Discussion and possible action on any and all matters regarding Resolution No. 2415.  A resolution of the Mayor and City Council of the City of San Luis, Arizona, approving the form and authorizing the execution and delivery of a Loan Agreement with the Water Infrastructure Finance Authority of Arizona from its Clean Water Revolving Fund Program; (2) delegating the determination of certain matters relating thereto to the manager and the finance director of the city; (3) providing for the transfer of certain moneys and making certain covenants and agreements with respect thereto; (4) authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by such loan agreement and this resolution; and (5) declaring an emergency.  (Roula Encinas, Director of Finance and Mark Reader, Managing Director of Stifel, Nicolaus & Company)

(6 votes in favor are required to pass immediately as an emergency per A.R.S. § 19-142.)

In October 2024, the City Council approved Resolution No. 2335 authorizing staff to apply for financial assistance through the Water Infrastructure Finance Authority of Arizona (WIFA) under the Clean Water State Revolving Fund Program for the expansion of the West Wastewater Treatment Plant.

On November 12, 2025, the City Council approved Resolution No. 2383 authorizing the City to enter into a WIFA loan agreement in an amount not to exceed $26,240,000 to finance the project. The loan included approximately $1.5 million in forgivable principal (grant funds) and provided below-market financing through the Clean Water State Revolving Fund Program.

Following the competitive bidding process, the lowest responsive and responsible construction bid totaled approximately $41 million, exceeding the original construction budget by approximately $15 million due to increased construction costs and market conditions.

To address the funding gap, the City Council subsequently approved Resolution No. 2398 authorizing staff to apply for additional financial assistance through WIFA. WIFA has approved the City's application for a supplemental Clean Water State Revolving Fund loan in an amount not to exceed $12.5 million, with the remaining project costs to be funded from the Wastewater Utility Reserve. The loan will be secured by the City's Excise Taxes; however, the debt will be repaid solely from wastewater utility rates and charges, consistent with the City's financial plan.

The City Council is asked to consider the attached Resolution, which authorizes the City to enter into the supplemental WIFA Loan Agreement and approves the loan terms and conditions contained in the attached Loan Agreement.

This supplemental financing will allow the City to complete the West Wastewater Treatment Plant Expansion, increasing the plant's treatment capacity from 1.5 million gallons per day (MGD) to 3.0 MGD while upgrading the treatment process from a Sequential Batch Reactor (SBR) system to a Membrane Bioreactor (MBR) system. These improvements will enhance reclaimed water quality, increase opportunities for water reuse, ensure continued regulatory compliance, improve long-term operational reliability, and provide the infrastructure necessary to support the City's continued growth.

Approval of this Resolution will authorize the execution of the supplemental WIFA Loan Agreement, providing the remaining financing necessary to complete this critical wastewater infrastructure project.