West Richland residents are paying more to build a well and a reservoir because the city lost a state Public Works Trust Fund loan.
The city was set to receive a $6 million low-interest loan for the project last year before the state Legislature decided to use the money to pay for education instead.
There aren't attractive substitutes to pay for the projects cities and other local governments can pay for using the trust fund loans, officials say.
Roscoe Slade, West Richland's public works director, said the city has been able to do the project thanks to a federal loan, but that comes at a higher interest rate. The cost of the project is about 20 to 30 percent higher because of the added permitting and documentation required whenever local governments use federal money.
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Federally funded loans for wastewater and drinking water projects may no longer be available because of the federal government's deficit, said Stan Finkelstein, chairman of the state Public Works Board.
The state Public Works Trust Fund allows cities and local governments to maintain their drinking water and wastewater systems without getting to the point of falling apart, said Carl Schroeder, an Association of Washington Cities government relations advocate.
The trust fund also allows cities to better prepare for population growth, Schroeder said.
While grants from the state Transportation Improvement Board can cover transportation projects, a city must have enough money to pay for 40 percent of the project or it isn't competitive, said Cary Roe, Kennewick's public works director. Trust fund loans don't require a match.
Richland has been able to get trust fund loans at a 0.5 percent to 1 percent interest rate, instead of the 4 percent to 6 percent interest rate available in the municipal bond market at the time, said Pete Rogalsky, Richland's public works director. That means city utility customers see large cost savings.
Pasco officials would prefer to use trust fund loans to pay for a 30-inch sewer trunk line planned for Court Street to Burns Road and to Broadmoor Boulevard, and a new water supply intake facility at Court Street near the Interstate 182 bridge, said Ahmad Qayoumi, Pasco's public works director.
The city will sell bonds to pay for the projects if the trust fund money is not available, he said.