City Manager Greg Ferrese said the city is looking for a low-interest loan from the council. The council has indicated it favors land-based application – council Chairman Joe Corrado said at a Jan. 27 meeting that he had received more than 800 emails against the Rehoboth outfall – but the city figures to be the No. 1 priority project for funding because it faces a December 2014 deadline to cease dumping treated effluent into the Lewes-Rehoboth Canal.

Ferrese said the city is also looking for a low-interest loan from the U.S. Department of Agriculture.

Another possibility, Ferrese said, is grant money from the state or federal government, but the city has not yet contacted lawmakers regarding possible grant funding.

One major source of funding could come from the state’s clean water revolving fund. The money in the fund comes from the federal Environmental Protection Agency and is administered by the Clean Water Advisory Council.

Terry Deputy of the Department of Natural Resources and Environmental Control’s (DNREC’s) Division of Water Resources’ loans and grants section said the state matches 20 percent of what it receives from the feds. He said in October, the state should get around $10 million. The next step for the city, Deputy said, would be to fill out a loan application, which the council will expect in March or April.

A funding package will then be prepared. What the city gets is based on available money, project cost and the project’s place on the state’s project priority list, Deputy said.

Rehoboth Mayor Sam Cooper said the city should be getting notice of its ranking before it fills out the loan application.

Once the project is completed, municipalities traditionally pay the money back with two payments a year over a period of 20 years, although cities can develop their own payment schedules, Deputy said. The interest is below market value, he said, around 3.7 percent to 3.9 percent, he said.

Permitting process starting to roll

Cooper said while all this is going on, the city is also moving forward on permits. He said Rip Copithorn, of the city’s engineers Stearns and Wheler, was putting together a series of tasks related to permitting and design of the outfall. The city commissioners would authorize these tasks as they became relevant, Cooper said.

“We wouldn’t be approving the whole thing up front. It would be those things that needed to be happening now,” he said.

Copithorn said the city has just begun to delve into the permitting issues, including meeting with the DNREC’s Joint Permit Process Committee and preliminary modeling.

No official permit applications have been filed at this time, Copithorn said.

The permit Copithorn called “the big one,” is a Section 404 permit, which regulates dredging and discharge into the ocean, with the U.S. Army Corps of Engineers. The corps must issue an individual permit for the ocean outfall, Copithorn said. The city will eventually need about 12 permits from various state and federal agencies to go forward with the project, he said.

The permitting process figures to take, at most, two years, Copithorn said.

“What will happen is, as we file the permit application and provide information, that information is circulated among the different federal and state agencies, and they come back with questions in writing, which have to be responded to,” he said. “Any one of those questions could require some additional field work or additional data of some sort, to support any conclusions.”

Copithorn said at the end of the process, the corps would schedule a public hearing for any additional questions before deciding whether to grant the permit.

While the permitting process is the city’s focus, once the permits are in hand, engineers would then go to work on the design.

Copithorn said the city would also work with the University of Delaware’s College of Marine and Earth Studies on environmental impact studies.

The proposed route of the project has been to run a pipe from Rehoboth’s wastewater treatment plant underground to a site off Deauville Beach. Copithorn said the city would conduct a route alignment study, probably before the permitting is finished, to explore any alternatives that would then be presented at a public hearing or workshop.

Finally, Copithorn said the city is still on its timeline to have the project ready by December 2014.

“But we absolutely need to be in the permit phase now,” he said.