Salina, OK — OKLAHOMA CITY — A northeastern Oklahoma city whose water treatment plant is no longer compliant will receive a low-interest state loan to develop an alternate source of drinking water.

The Oklahoma Water Resources Board approved a $3.21 million loan Tuesday for the Salina Public Works Authority. The announcement was issued by J.D. Strong, executive director of the state agency.

Darrell Blaylock, Chairman and PJ Pape, Secretary appeared before the Water Board Tuesday in support of the loan application.

Joe Freeman, chief of the Water Board’s Financial Assistance Division, calculated that Salina residents will save an estimated $963,000 in interest costs by borrowing from the Drinking Water State Revolving Fund, compared to traditional financing.

In addition, the Oklahoma Department of Environmental Quality determined that the Mayes County community qualifies for “forgiveness” of 40 percent of the loan principal: $1,284,000. The net result is that the city will have to repay only $1,926,000 of the loan. The DWSRF program is administered jointly by the OWRB and the DEQ.

The lion’s share of the loan proceeds will be devoted to construction of 9.3 miles of 10-inch diameter waterline from Salina westward to the Oklahoma Ordnance Works Authority near Pryor, at MidAmerica Industrial Park. The Oklahoma Department of Transportation has given the city permission to attach its waterline to the S.H. 20 bridge that spans Lake Hudson.

OOWA is a water wholesaler; it pays the GRDA for raw water it pumps from the Grand River, disinfects it, then sells the treated water to several communities. The MidAmerica treatment plant has a design capacity of 50 million gallons of water per day, with a peaking capacity rated at 62 mgd.

A small portion of Salina’s loan will be used to improve the Pinecrest standpipe, one of the town’s four water storage tanks. Civil engineer Stephen Tolar of consultants Holloway, Updike and Bellen said nozzles will be installed in the tank to circulate the chlorinated water and thus prevent the creation of harmful by-products.

The work is expected to start around the first of October and will take about a year to complete, Tolar said. Salina will retire its water treatment plant and start receiving all of its water from OOWA at that time, he said.

Salina has 786 water customers, ledgers reflect; water service connections increased by 6 percent between 2003 and 2011, municipal records show. Average water consumption in Salina is projected to be 264,000 gallons per day by 2015, rising to an estimated 312,000 gallons per day by 2035, Tolar said.

The cost of enlarging and renovating Salina’s treatment plant to comply with DEQ regulations, and the cost of hooking onto OOWA, were “very similar,” Tolar said. The deciding factors, he said, were the ability to share costs via OOWA and the inability to predict what new, more stringent environmental standards will be imposed in the years ahead. Salina’s water treatment plant was state-of-the-art for small facilities at the time it was constructed, officials noted.

Salina’s 30-year loan will be secured with a lien on the revenues generated by the municipal water and sanitation services, the proceeds of a half-cent city sales tax, and a mortgage on the town’s water system and other property, Freeman said.

Since 1983, the Oklahoma Water Resources Board has extended more than $2.6 billion in loans and grants to improve and enhance the water and wastewater infrastructure needs of communities throughout Oklahoma.

“We thank state Sen. Kim David and state Reps. Doug Cox and Ben Sherrer for their support of our financial assistance programs,” Strong said.