The city of Santa Cruz has secured a $127.7 million loan for the upgrade of its water infrastructure.

Santa Cruz Water Department applied for the federal loan in 2022 under the WIFIA programme. The beneficial loan includes interest-only payments for the first five years, a 35-year term and an interest rate of 3.9%. The loan will cover roughly half of the total funding needed for all the improvements in the Water Department’s pipeline. Additional funding will have to be acquired from conventional market rate debt, grants and through the Drinking Water State Revolving Loan Fund, also facilitated through the EPA.

Funding will be used towards the $158 million improvement of the Graham Hill Water Treatment plant facility; the $41 million Newell Creek Pipeline replacement and realignment; a $6 replacement of the 400,000 gallon university tank No. 4; and a $95 million expansion of aquifer storage and recovery.