Keep Funds Flowing: WIFIA helps San Francisco prep infrastructure for the future

As communities across the United States face aging water infrastructure amid ever-tightening budgets, programs like the Water Infrastructure Finance and Innovation Act (WIFIA) become vital tools for ensuring resilient and sustainable water and wastewater systems. By offering low-cost, flexible financing, WIFIA empowers utilities like the San Francisco Public Utilities Commission (SFPUC) to modernize essential systems, safeguard public health, and prepare for seismic challenges.

The SFPUC was one of the earliest and largest beneficiaries of the WIFIA program in 2018, when it received a $699 million loan. It has since acquired two more loans to tackle critical infrastructure projects to help ensure San Francisco is prepared for the future.

For the SFPUC, which provides water to 2.7 million Bay Area residents and treats 40 billion gallons of wastewater annually, the WIFIA program has been especially useful for its flexibility, adaptability, and investment optimization, said Alexandra Gunnell, loans and grants director at SFPUC.

The first loan funded a new biosolids facility at San Francisco’s largest wastewater plant that upgrades Class B biosolids to Class A, enabling broader, more sustainable reuse applications like soil enrichment for farming. “Not to mention, other benefits to the community, such as reducing noise and odor, and providing streetscape improvements,” Gunnell said.

“In the city of San Francisco — 49 square miles — you can imagine that anywhere you have a treatment plant, you have a very constrained footprint, and our neighbors are businesses and homes — literally, right across the street. A lot of these upgrades are necessary in order to be a good neighbor and ensure long-term, safe operational reliability,” she added.

When interest rates dropped in 2020, the SFPUC was able to reduce its interest rate from 3.09% to 1.45%, projected to result in even greater savings over the life of the loan. This flexibility is a hallmark of WIFIA, offering utilities the opportunity to recalibrate financing as market conditions shift.

Also in 2020, the SFPUC received its second loan for a new headworks facility, built to withstand a 7.8 earthquake on the San Andreas fault. This allocation included an additional benefit: Since costs had increased on the first project, which was still in progress, WIFIA allowed the SFPUC to borrow 49% of the cost increase for the biosolids facility, too.

“A benefit [of WIFIA] is that they understand large and long projects often times do increase in cost beyond the initial estimate or even the initial bid,” Gunnell said.

Overall, WIFIA’s low interest rates and flexible repayment schedules support their commitment to ratepayer affordability, and the SFPUC has water systems that are safe, reliable, and accommodate their growing population.