Despite the stagnate economy and tight-fisted budgets at all levels of government, proponents of a sewer system for Freeland continue to troll for funds while updating their proposal.

The Freeland Water and Sewer District has applied for a low-interest loan from the state Department of Ecology for design work on a new system, consulting engineer Gary Hess said Monday.

Hess, of the Freeland office of Davido Consulting Group, which is doing most of the preliminary engineering for the project, said the district hopes to get as much as $3 million from the state.

He said the district should hear by February if the loan will be approved.

Earlier this year, the sewer district applied for a $10 million grant from the U.S. Department of Agriculture, but lost out in competition with other projects throughout the nation.

USDA officials, however, said the Freeland project is a good one, and urged local backers to pursue it and reapply next year, when more money will be available.

Despite loss of the grant, Hess said the district hopes to move ahead early next year with the formation of a local improvement district (LID) to fund a sewer system, estimated to cost about $33.8 million.

Meanwhile, planning will continue and more public meetings will be held on the project, which would be completed in stages, he said.

An LID is a method by which property owners share in the cost of infrastructure improvements.

In July, sewer proponents said that with a $10 million grant from USDA, Freeland homeowners could expect to pay between $12,900 and $18,400 to hook up to a new sewer system. That’s on top of an estimated $10,500 that homeowners may face to remove an existing septic tank.

Without the USDA grant or other assistance, the cost to residents would obviously increase. Hess said none of the cost estimates to build the system have changed since summer.

Backers for years have pushed for a sewer system in the South End’s major commercial area to help clean up Holmes Harbor and as a prerequisite for incorporation.

County planners expect the population of the Freeland area to grow to about 4,000 by the year 2020, with the bulk of new residents being retirees from the Seattle area.

Substantial commercial growth also is expected in Freeland as the population of the entire South End grows.

On Monday, meanwhile, Island County commissioners approved a revised version of the sewer plan at their meeting in Coupeville.

Hess said the revision was routine, and takes into consideration updated planning information.

“Periodic updates are the normal course of events,” he said.

Included in the update was a discussion of 80 acres of former Trillium Woods property north of Freeland which the sewer district purchased after its developer went bankrupt.

The remaining 664 acres of the forest land was later bought with money raised by the Whidbey Camano Land Trust, which intends to preserve the property.

Hess said it hasn’t been determined yet if the 80 acres will be sufficient to disperse treated water from the sewer system once the system is fully built. One estimate heard at the commissioners’ meeting was that another 120 acres might be needed.

Hess said engineers should know by next spring exactly how much property will be required to disperse recycled water as the population of the district increases over time — or even if the water instead should be routed back for non-potable use in Freeland.

Hess said the district is studying several options for recycling the water, ranging from a sprinkler system similar to that used by the Holmes Harbor Sewer District at nearby Holmes Harbor Golf Course, to a drip system.

“We’re not looking for an outfall,” he said. “We’re going to reuse the water.”

He said the sewer district has kept the land trust apprised of its planning and has been working closely with the nonprofit.

“We just don’t know if we’re going to need more property or when,” Hess said. “But we don’t plan to purchase more property.”

“The study will go on through the winter, to get an idea how the site behaves in the wet season,” Hess continued, adding: “It’s a benefit to the aquifer to reclaim water. That’s one of the goals of the project.”

The water and sewer district currently encompasses about 1,050 acres, and serves 442 commercial and residential customers in the Freeland area.

The district already has moved ahead with property acquisition to accommodate a future sewerage treatment plant, purchasing 10 acres off Bush Point Road between Highway 525 and Mutiny Bay Road, for $275,000.