The Idaho Department of Environmental Quality has awarded close to $9 million in combined drinking water funding to two small Idaho communities — Worley in Kootenai County and Malad City in Oneida County — to address aging infrastructure and expand water system capacity.

The Awards

Worley received the larger of the two packages, totaling $4.9 million. That figure includes a $2.8 million low-interest construction loan at 2% interest, repayable over 30 years, along with $2.1 million in legislative supplemental funding. DEQ announced the Worley award Thursday.

Malad City’s award, announced Wednesday, totals $3.9 million — a $2.8 million low-interest loan at 2.75% interest over 20 years, paired with $1.1 million in supplemental legislative dollars.

What the Money Will Fund

Worley’s funding is designated for constructing a new groundwater well, upgrading existing well facilities, repairing a water storage tank, replacing service meters, and securing water rights. The package addresses both immediate infrastructure deficiencies and longer-term capacity needs for the small Kootenai County community.

Malad City’s allocation will go toward fixing leaking water lines, upgrading and repairing wells, looping water mains to improve system reliability, and acquiring water rights. The work targets systemic vulnerabilities in the Oneida County seat’s distribution network.

Cost Savings from Favorable Loan Terms

DEQ emphasized the financial benefit these below-market loans represent compared to conventional municipal financing. Worley is projected to save an estimated $6 million compared to the cost of carrying average municipal general obligation debt. Malad City is expected to realize roughly $2.7 million in savings from the favorable loan terms.

The combination of low-interest loans and supplemental legislative appropriations reflects a financing model Idaho has used to stretch infrastructure dollars further for rural communities that often lack the tax base to independently fund major capital projects.

Broader Infrastructure Context

The awards come as Idaho grapples with significant infrastructure funding pressures across multiple sectors. The Idaho Transportation Department faces a $2.7 billion unfunded project backlog following budget reductions, underscoring the challenge the state faces in maintaining and upgrading public systems across a geographically dispersed population.

DEQ’s drinking water loan program targets communities whose infrastructure deficiencies pose risks to public health. Both Worley and Malad City had identified water system needs that qualified for the state assistance, though neither community’s specific compliance history was detailed in the announcements.

For rural Idaho towns with limited bonding capacity, state-backed low-interest financing programs can be the difference between deferred maintenance that compounds over decades and timely repairs that keep systems functional and safe for residents.