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Molalla’s new wastewater treatment plant remains on schedule; city outlines layered funding plan
Summary
City staff reported the new wastewater treatment plant is on time and on budget, funded through a mix of Clean Water State Revolving Fund financing, an expected USDA permanent loan payoff and a $5 million state lottery grant; completion is scheduled for November 2027.
City staff told the Molalla Budget Committee the new wastewater treatment plant project is proceeding on time and on budget and described a layered financing plan that combines interim and permanent state programs with federal and state grants.
Community Development Director Matt Cortell said the city obtained interim financing through the Clean Water State Revolving Fund (CWSRF) and expects USDA permanent financing to replace interim loans when the project is complete. “That is the standard when you’re getting USDA funding ... you have to have interim financing,” Cortell said. He also said the city was awarded $5,000,000 in grant funding from the Oregon Lottery, and that $500,000 of SRF funding will convert to grant forgiveness upon project completion.
Cortell summarized the schedule: the project’s completion is programmed for November 2027, with the sequence batch reactor (SBR) components expected to be operational about eight months earlier. He described the plant’s modular design as allowing incremental expansion if growth requires it in future decades.
Funding mix detailed in the presentation included CWSRF interim loans (DEQ-administered), anticipated USDA financing and state lottery grant dollars; staff noted an earlier congressional allocation of $1,250,000 was not finalized after federal changes but the city continues to pursue additional federal support. Cortell also said DEQ could provide permanent funding if USDA financing were disrupted, though terms would be less favorable.
Staff highlighted programmatic requirements attached to federal/state financing, such as a short-lived assets line required by USDA and capital requirements expected under the new National Pollutant Discharge Elimination System permit once Molalla is categorized as a major facility. The committee heard that the new plant will produce substantially cleaner effluent and transition older lagoons to clean-water storage.
Next steps: staff will continue project management and financing coordination; the committee’s recommendation to forward the budget to council includes the project funding as presented. Council-level appropriation and final financing documents will be required prior to final drawdown of permanent loans.
