of WIFA loans to upgrade the city’s infrastructure.)
- City of Prescott: $46 million to more than triple the capacity of the city’s wastewater treatment plant to keep up with demand.
- Town of Payson: $25 million to help the town transport and treat river water and reduce its reliance on pumping groundwater.
- Yuma County: $1.4 million to connect 722 homes with failing septic systems to the city’s sewer system.
Congress recently made it easier for WIFA to fund a wider variety of water projects, such as green infrastructure projects, storm runoff infrastructure, or thinning overgrown forests around watersheds.
So the next time you hear someone complaining about Big Government remember WIFA, the little agency with the funny name that’s been helping to protect Arizona’s water for 25 years.
For 46 years, Arizona Municipal Water Users Association has worked to protect our member cities’ ability to provide assured, safe and sustainable water supplies to their communities. For more water information visit www.amwua.org.