Freeland sewer boosters appear to be in line for a $3.5 million low-interest loan from the state Department of Ecology, officials said Thursday.

“There are no guarantees, but because we’re ranked so high, there’s a 99-percent chance,” said Sandy Duncan, office administrator of the Freeland Water and Sewer District, which applied for the loan.

She said the loan is contingent on residents of the district forming a local improvement district (LID) to fund the estimated $40 million sewer project. She said a public meeting on a proposed LID is scheduled for May 24.

Duncan said the Ecology loan would fund additional design work on the sewer system. The loan term would be 20 years at 2.6-percent interest.

She said the Freeland project ranks fifth on a list of 50 water-quality projects being considered by Ecology this year. Duncan said the loan isn’t certain until it’s approved by the state Legislature sometime this spring.

Each year, Ecology helps fund water-quality projects. Duncan said the water and sewer district would not take on the loan if an LID isn’t formed. An LID would set up an assessment schedule for property owners hooking up to the sewer system.

The Freeland sewer project already has received $5 million in grants from Ecology and the county’s rural-development fund for land acquisition, which includes 80 acres of the former Trillium Woods property for an outfall, and property for a sewage treatment plant.

Duncan said that shifting from septic systems to sewers is seen as a necessary step toward addressing persistent water-pollution problems in Holmes Harbor. It also is an integral part of Freeland planning, and a prerequisite for incorporation, she said.

The water and sewer district is continuing to seek out other sources of state and federal funds, although chances of receiving them appear unlikely this year.

“We’re asking for as much as we can get,” Duncan said, adding again, however, that the district won’t take on additional debt unless an LID is formed.