District Receives $88.9 Million Low-Interest Loan

For Immediate Release

October 5, 2020

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Melanie Mow Schumacher, Special Projects-Communications Manager
Phone: 831-475-8501, ext. 153
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Soquel Creek Water District Receives $88.9 Million Low-Interest Loan from U.S. EPA for Pure Water Soquel Construction

EPA Loan, State Loan, & State Prop 1 Grant Assure Significant Funding for Pure Water Soquel

Soquel, CA (October 5, 2020) - The Soquel Creek Water District (District) is pleased to announce that its low-interest loan from the U.S. Environmental Protection Agency (EPA) has been officially approved, to be used toward construction of the Pure Water Soquel Groundwater Replenishment and Seawater Intrusion Prevention Project. The loan, up to a maximum of $88.9 million at an interest rate of 1.34%, is part of the EPA's Water Infrastructure Finance and Innovation Act (Wi-FiA) funding program.

This funding is in addition to a State Water Resources Board $50 million Prop 1 grant that was executed in July, another low-interest (1.3%) loan from the State Water Board's Seawater Intrusion Control (SWIC) Program, and earlier $2.25 million in state and federal grants for State grant for the design phase of the project. These are significant financial investments, demonstrating a strong belief and support in Pure Water Soquel from state and federal agencies. This support greatly benefits the District's customers, the local community, and our environment.

The Wi-FiA loan represents over $66 million in interest savings compared to typical financing that is available to the District. For the Wi-FiA loan, the District can draw any amount up to the maximum loan amount, and will draw only the funds necessary for project completion. Interest and principal repayment are based only on the funds used, and there is no penalty for not utilizing the entire loan amount. This widespread support and funding will have a positive impact for District customers, as future rate increases won't need to be as high as they would have been under more traditional financing.

"This is another great milestone for Pure Water Soquel, and brings us one step closer to providing this drought-proof, clean water supply to the community," said Dr. Bruce Daniels, President of the District's Board of Directors. "We are doing everything we can to bring this project in at the estimated cost, but it's sensible - and really, our obligation - to make sure we're prepared for the upper end of the estimates. This loan gives us the buffer we need, to ensure we can replenish and protect our groundwater basin."

Pure Water Soquel is a groundwater replenishment and seawater intrusion prevention project designed to prevent further seawater contamination of the Santa Cruz Mid-County Groundwater Basin. This basin is one of 21 (out of over 500 basins) in the state of California that has been identified as critically overdrafted, with a mandate that it be brought back into sustainability by 2040. The project will take treated wastewater and put it through a state-of-the-science multi-step advanced purification process (producing water that is cleaner than bottled water) before pumping it into the groundwater basin to raise the water there to protective levels. This provides a new, drought-proof water supply, and will prevent further spread of seawater contamination of the drinking water supply.

"Coastal aquifers are at significant risk in our region and in several other parts of the state, and once they're contaminated with seawater - it is nearly impossible to ever recover them," said Melanie Mow Schumacher, District's Pure Water Soquel Program Director. "This project not only safeguards the local water supply, it also contributes to the prevention of seawater intrusion along the entire mid-county coastline."

The EPA's official press release was issued on October 5, 2020 on Pure Water Soquel, which includes what others are saying about the benefits of the loan, and the PWS Project:

  • John Busterud, EPA Pacific Southwest Regional Administrator: "Monterey Bay plays a vital role in the region's marine health and biodiversity. EPA's financial support to the Soquel Creek Water District will help protect the Bay while replenishing local groundwater and ensuring that the community is more resilient against drought."
  • David Ross, EPA Assistant Administrator for Water: "With 40 states anticipating some freshwater shortages within their borders in the next 10 years, projects like Pure Water Soquel Creek are taking the challenge of meeting 21st century water demands head on. Through Wi-FiA, EPA is able to support innovative water infrastructure to help diversify water supplies and protect groundwater while saving ratepayers money."
  • Jimmy Panetta, U.S. Representative (CA-20): "I want to congratulate the Soquel Creek Water District for this significant milestone in the history of the Pure Water Soquel project. Seawater intrusion into critical groundwater supplies is of great concern throughout my coastal district, and with this low-interest loan, the District can begin the next phase project, helping ensure the long-term protection of our local water supply."
  • Mark Stone, CA State Assemblymember: "This very low-interest loan from Wi-FiA is a real landmark in Soquel Creek Water District's efforts to address our critical water supply issues. We are so fortunate here in Santa Cruz County to benefit from this extraordinary level of support and funding from the U.S. EPA, as well as from our own State Water Board, which is making the difference in assuring long-term sustainability of the community's drinking water supply."
  • Zach Friend: Santa Cruz County Board of Supervisor: "Maintaining a clean, reliable supply of drinking water is clearly one of the most vital issues here and throughout California. With the help of this generous Wi-FiA loan from the U.S. EPA, the Soquel Creek Water District is poised to take a giant leap forward toward local water supply sustainability, by creating a new source of pure water, replenishing the groundwater, and preventing further seawater contamination."

About the EPA Wi-FiA Program

The Water Infrastructure Finance and Innovation Act of 2014 established the Wi-FiA program, a federal loan program administered by the U.S. EPA for eligible water and wastewater infrastructure projects. Learn more about:

About Soquel Creek Water District

The Soquel Creek Water District is a local government agency that provides water resource management within its service area to deliver a safe and reliable supply of high-quality water to meet present and future needs in an environmentally sensitive and economically responsible way. View the District's website.