FRESNO (KMJ) — The state of California will be giving Fresno a loan of around $195 million to help pay for city's $429 million water infrastructure plan.
It means the people of Fresno will not be footing as big a bill to pay for the project. It'll save the ratepayers money – as well as securing the city's water infrastructure.
The $429 million plan was publicly criticized by City Councilman Steve Brandau.
"That really sparked a deeper conversation", admits the Mayor. "We were already working with the state and hoping get that loan amount up but I think Steve really provided the enthusiasm to sharpen the pencil and get that loan amount up".
"The results are terrific".
Councilman Brandau has confirmed today he will vote for the plan.
"I think it is time to move forward and so this project has my support", he announced Thursday morning.
Water rates are still set to go up – but not as much as initially expected. It's not a grant – but Mayor Ashley Swearengin says the solution is far cheaper than it would have been trying to borrow the money from elsewhere.
"We do have to pay this back over time but it's a lot cheaper than going out to Wall Street and paying 5.5% interest or more. This interest rate is about 1.6% – so that's a value to local rate payers".
Getting a loan from traditional sources would have meant higher interest rates – resulting in higher overall costs to pay for both the project and the added interest.
Mayor Swearengin explained the change this morning on KMJ Morning News. You can hear the full interivew here.
