The City of Morro Bay is getting a $62 million loan from the Environmental Protection Agency to replace its aging wastewater treatment plant.
The new facility will be located near the intersection of South Bay Blvd. and Highway 1.
In 2019, concern over potential impacts to the threatened California red-legged frog delayed the project. However, Morro Bay city officials say that issue has been addressed and all environmental reviews completed.
Construction is now expected to begin as soon as mid-March or early April.
Officials say the new treatment plant and water recycling facility is designed to help supplement the city's water supply and improve groundwater quality. Being located farther inland from the current plant will also reduce discharges into the ocean.
The project is expected to cost a total of $126 million. In addition to the EPA loan, the California State Water Resources Control Board is providing $64 million from its Clean Water State Revolving Loan Fund.
City officials say they were able to secure the EPA loan at a 0.83% interest rate, which will save the city up to $900,000 per year in debt repayments.
Construction of the project and operation of the new wastewater treatment plant are expected to create 403 jobs.
It's expected to be complete by a February 2023 deadline set by the Central Coast Regional Water Board.