The City of Denton Public Utilities Board on Feb. 10 voted unanimously to authorize payment of a $100,000 application fee to pursue a Water Infrastructure Finance and Innovation Act (WIFIA) loan that could provide up to 49% of financing for the city’s five‑year water and wastewater capital improvement program.

Stephen Gay, general manager for water utilities and street operations, told the board the city is seeking a WIFIA master agreement with the U.S. Environmental Protection Agency that would let Denton draw down funds as needed rather than sell all debt immediately. "This morning we're gonna discuss our application for the US Environmental Protection Agency's WIFIA program," Gay said.

Jessica Williams, the city’s chief financial officer, said the application fee covers processing and that WIFIA can finance up to 49% of total eligible costs. "The 51% that the city is responsible for may be covered from multiple sources," Williams said, noting the city already secured $195,000,000 from the Texas Water Development Board that EPA counts toward the local match. Williams also said the city completed a retail rate study and has a wholesale rate study pending to evaluate long‑term affordability.

City staff described the loan as a line of credit rather than an immediate draw. Gay said the total WIFIA request—$770,970,583.07—reflects the 49% portion the city would borrow, and the program includes about a 20% contingency per EPA guidance. "We don't have to take all the money," Gay said. "We're only going to draw down what we need." Williams added that the WIFIA rate follows the Treasury rate and that borrowing under the federal program could yield savings because the federal government's triple‑A credit is lower than the city's double‑A market rate.

Officials said the funds would support major projects including capacity upgrades at the Ray Roberts treatment facility, work at the Pecan Creek and Clear Creek Water Reclamation Facilities, and distribution and collection system improvements. Gay said many projects are already in design and that project spending is expected within the five‑year window. City staff said Ray Roberts expansion work is under way and projects range from design to construction.

On timing, staff said Denton submitted a letter of interest on April 15, 2024, received an invitation to apply May 10, and must submit a full application by May 10, 2025. The presentation projected an approval for the first loan in the third quarter of 2025 and a second loan application in the second quarter of 2025. Williams said the city has been working directly with EPA staff and other advisors to assemble loan documents and compliance tracking.

Board members asked about disbursement mechanics, repayment timing and how the local 51% match will be met. Williams said disbursements would be processed on a reimbursement basis and that the city will set aside local funds—impact fees, revenue bonds and other grants as available—to meet the match at the end of the program. Gay said the city will continue to pursue impact fee adjustments and other local funding tools to reduce ratepayer burden.

A motion to authorize the application and pay the $100,000 fee passed unanimously. The board did not approve any loan closing or debt issuance at the meeting; the vote only authorized the application fee and submission process.

Votes at the meeting were recorded verbally as unanimous for this item; the motion was made and seconded during the Feb. 10 meeting.