Astoria Sewer Improvements Move Ahead with $3.6 Million IFA Financing Package

City: Astoria, OR

In April 2012, the IFA approved a $3.56 million loan from the Water/Wastewater Fund to the city of Astoria's 11th Street Combined Sewer Overflow Separation Project. The project also received a $500,000 grant from the Water/Wastewater Financing Program.

The city of Astoria sought financing to complete the mandated 11th Street Combined Sewer Overflow Separation project. This project will separate the sanitary sewer flow from stormwater inflow and infiltration in the downtown area. The IFA Board approved the loan of $3,562,500 at a reduced interest rate of 1.94% under the IFA's new flexible interest rate approach.

Astoria's collection system conveys combined sewage to diversion structures that divert dry weather flow to an interceptor system that carries water to a series of lift and pump stations and delivers the flow to a wastewater treatment plant. During wet weather, when flows are in excess of the capacity, the untreated flows are diverted to the Columbia River, Youngs River or Youngs Bay through a series of combined sewer overflow outfalls.

In November 2010, the city and DEQ executed an Amended Stipulation and Final Order that reduces the current volume of combined sewer overflows by approximately 96% and establishes a more cost effective level of control. To date, the city has completed phases 1 and 2 of its facility plan, spent approximately $17 million and achieved an overall control level of 80-85 percent of the total combined sewer overflow volume. To remain in compliance with the Amended Stipulation and Final Order, the city must complete the 11th Street Combined Sewer Overflow Separation Project and control the discharge from six outfalls into the Columbia River by December 1, 2013.

The new tiered-interest rate method establishes a maximum rate each quarter, which is the average of the previous quarter's weekly rates. But IFA also will consider the prior month's average weekly rate, and will use the lower of the two.

"We are hopeful that this new approach will help cushion the impact of sharp swings in interest rates. Each month will give municipalities the benefit of lower rates should market rates decline," IFA Director Lynn Schoessler told the IFA Board prior to the loan approval, the first of its kind under the new approach. "Conversely, borrowers will be protected from suddenly higher rates in a rising market."

Schoessler noted that under the previous method of setting rates, current basic loans would have an annual rate of 4.05%. Under the new method, the basic loan rate was reduced to 3.76%.