Water Infrastructure Finance Authority

The Water Infrastructure Finance Authority (WIFA) provides financial assistance, through below-market interest rate loans, for the construction, rehabilitation, and improvement of clean water and drinking water facilities in Arizona. Although WIFA meets state and federal requirements regarding below-market interest rates, its process for doing so can result in borrowers receiving different subsidy rates even though they received the same evaluation scores on their applications. WIFA’s process includes consideration of a project’s priority ranking compared to other, unrelated projects, which can affect the loan subsidy rate—and consequently, the borrower’s interest rate and the cost of repaying the loan. WIFA should revise its process so that interest rates are not dependent on unrelated projects. WIFA should test and evaluate the revised process prior to implementation to ensure it allows WIFA to continue operating without State General Fund appropriations.