Town Snags $10.6m Grant For Blue Ridge

Payson’s shuttle diplomacy pays off with federal stimulus grant on pipe to deliver long-term water supply

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Payson has scored a major coup by winning a federal stimulus grant that will pay for about one-third of the cost of the Blue Ridge Reservoir pipeline.

The town will get $10.6 million in federal grants and loans to complete repair work on the 15 miles of existing pipeline on top of the Rim, underwrite preliminary studies and engineering for the rest of the line and buy 75,000 feet of 18-inch pipe. Some sections of the existing pipe are 45 years old.

The project ended up snagging about one-fifth of the drinking water infrastructure grants handed out for the whole state. Payson Mayor Kenny Evans spent several weeks making two or three trips per week to Phoenix, hand-carrying proposals, revisions and rewrites to the staffers in the governor’s office who were drawing up the state’s priority list for the federal funds.

Half of the money will come as an outright grant, with the other half in the form of a long-term, 1-percent loan. The grant indicated that half of that loan will probably be “forgiven.”

The grant will likely accelerate the construction of the pipeline, originally planned for completion in about 2016, but now likely by 2013. The town has about $5 million saved up from water impact fees, and had planned to pay the balance with fees on future construction and low-cost federal loans.

The rankings announced last Friday represented preliminary approval. The state will hold public hearings on the funded proposals on April 13 and make final awards on April 15.

The town pulled off some deft grant writing juggling, by breaking down a $30- to $40-million project into an opening phase that could be funded immediately. It could take at least another year or two for the town to creep through the Forest Service’s review process to get permission to actually start construction. The pipeline will run from Washington Park to the out skirts of Payson along Houston Mesa Road.

Evans said the town staff pulled together the grant proposal in record time and tailored it to the particular requirements of the stimulus package.

Evans hand-carried drafts of the grant proposal to the governor’s office for several rounds of reaction and review before submitting the final proposal, which came in as the No. 10 priority among some 192 projects statewide. Only the top 44 ranked projects were funded.

The Blue Ridge pipeline will deliver to Payson 3,000 acre feet annually from a reservoir atop the Mogollon Rim, more than doubling the town’s assured water supply.

The town struck a deal with Salt River Project to secure the rights to that water — a water right worth about $114 million annually on the open market.

The project will generate an estimated 100 jobs, many of them the jobs of steelworkers who will make the pipes.

The town’s grant application cited assorted environmental benefits. For instance, a power station at the base of the Rim driven by the drop of water down the pipeline will generate an estimated $250,000 in electricity.

By contrast, it would cost $600,000 to pump that much water out of a 700-foot-deep well.

The pipeline will carry a total of about 3,500-acre-feet of water per year, which includes 500-acre-feet available to other Rim Country communities.

Payson is already experimenting with a small filtration system that would perhaps be installed at several points along the pipeline to also supply water to several of the communities along the East Verde River.

The 3,000-acre-feet of water will eventually make Payson one of the few rural communities in Arizona with a permanent water supply sufficient to accommodate all planned growth.

The combination of the Blue Ridge water and the 1,800- to 2,500-acre-feet the town can pump annually from its wells could supply a population of 38,000, with a cushion for drought years.

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