HomeMy WebLinkAbout2026-008 Clean Water State Revolving Fund November 7,2025 Report No. 2025-008
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
The Texas Water Development Board(TWDB)has invited the City of Denton to apply for funding under
the State Fiscal Year(SFY) 2026 Clean Water State Revolving Fund(CWSRF) Intended Use Plan(IUP)
for the Pecan Creek Water Reclamation Project(PCWRP).
BACKGROUND:
The CWSRF is authorized by the Clean Water Act. It is intended to provide low-cost financial assistance
for planning,acquisition,design, and construction of wastewater,reuse, and stormwater infrastructure.
Cities are among the eligible applicants and the PCWRP is eligible for CWSRF funding.
This invitation follows the City's submission of a Project Information Form(PIF),which the TWDB
reviewed and ranked sufficiently high for inclusion in the Invited Projects List for SFY 2026. The City's
project(PIF#16700)is listed with an eligible cost of approximately$326 million. The expansion will
increase the plant's treatment capacity from 21 million gallons per day(MGD)to 30 MGD, and the
facility to include Membrane Bioreactor(MBR) and Biological Nutrient Removal(BNR)technologies
providing higher effluent quality,improved nutrient removal, and long-term environmental and regulatory
compliance The project also positions the City to support future growth, enhance system resiliency, and
advance long-term sustainability goals through improved effluent quality and potential water reuse
opportunities.
From a financial standpoint,the City is taking a blended funding approach that combines the EPA Water
Infrastructure Finance and Innovation Act(WIFIA) loan, covering up to 49% of eligible project costs,
with CWSRF loan funding for a portion of the remaining balance. Under this CWSRF invitation,the City
is eligible to receive up to$60 million in loan funding for SFY 2026. The remaining amount for the
eligible project cost has not yet been committed; it will require reapplication in future funding cycles
(e.g., SFY 2027 and beyond), subject to the TWDB's evaluation,ranking, and funding availability.
Participation in the CWSRF program also aligns the project with federal and state investment priorities,
strengthening the City's financial position and supporting continued eligibility for future SRF and WIFIA
opportunities. This combined funding strategy allows Denton to advance one of its largest and most
critical utility projects while maintaining fiscal responsibility and leveraging outside capital to reduce the
City's overall debt burden.
DISCUSSION:
Next Steps&Required Actions
•Intent to Apply Deadline:November 3,2025
•Application Deadline: December 4,2025
November 7,2025 Report No. 2025-008
The Intent to Apply form does not require Council approval and will be submitted administratively by
staff to maintain the City's eligibility.
City staff will prepare the necessary application and supporting documentation for Council consideration
at the November 18,2025, Council meeting. A Council Resolution will be required to authorize
submission of the formal TWDB application and acceptance of the loan terms once finalized.
ATTACHMENTS:
1. Denton#16700_Invitation to Apply
2. CWSRF Information Sheet
STAFF CONTACT:
Kyle Pedigo
Water Planning and Engineering Division Manager
Kyle.Pedigo@cityofdenton.com
(940) 349-7194
REQUESTOR: Staff Initiated
STAFF TIME TO COMPLETE REPORT: 2 hours
PARTICIPATING DEPARTMENTS: Water Utilities, Finance