Thinking about regionalization for your rural water system? This video explains what regionalization means, why it matters, and why it takes time to do it right.
After 30 years of planning, setbacks, and persistence, a regional water project in northeastern Oklahoma is finally moving from idea to construction.
In December 2025, leaders with the Tenkiller Utilities Authority (TUA), federal and tribal partners, engineers, and local water systems gathered in Tahlequah to close on the financing that will make the long-awaited project possible. The moment marked a turning point — one that could shape the future of rural water service in Cherokee County and beyond.
At its core, the project is about regionalization — a concept that often sounds technical but is rooted in something simple: neighbors working together to provide water to their communities.
Sometimes that cooperation looks small, like sharing an operator or equipment. Other times it means buying supplies together or purchasing water from a neighboring system. And in some cases, like at Tenkiller, it means building a new regional system so several small water districts can share one reliable source.
For Hamid Vahdatipour, chairman of the Tenkiller Utilities Authority, that idea first took shape decades ago when leaders with Lake Region Electric Development began asking a basic question: What does this community need most?
“Water became the main need for the area,” Vahdatipour said.
Those early conversations eventually led to the creation of the Tenkiller Utilities Authority, envisioned as a way to provide safe, affordable drinking water to multiple rural systems by building one shared treatment facility and transmission network.
The idea was sound.
The path forward was anything but easy.
A Long Road to Funding
USDA staff were first approached in the mid-1990s with the idea of establishing a regional water supply in Cherokee County. The Community Infrastructure Team at Communities Unlimited (CU) joined the discussions in the early 2000s, providing support as the project’s needs aligned with the organization’s expertise.
But regional water projects rarely move quickly.
Land must be secured. Permits approved. Engineers and attorneys brought in. Environmental reviews completed. Grants and loans lined up. And between the first engineering estimate and the moment a project is finally ready to bid, costs often rise — sometimes dramatically.
Even under the best conditions, projects can take years.
Tenkiller took three decades.
“It just was one obstacle after the other,” Vahdatipour said.
By the time financing finally came together, the scope of the effort matched the scale of the challenge.
In total, the project now carries a price tag of more than $52 million. USDA Rural Development provided the backbone of the financing through more than $27 million in loans and $22 million in grant funding. To close the final gap, the Cherokee Nation and Indian Health Service (IHS) contributed more than $2 million in grant support.
Together, that funding package covers far more than just pipes in the ground. It includes construction and engineering, legal services, interim financing, inspections, land and right-of-way acquisition, water storage rights coordinated with the U.S. Army Corps of Engineers, environmental and cultural resource reports, Cherokee Nation administrative costs, contingency funds — and even six months of operations and maintenance expenses and interest deferral to help stabilize the system in its earliest days.
It was the kind of comprehensive financing structure only possible after years of coordination across federal, tribal, and local partners.
Over time, more than 30 systems initially interested in the project had to step away as costs rose and timelines stretched. By the time the financing finally closed, four systems remained committed: Stick Ross Water Company, Peggs Water Company, Rural Water District No. 16, and Rural Water District No. 7 — all in Cherokee County.
Together, they represent roughly 7,000 customers who will benefit from a new regional supply drawn from Lake Tenkiller.
The Role of CU
An instrumental part of the early groundwork was laid by former CU staff member Phil Ross, who helped establish TUA. After Ross retired, former Oklahoma State Coordinator Gaylene Riley — now Special Projects Area Director — and Julie Hudgins, Central Regional Area Director, took on the effort around 2018, stepping into a project that had already weathered decades of challenges.
By then, the scope had narrowed significantly — but the need for coordination, financing, and technical assistance had only grown.
One of the biggest hurdles for any start-up water authority is determining wholesale water costs and securing enough funding to make construction possible. For Tenkiller, that meant navigating one of the most complex financing paths rural infrastructure can face.
CU staff helped calculate weighted median household income across multiple census tracts — a critical step that allowed the project to qualify for USDA’s poverty interest rate and maximum grant funding. That single calculation opened the door to millions of dollars that otherwise would not have been available.
From there, CU facilitated monthly coordination meetings among the project’s “Letter of Conditions” working group — including USDA loan specialists, engineers, bond attorneys, local counsel, and system leadership — keeping the effort moving through the federal approval process.
“One of the things that people don’t see is definitely keeping everybody on track, moving forward to the goal,” Hudgins said. “There are so many moving parts to it… and one of the biggest things people don’t realize is how long the environmental review takes.”
That review alone required extensive coordination with the U.S. Army Corps of Engineers and tribal nations, including mitigation measures tied to culturally significant times of year. Each time easements shifted, maps had to be updated. Each update meant another round of review.
At one critical point, the project faced a different kind of problem: it had no money of its own.
“There were times we needed to pay for easements or purchase land, and that funding just wasn’t available,” Vahdatipour said. “That’s where Communities Unlimited came in.”
CU’s Lending Team provided an $85,000 loan, supported by the Revolving Loan Fund (RLF) through the U.S. Economic Development Administration (EDA), to cover those urgent needs — a bridge that allowed the project to keep moving until permanent USDA financing was secured in December.
From Buyers to Decision-Makers
Engineering for the project is being led by EDM Consultants, which has worked on the effort since the early 2000s. For engineer Mark Koch, the significance of the project goes beyond pipes and treatment plants.
“The biggest upgrade, in my mind, is the systems will have control of their price of water,” Koch said. “Instead of being buyers at the mercy of whoever they’re purchasing from, they’ll be decision-makers. They’ll see what it costs to produce water — and they’ll have control of their destiny.”
The new system will include a 1.8-million-gallon-per-day water treatment plant located just east of Lake Tenkiller in the Lakewood area, along with roughly 60 miles of transmission lines serving communities from Welling to Peggs and beyond.
Construction is expected to begin in 2026, with completion projected within a few years.
And expansion is already on the horizon.
“We know four systems will be buying water from us at the start,” Vahdatipour said. “But we already have others showing interest. We’ll probably be expanding the system as soon as we get into operation. It means a lot to be able to provide this system — and it’s a big need for the state of Oklahoma.”
A Model for the Future
For Hudgins, one of the most important lessons of the Tenkiller project is redefining what regionalization really means.
“Regionalization can sound like a negative,” she said. “But it’s just collaboration. And for the systems that stuck with it, I think they’re going to be well-pleased.”
Koch offers similar advice to other communities considering the same path.
“Be serious about what you’re trying to get done,” he said. “It takes a while. There are permits and a lot of minds that have to come together. But once you decide to stick to it — like this group has — you can get there. They went over a lot of hurdles. They could’ve dropped it. But they didn’t.”
Added Vahdatipour, “I hope that we have a path set up that others can follow — hopefully not as long as it took us. Sometimes, when you’re blazing a trail, it takes longer than if you’re following someone else’s. So hopefully they can see what we did or ask us for help. We’d be happy to tell them what to do and what not to do — and how to move forward.”
For Vahdatipour, the milestone still feels surreal.
“To me, it represents some 30 years of work to get to this point,” he said. “And now we have the funding to start the program. That’s kind of like a dream come true.”
