Marana is about to get a loan of up to $5.25 million from the Water Infrastructure Finance Authority of Arizona to complete a number of water system improvements, among them the formal purchase of seven wells from the Cortaro Marana Irrigation District.

When the funds are secured, Marana can complete a water line connection from Hartman to Cortaro, install a line across the Santa Cruz River, I-10 and the Union Pacific Railroad tracks at the Twin Peaks interchange now under construction, pay for enhancements of the Silverbell water system and purchase wells from CMID.

The projects and acquisitions are "extremely important," utilities director Dorothy O'Brien said, providing "a huge opportunity for residential as well as commercial development." The loan and its repayment plan are "a distinct part of the rate plan we brought forward" in late 2009 and early 2010, she told the town council. "This is a great way for us to utilize that program as well as minimize the impacts on rates."

The 20-year loan, constituting the water utility's "first formal debt instrument," would carry an interest rate not to exceed 5 percent, according to town Finance Director Erik Montague. "The actual rate will depend on what the market rates are at the time of close, which will be this Friday," Montague said Tuesday. "We anticipate the rate, including the subsidy, will be near 3 percent."

The obligation would be repaid through a pledge of utility revenues, Montague said. "There is no general fund backstop or pledge of any sort or any kind," he noted.

At Hartman and Cortaro, 1,350 feet of new, 8-inch water line would be extended north of Cortaro Ranch to connect two Marana water systems. Estimated cost is $300,000. It should enhance fire protection, and protect water service in the Cortaro area during power outages. "This is the missing piece to connect the two systems," an objective contained in the water utility's 2004 master plan.

About 4,000 feet of new, 24-inch water line would be constructed through the Twin Peaks interchange to Linda Vista, at an estimated cost of $1.6 million. Another 7,100 feet of new, 16-inch water line would be built from Linda Vista to Bluebonnet along the Camino de Mañana corridor toward Tangerine Road, at an estimated cost of $1.109 million.

Road construction at Twin Peaks and Camino de Manana presents "the optimal time to do it" at "a much lower cost," O'Brien said. The lines would provide water service "to a large area, now undeveloped," with both residential and commercial possibilities.

With the loan, Marana would acquire wells from the CMID, a deal both parties agreed to when they dissolved an intergovernmental agreement last year. "We're paying for the seven wells," O'Brien said, at a cost of more than $1.5 million.

In the Silverbell / Cortaro area, the town would spend $350,000 to replace an existing 100,000-gallon reservoir on Picture Rocks Road with a 250,000-gallon reservoir. "We're looking at other ways to optimize the system," O'Brien said.

"What if we had not gotten this loan?" asked Councilwoman Roxanne Ziegler.

"The projects would, at a minimum, be delayed," Montague said.

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