The Kennewick Irrigation District is looking to use $10 million from the Washington Department of Ecology to provide a new water supply to the Red Mountain American Viticultural Area.
The board voted Tuesday to enter into an agreement with the agency to help build a new pumping station on the Yakima River at Kiona and install more than 77,000 feet of distribution lines, pumping stations and facilities to deliver water to 1,785 acres on Red Mountain.
Chuck Freeman, KID secretary-manager, said the money will come to KID at one-half of 1 percent interest from the Ecology department's Columbia River Basin Water Supply Development Account.
KID will repay the grant to a special capital development account over 20 years. But terms of the agreement allow KID to have access to $5 million of that special account.
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Essentially, KID will be paying itself back half of the original grant amount with money that can be used for future infrastructure improvement projects, Freeman explained.
Construction isn't planned to begin until next February, and the project is expected to take at least four years to complete.
KID plans to spend $2 million of its own money on the project, and any cost overruns will fall on the irrigation district.
Freeman noted that KID has been working with ecology officials for several years on the grant.
Board members voted unanimously to go ahead with the financial agreement.
KID created a Red Mountain Local Improvement District last fall, setting the interest rate for LID members at no greater than 6 percent. Board member Patrick McGuire asked Tuesday if the one-half percent interest rate for the grant would stand or if KID would be required to remit an amount more in line with the LID interest rate.
That issue will be resolved before the agreement is signed, Freeman said.