PRESCOTT - A $15.9 million loan through the Water Infrastructure Financing Authority of Arizona (WIFA) will help the City of Prescott pay for several new water storage tanks.
On Tuesday, the Prescott City Council authorized the issuance of WIFA debt to finance three water tanks: one south of Highway 89A and east of the Granite Dells Parkway interchange; another off of Copper Basin Drive, one-half mile from Sheriff's Posse Trail; and another off Skyline Drive in the Thumb Butte area.
As a part of the loan, WIFA approved about $2 million of "forgivable principal," which city officials say is effectively a grant that the city will not have to repay.
Budget and Finance Director Mark Woodfill said the grant money goes to WIFA from the U.S. Environmental Protection Agency.
A city memo ex-plained that the federal grant money is intended to help communities with "fix it first" projects focusing on repair, replacement and upgrade of existing infrastructure.
Over the past three years, the city has received about $8.1 million in "forgivable principal," Woodfill said.
The council approved the loan authorization with an emergency clause, which made it effective immediately. Woodfill said the emergency clause was necessary to allow for the loan to close by Jan. 25.
The city expects the final interest rate to be in the 3-to-3.5-percent range. The 20-year loan will be repaid with revenue from water user rates and water system development impact fees, according to the memo.