Our city is considering building a sewage treatment system. Currently the city relies on on-site sewage (septics). County health regulations on OSSF mandate one+ acre lots. This has led to a large-lot development scheme out here that really keeps out moderately-priced housing and hampers commercial development. Our median family income is around $67000 and house values are around $160000. The City lies over the Edwards Aquifer recharge zone, an extremely sensitive environmental feature that is the primary source for San Antonio's drinking water. We will probably have to design the system for gray-water irrigation rather than discharge into a creek or river due to environmental issues in our two nearest discharge possibilities.
The city does not have a huge budget to work with. This type of expense would go in a CIP, but we're still looking at some major expense with bond payments. Do any of you have any suggestions for creative financing, grants, matching funds, low-interest loans, etc that might help defer some of this cost? I've tried to include a bunch of information above that might have bearing on grant qualifications. Thanks for any advice you might have.