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Molalla reports wastewater plant at roughly 50% complete; USDA exception saves roughly $177,000
Summary
City staff told the Molalla City Council the new wastewater treatment plant is about 15 months into construction and roughly 50% complete; an exception from USDA rural development avoided holding more than $2 million in contractor retainage and saved the city about $177,000, with overall project savings approaching $3 million.
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City staff told the Molalla City Council on March 25 that construction of the new wastewater treatment plant is about 15 months along and roughly 50% complete, with multiple structures and underground utilities substantially in place and major equipment installations underway.
Assistant City Manager Mac Corthell, presenting for Mr. Kelly, said the sequencing batch reactor and aerobic digester walls are complete, catwalk construction is about half framed, and the equalization base and walls are approximately 75% complete. He said about 90% of underground utilities (water, sewer, storm and electrical conduit) are installed and the control building exterior and interior finishes have progressed.
Corthell provided a schedule: the sequencing batch reactor is expected to be operational in spring 2027, allowing flow to be routed through the new process; Lagoon Number 2 can then be taken offline in summer 2027, drained, cleaned and converted to clean effluent storage, and the city can move toward full commissioning. Remaining biosolids removal from Lagoon 1 is expected in 2028.
The presentation included a notable financial development: Corthell said he requested and received an exception from USDA rural development that avoided holding over $2 million in contractor retainage until 2028, which the city estimated will save about $177,000 in interest costs. "They granted that exception to us," Corthell said, calling the change "a very, very positive development," and he estimated total project savings approaching $3 million due to prior change-order strategies.
Corthell also said staff has pursued an earmark through Representative Byam's office to fund an awning over the headworks area to help reduce discharge temperatures and improve working conditions; if approved, that earmark would prevent the awning cost from being borne by local ratepayers.
What happens next: staff will continue construction oversight, implement the biosolids removal plan through 2028 and return to council with budget or schedule updates as needed.

