City Moves Forward with Water Treatment Plant Funding Despite Grant Program Changes
The City of Ashland is making steady progress on funding its much-needed Water Treatment Plant Project, even as it navigates shifts in federal grant programs. While recent changes to FEMA’s Building Resilient Infrastructure and Communities (BRIC) grant may have raised concerns, the project is fully funded through a long-term, low-cost federal loan. Additional grants are still being pursued to help reduce the financial burden on local ratepayers.
WIFIA Loan Secures Core Project Funding
The cornerstone of the project’s financing is a $73 million loan from the Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act (WIFIA) program. The current cost estimate for this project is $71.15M (high) to $55.68M (low). This loan supports Ashland’s Water System Resiliency Improvement Project, which carries a total estimated cost of $113 million* and will serve 21,000 people.
The new water treatment plant will be built in a safer location, replacing the aging and vulnerable facility currently situated in a flood- and fire-prone canyon. The project also includes installation of new transmission pipelines and treatment technology to address harmful algal blooms. The WIFIA loan offers flexible repayment terms designed to save the City approximately $11 million over its life, helping minimize the impact on water ratepayers.
*The $113M is the total estimated debt payment over the 35-year-$73M project loan.
Grant Program Update: BRIC to Flood Mitigation Assistance
Ashland had originally been pursuing a FEMA BRIC grant to help offset the treatment plant’s cost. However, in April 2025, FEMA cancelled all 2024 BRIC sub-applications and halted funding for previously awarded projects that had not yet begun construction or finalized grant agreements. This affected several Oregon communities, including Ashland, Medford and Grants Pass.
In coordination with the Oregon Office of Emergency Management (OEM) and the City’s grant consultant, West Yost, Ashland pivoted to FEMA’s Flood Mitigation Assistance (FMA) program. Unlike BRIC, the FMA program remains active and continues to fund eligible projects. The City was able to repurpose most of the BRIC application materials for the new FMA submission, which is now under review.
It’s important to emphasize that the cancellation of the BRIC program has no impact on the viability of the Water Treatment Plant Project. The WIFIA loan already provides full funding. The City continues to pursue grant funding to lessen the impact on ratepayers—not because the project is at risk.
Additional Funding Opportunities
The City is also working with the Oregon Infrastructure Finance Authority (IFA) on grant funding through the Bipartisan Infrastructure Law - Emerging Contaminants (BIL-EC) program. This could include up to $9.8 million in additional grant support. Grant funding through this program is anticipated in the 2026–2027 timeframe.
Water Cost of Service and Rate Review
Since the summer of 2024, Ashland’s Public Works Department has partnered with HDR Engineering to complete an updated Water Cost of Service Study. This study is critical in establishing water rates that are equitable and to manage long-term affordability.
The study follows national industry standards, specifically the American Water Works Association’s M1 Manual: Principles of Water Rates, Fees and Charges. Its primary goal is to ensure that each customer class—residential, commercial, institutional, etc.—pays a fair share based on actual service costs. No one customer group should subsidize another.
The cost of service study also ensures that the water fund can meet its operational, capital, policy and debt obligations. (Rates will be established utilizing the funding from the 9.8M BIL-EC Grant.) These factors are reevaluated every two years during the City’s biennial budget process. This comprehensive review helps protect the utility’s long-term financial health while providing transparency to the public.
Culvert Work and Construction Timeline
Construction work tied to the treatment plant project begins this summer with offsite piping installation along Glenview and Granite Streets. This includes replacement of the aging Ashland Creek culvert with a modern, fish-friendly structure capable of passing a 100-year flood event.
This phase will take approximately four to six months and will temporarily affect parking and increase truck traffic in the area. The City is taking steps to maintain safe trail access for residents during this period.
Conclusion
The City of Ashland is fully committed to delivering a modern, reliable and resilient water system. Despite federal grant program changes, funding for the new Water Treatment Plant is secured. Ongoing efforts to secure additional grants and implement fair rate structures reflect the City’s dedication to fiscal responsibility and environmental stewardship. We are Better Together!
Track the progress of the Water Treatment Plant project at ashlandoregon.gov/WaterPlant.
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