WATSONVILLE >> For nearly a year, the Pajaro Valley Water Management Agency has been preoccupied with the construction of a new water supply system at College Lake to rebalance water levels in the Pajaro Valley Groundwater Basin.

Recently, the agency announced it has secured two Water Infrastructure Finance and Innovation Act loans through the U.S. Environmental Protection Agency which will push the construction of the Watsonville Slough System closer to fruition.

The two loans will provide PV Water with $74 million at an average rate of 4.465% over 35 years, according to a news release. Officials say it would save the agency $24 million over the life of the loans and eliminate the need for issuing public bonds.

“PV Water’s success in acquiring grant funding has saved the Pajaro Valley millions of dollars,” said PV Water General Manager Brian Lockwood in a statement. “PV Water has acquired over $80 million in grant funding that does not need to be repaid. The grant funding, complemented by loans with favorable terms, has helped to keep rates as low as possible while constructing critical water supply facilities.”

Amy Newell, chair of the PV Water Board of Directors, was also thrilled with the loans.

“The closing of these two WIFIA loans provides PV Water with the funding necessary to complete the College Lake Project and partially fund the Watsonville Slough System Project, two important water supply projects that will help PV Water achieve sustainable groundwater resources,” she said in a statement.

The College Lake Project, located on a former apple orchard along Holohan Road, aims to connect a pipeline to deliver treated water from the Watsonville Wastewater Treatment Plant to more than 5,500 acres of farmland through Pajaro Valley Water’s Coastal Distribution System in an effort to reduce groundwater extraction. The project will serve the area along the Monterey Bay from La Selva Beach to Moss Landing and will allow treated water to travel from College Lake to more than 5,500 acres of farmland throughout the region.

The three main components of the project are a pump station near College Lake with an adjustable flap and step pool to allow fish and other marine life to pass through unharmed, a water treatment plant with a decanting structure, pump station and solids handling lagoons to allow for dirt and algae to be removed and a pipeline from 76 Holohan Road to Highway 1 to connect to the existing Coastal Water Distribution System.

The project also received a $7.6 million grant through the California Department of Water Resources Sustainable Groundwater Management Act in 2022 and an allocation of $2.3 million through the California Department of Conservation Multibenefit Land Repurposing Grant in 2023. Ground was broken on the project last June.

Progress on construction of the project can be viewed at Pvwater.org/construction.