DALLAS — Oklahoma faces financial obstacles in meeting its water needs over the next 50 years, according to a draft action plan developed by the Oklahoma Water Resources Board.

Drinking water infrastructure will need project financing amounting to $37.9 billion over that period to meet demand, the report said, with another $43 billion for clean water infrastructure projects.

With an estimated 2.98% annual inflation rate, the total funding needed through 2060 rises to a projected $87 billion for drinking water and $79.3 billion for clean water efforts. “Oklahoma faces severe challenges related to financing water and wastewater infrastructure improvements,” the plan said.

Clean water is needed for additional economic development, and safe drinking water cannot be ensured without a robust wastewater effort, according to the draft   plan. The need to maintain or replace aging infrastructure adds to the urgency. 

The current plan, the state’s third, was developed by First Southwest Bank. Oklahoma’s first water plan was developed in 1980 and the second was adopted in 1995. The current draft plan, which has been five years in the making, will be considered by board trustees Oct. 17.

Recommendations will be provided to the Legislature before the 2012 session.

The state water board operates successful bond-financed revolving loan programs for local water and wastewater systems. The board’s revolving fund revenue bonds are rated triple-A by all three major rating agencies.

Almost all the drinking water needs and all the wastewater needs would qualify under the current programs, but the separate loan programs would need significant additional funding to provide the needed loans.

The study said 96% of the cost of drinking water projects and 100% of cost for the wastewater projects would be eligible for assistance. However, the drinking water fund as currently structured and financed would be able to provide only $2.4 billion over the 50-year period.

The plan’s authors said the water board should put together a team of financial experts and water infrastructure specialists to investigate a more robust state water funding program to meet the financial needs through 2060.

“Any potential program should include a specific mechanism to address the significant financing requirement of small communities in the state, as well as encourage regionalization of water-wastewater systems,” the report recommends.

Smaller systems — those serving 3,300 customers or fewer — account for 46% of the projected drinking water costs and 24% of the wastewater spending, but have fewer financial resources and older systems, the water board said.

The plan recommends a study to determine if Oklahoma could finance some of the needed infrastructure with revenues generated by selling surplus water to Texas and other neighboring states.

The Oklahoma Water Resources Board has issued four tranches of debt for the clean water and wastewater loan programs and has never experienced a default by a local utility. Outstanding debt of $509 million is secured by repayments from $742 million of loans. The latest sale in March provided $85 million of proceeds for the clean water revolving fund and $57.9 million for the drinking water loan fund.

Borrowers typically are charged 70% of the prevailing triple-A market rate plus 55 basis points on drinking water fund loans, and 60% of the market rate plus 55 points on clean water fund loans.

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