Cedar Rapids wastewater plant to install aerobic granular sludge and biogas facilities; Marion to review new combined treatment/capacity agreement

Dave Wallace, engineering manager for Cedar Rapids Utilities, briefed Marion council on the status of major upgrades at the Cedar Rapids Water Pollution Control (WPC) facility and on a proposed new combined treatment/capacity agreement that would change how Marion is billed.

Wallace said WPC — operational since 1980 and serving Cedar Rapids, Marion and nearby jurisdictions — treats significant ‘‘high‑strength’’ waste without a separate pretreatment requirement, so population equivalent loads can be many times actual population. The facility’s Contract 2, a multiyear construction program, will replace and upgrade large portions of the plant, including four aerobic granular sludge (AGS) basins, two digesters and a biogas facility intended to produce sellable biogas and renewable energy credits. The project bid last summer with a low bid about $348 million; Wallace said bids were substantially higher than budgeted and Cedar Rapids has pursued about $30 million in value engineering reductions (the original target had been $35 million).

Wallace said SRF (state revolving fund) loans will fund most of the project because of favorable interest rates and flexible loan timing; the team has engaged EPA Region 7 because of the project scale. He said the biogas tax credits could provide an additional $50–$60 million when the project is completed and that a consultant has been hired to advise on claiming those credits.

Other work this year includes a new ash lagoon, concrete pours for AGS basins and digesters, and new belt filter presses for solids handling. Wallace described later capacity improvements — lift station and primary clarifiers — now budgeted for about $130 million and scheduled around FY2034, but he said those may be deferred if ongoing infiltration and inflow reduction efforts continue to reduce peak flows. He noted average daily flow has fallen from about 50 MGD to about 40 MGD over roughly a decade and peak flows have fallen from routine 130 MGD peaks to a recent high of about 80 MGD.

On treatment and capacity billing, Wallace said the current method allocates costs on a proportional residential flow basis and separately charges for capacity. Cedar Rapids is proposing a combined agreement that would bill Marion using a “group 3” large‑user structure (flow, BOD and TSS), plus a surcharge factor that addresses risk and bond‑rating impacts to Cedar Rapids. Wallace said Marion’s average daily flow (about 3.5 MGD) qualifies it within the flow range for that group and that the proposed large‑user method simplifies billing and provides more predictable annual costs, though monthly variability may rise. He provided an example comparing a June charge: under the current method Marion’s charge would have been $318,522; under the proposed method it would be about $344,000 — an increase of roughly 8% for that month, but with the capacity charge rolled into the new rate structure.

Wallace said Cedar Rapids and Marion are working closely to finalize agreement language, flow‑meter best practices and mutual access to meter data to reconcile differences in readings. The draft will be reviewed by each jurisdiction’s attorneys and financial modeling is under way; the goal is final approvals by December and an effective date of July 1, 2026, after the current capacity charge expires. Wallace and Marion staff said they continue to seek grants and other funding to help offset costs.

Councilmembers asked about why Marion would be classified in a large‑user group (Wallace said it is driven primarily by flow volumes), the stability of project funding and the contract risk allocation. Wallace said SRF funding is in place and that most cost risk sits with the contractor under the current contract, and that project funding is considered stable though change orders and atypical ‘‘acts of God’’ can affect cost.

No formal council action was recorded during the update; Wallace asked if there were questions and said he would return with final agreement language.