City Finalizes WIFIA Loan for New Water Treatment Plant


The City of Oak Ridge closed on the $20.7 million Water Infrastructure Finance and Innovation Act (WIFIA) loan on Thursday, October 17, 2019. The funds provided by the federal loan program will be used to design and construct a new water treatment plant within the City of Oak Ridge, replacing an aging facility that has served the community since the 1940s.

The total cost for replacement of the water treatment plant is estimated to be $42.2 million. WIFIA will provide approximately 49% of that cost, with the City using the Tennessee State Revolving Fund (SRF) Loan Program to cover the balance of the project.

“After three years of application and planning, the City of Oak Ridge has reached a significant milestone in the funding needed for a new replacement water plant,” explained City Manager Mark Watson. “WIFIA has helped Oak Ridge with a low interest federal loan, allowing us to avoid potential failures in a system originally designed for a different Oak Ridge. The financial terms will allow Oak Ridge to afford these much-needed improvements to serve not only our residents, but the national security and U.S. Department of Energy facilities located here.”

“Through the WIFIA program, the City obtained an interest rate of 2.08% on the loan which matures in May of 2057,” City Finance Director Janice McGinnis said. “The estimated interest savings from the use of the WIFIA loan compared to comparable market rate financing options available to the City is $7 million on a gross saving basis.”

The project includes new raw water intake pumps and traveling screens, rehabilitation of the existing finished water tanks, a new finished water pump station, and water pipelines in addition to the new 16 million-gallon-per-day (MGD) ultrafiltration membrane treatment plant. These modern facilities will replace the existing 80-year-old conventional treatment plant, which is currently at capacity and beyond its useful life.

“Utility infrastructure upgrades are absolutely essential for Oak Ridge,” added City Mayor Warren Gooch. “Shortly after becoming Mayor, I recognized that our City needed a new water plant. The WIFIA loan was awarded as a result of the hard work of the City Manager and his staff, and it provides our community the most affordable option possible for long-term funding of a new plant. The quality of water for our citizens will improve even more, and the new technology will provide efficient, reliable, and long-term utility operations. This is a major step forward in addressing a critical need for the future of Oak Ridge.”

Deterioration is outpacing the City’s ability to repair the existing water treatment plant, located on a ridgetop inside the boundary of the Y-12 National Security Complex. Some equipment is no longer in production, meaning costly tools and pieces must be custom-made when replacement is required. Erosion and seismic activity have also taken a toll on the building and the hillside below.

After a thorough cost-benefit analysis, the Public Works Department recommended that a modern facility should be constructed. The new treatment plant will provide enough capacity to meet the City’s water needs by continuing the production and delivery of safe drinking water to customers.

Established in 2014, WIFIA is a program offered through the U.S. Environmental Protection Agency (EPA). The City of Oak Ridge applied for the loan and was the smallest city selected in the category for populations over 25,000. Other participants in the program include the City of San Diego and the City of Baltimore.