IEUA drops $89.2 million debt issuance in favor of cash funding for regional wastewater projects

IEUA drops $89.2 million debt issuance in favor of cash funding for regional wastewater projectsFollowing feedback from a recent cost of service rate study, the Southern California utility will utilize existing connection fees rather than issuing new debt to fund its wastewater operations and maintenance capital projects.

IEUA's proposed FY 2026/27 mid-year budget amendment eliminates $89.2 million in planned new debt.

The utility will execute a four-time capital call using Capital Capacity Reimbursement Account (CCRA) proceeds collected from new connections.

The shift is part of a broader capital strategy that includes a newly proposed $1.53 billion Ten-Year Capital Improvement Plan for FY 2026/27 through 2035/36.

The Inland Empire Utilities Agency (IEUA) in Chino, California, is pivoting its capital funding strategy for the upcoming fiscal year, moving away from a planned debt issuance to rely on existing cash reserves held by its contracting agencies. During the March 18, 2026, board meeting, Budget Officer Paula Hooven presented the proposed mid-year budget amendment for the Fiscal Year 2026/27 Regional Wastewater Program. The amendment features a $68.7 million overall decrease in sources of funds, driven primarily by the elimination of $89.2 million in proposed new debt. The debt will be replaced by utilizing proceeds from the Capital Capacity Reimbursement Account (CCRA). Hooven noted that feedback received during the 2025 cost of service rate study suggested using CCRA proceeds to fund projects in the Regional Wastewater Operations and Maintenance fund instead of issuing new debt. Board President Steven J. Elie confirmed that the agency will execute a four-time capital call—two calls in the current fiscal year and two in the next—to draw the $89.2 million from funds held by contracting and ordinance agencies. These funds are generated from connection fees paid by new developments. "That reduces the burden on the taxpayers within the rate," Elie noted, adding that eliminating the debt service will ultimately reduce ratepayer impacts. The budget amendment also offsets the eliminated debt with a projected $20.5 million increase in Water Infrastructure Finance and Innovation Act (WIFIA) and State Revolving Fund (SRF) loan receipts, aligning with updated capital project timelines. On the expenditure side, the uses of funds decreased by $10.5 million, largely due to lower projected capital project expenditures resulting from scope, schedule, and design changes. The budget adjustments align with IEUA's newly proposed Ten-Year Capital Improvement Plan (TYCIP) for FY 2026/27 through 2035/36, which was also presented at the meeting. Manager of Asset Management Travis Sprague outlined the $1.53 billion plan, which includes 145 projects. The total figure represents a decrease from the $1.7 billion plan adopted the previous year, partially due to the strategic deferral of the Regional Water Recycling Plant No. 1 (RP-1) liquid capacity recovery project outside the ten-year window. The budget amendment and the TYCIP will be presented to the Regional Technical and Policy Committees in March and April before returning to the IEUA board for final adoption in June 2026.