The City of Port Townsend has increased its low-interest loan request to the Washington State Department of Ecology to $6.5 million. 

The city council initially authorized staff on Aug. 4 to apply for up to $4.5 million to fund the Lawrence Street Combined Sewer Separation Project. 

In the following weeks, Ecology officials working with the city recommended expanding the scope of the project to include enhanced water quality treatment, according to the city. They also suggested the city pursue loan funding for its Wastewater Treatment Plant Outfall Partial Replacement Project. 

On Sept. 2, city staff presented the council with a revised resolution that added $500,000 to the Lawrence Street request and a new $1.5 million request for the outfall project. 

The updated resolution, bringing the total loan ask to $6.5 million, was approved unanimously. Loan applications were due the next day, Sept. 3. 

The interest rate of the loans ranges from 1% to 2%, Public Works Director Steve King told the council on Sept. 2 He remains optimistic that a portion of the loans will be forgiven. Each loan requires a 20% match from the city. 

“It would not make sense to not take the loans,” King said. “You need to take the loans because you are beating inflation. It’s actually using your money wisely.”

Loan repayment will come from the sewer and stormwater enterprise funds, King said. 

City Manager John Mauro addressed the loan amount during the Sept. 2 meeting. 

“This is not a story that might be told very publicly, but it’s a meaningful one,” he said. “I mean, $6.5 million dollars gets your attention, it’s really money, and it could have been a lot more money for the same outcome, or maybe not even as good an outcome.”

He thanked city staff for their work behind the scenes.  

“I really appreciate underneath the story, what is required in team competency, the skill set and the toolset the team has to get us to this point is quite remarkable and not normal for cities of any size,” Mauro said.  

Both projects are scheduled for construction in 2027, according to the city. 

Partial replacement

The city’s outfall pipe, which carries treated discharge from the wastewater treatment plant offshore at North Beach, has experienced several leaks since the 2000s. For years, the city has worked to find one. Previously, the city planned a $4 million fix, requiring crews to trench in nearly 800 feet of new outfall pipe on the sea floor. 

Met with community concern over the project’s impacts on eel grass, the city pulled back to explore less-costly and less-intrusive alternatives. 

Recent testing revealed that replacing a 1940s-era concrete pipe would prevent further leakage and allow the outfall to continue functioning correctly at a fraction of the cost — without doing damage to the eelgrass. 

“We’re pretty excited about this,” King said. “Ecology has given us a green light in a conversation this last couple of weeks that they like this approach and they said, ‘Get the funding, get it done.’” 

The total project cost is now $1.5 million, down $2.5 million from the original estimate. 

Sewer separation 

The Lawrence Street project is a major infrastructure effort aimed at eliminating stormwater inflow into the sanitary sewer system and improving accessibility along Lawrence Street between Harrison and Monroe streets. 

The $500,000 in additional funding will allow the city to add stormwater bioretention treatment to clean the water before it enters the pipe system that drains into Port Townsend Bay, according to the city. 

The addition was suggested by Ecology regarding the competitiveness of the loan application, according to the city.

“It’s exciting to hear that the state was suggesting some changes to Lawrence Street, which tells me that maybe this is a good sign for what they are thinking in terms of funding this,” said Port Townsend Mayor David Faber. “I’m really excited about this. Getting our stormwater off the sewer up there is such a major need.” 

The total project cost is now $6.3 million, up from the original $5.8 million, with the city seeking $5 million in loans.