Stillwater Taps into $112.9M Loan for Water Upgrades

The Stillwater City Council unanimously approved a $112.9 million loan from the Oklahoma Water Resources Board on Monday to fund critical water and wastewater infrastructure improvements across the city.

The 30-year financing represents a significant step in Stillwater's efforts to modernize its water systems, with annual debt payments estimated at approximately $7.2 million. The loan approval follows extensive planning that included a 2023 rate study and public engagement efforts designed to prepare for these essential infrastructure investments.

Increased rates for Stillwater customers went into effect July 1, 2025. Revenue generated by the rates and charges are set aside for the purpose of operating, maintaining and upgrading the water water delivery system according to a resolution adopted by the Stillwater Utilities Authority in November 2024.

"We can't just hope nothing bad happens," Mayor Will Joyce said in an Associated Press article referring to a canceled federal program. "This project is a necessity."

The loan will specifically fund the construction of a raw water line from Lake McMurtry, providing critical redundancy to the city's water supply system. Currently, an almost 50-year-old 36-mile water pipeline from the Kaw Lake reservoir serves approximately 120,000 people but remains vulnerable to damage from tornadoes and flooding, leaving the city with less than a day's worth of reserve drinking water if the main line fails.

City Manager Brady Moore noted that the loan helps address projects identified in the city's long-term improvement strategy. The financing comes through the Oklahoma Water Resources Board's Financial Assistance Program, which allows multiple communities to benefit from the state agency's triple-A bond rating.

Chris Gander with Bank of Oklahoma Financial Securities, explained that the FAP program differs from other state financing options by providing all funds upfront rather than through drawdown loans. "Just like your other bond issue, the funds are invested for you in an escrow account," Gander told the council.

The loan approval marks a shift in funding strategy after federal support was eliminated. The City of Stillwater spent two years working with the Federal Emergency Management Agency on a Building Resilient Infrastructure and Communities program application to help fund up to $50 million for the water system overhaul.

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BRIC was created under a 2018 law and signed by President Trump. However, the Trump administration canceled the BRIC program in April 2025, reclaiming up to $4.5 billion in unspent grants already approved to communities nationwide.

Without federal support, Joyce said Stillwater would have had to double water costs for residents to fund the project independently. The state loan provides a more manageable financing option aligned with the city's previously approved rate structure.

The water infrastructure improvements are part of a broader 10-year capital improvement plan totaling approximately $600 million, with water projects accounting for $500 million of that total. The comprehensive planning process included multiple town hall meetings and extensive public input before implementing a five-year rate plan in 2023.

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Finance Director Christy Cluck confirmed that the annual debt payments align with revenue projections from the approved rate increases. The city structured its rates in anticipation of these infrastructure investments, ensuring financial stability while addressing critical system needs.

The loan terms include prepayment provisions, allowing the city to refinance or pay off the debt early if favorable conditions arise. Gander noted that call dates have shortened over time, typically allowing prepayment after seven to eight years rather than the traditional 10-year restriction.

The Oklahoma Water Resources Board's FAP program enables communities to benefit from economies of scale by bundling multiple projects into larger bond issues. Stillwater's loan will be combined with projects from other Oklahoma communities.

The financing structure provides several advantages over traditional municipal bonds, including the state's superior credit rating and streamlined approval process. The Water Resources Board handles the bond issuance and marketing, reducing administrative burden on participating communities.

Council members focused their discussion on ensuring the city maintains financial flexibility while addressing essential infrastructure needs. The loan terms preserve the city's ability to pursue additional funding opportunities and maintain its strong fiscal position.

The approved financing specifically targets water and wastewater system improvements identified through the city's comprehensive infrastructure assessment. Engineering studies and condition evaluations guided the selection of priority projects, ensuring the most critical needs receive attention first.

The loan approval demonstrates Stillwater's commitment to proactive infrastructure management rather than reactive emergency repairs. By investing in system redundancy and modernization, the city aims to ensure reliable water service for current and future residents.

With the loan approval secured, city staff will proceed with final engineering designs and contractor selection for the Lake McMurtry raw water line project.

📺 Watch the $112M Loan Presentation to City Council