Work on Morro Bay wastewater plant could begin soon, after city gets key low-interest loan
Funding for the city of Morro Bay’s new wastewater reclamation facility passed a major milestone Wednesday when the federal government announced it is awarding a low-interest loan to pay for almost half of the long-awaited and controversial project.
As a result, the city says it now has all of its funding for the project lined up, and it could break ground off South Bay Boulevard as soon as this spring.
The city said in a news release Wednesday that it secured up to $62 million in funding from the Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act program.
Alone, the loan could provide low-interest funding for as much as 49% of the total $126 million project cost, which the city says could ultimately save ratepayers up to $29 million over the life of the project.
“Securing this low-interest federal funding is a sound financial decision for the city,” Mayor John Headding said in the news release. “Signing the agreements now means that we will lock in near-historic low interest rates and ensure maximum benefit for our ratepayers.”
The city has been working with EPA staff since 2017 to secure the loan.
City administrators say the loan, in combination with state funding, will allow the city to meet state and federal regulations to relocate the wastewater treatment plant, and will allow for “the viability of an advanced water purification facility to contribute a safe and reliable water source.”
The project’s funding has been championed by Central Coast Congressman Salud Carbajal.
“The importance of a sustainable water source in Morro Bay cannot be overstated — with these funds, we will be able to modernize our wastewater treatment, better prepare for the impacts of flooding, become more resilient and improve the lives of Central Coast residents,” Carbajal said in a news release.
Approximately 55% of the total EPA funding will be allocated toward the water system portion of the project and 45% of the loan will go to the wastewater portion.
The news release from Carbajal’s office says that to date, the EPA has issued 17 such loans totaling more than $3.7 billion in credit assistance to help finance more than $8.4 billion in water infrastructure projects, as well as create more than 16,000 jobs.
The WRF Program was also placed on the Clean Water State Revolving Fund fundable list for the Fiscal Year 2019-20.
The news release says that the state funding — a combination of grants and low-interest loans — combined with the EPA loan and the city’s existing cash on hand will fully fund the wastewater reclamation facility.
The city of Morro Bay says the project will create a drought buffer and will be capable of providing up to 80 percent of the city’s future water needs.
The project includes construction of a new 1 million-gallon-per-day advanced treatment facility, two new lift stations, an approximately 3.5-mile pipeline alignment, and wells to inject purified water into the groundwater aquifer.
That purified water can be extracted for reuse through the city’s existing infrastructure.
Construction is scheduled to begin as early as spring 2020 with the project complete by 2023.
