The Oregon Legislature’s short session wrapped up last week with a significant win for Philomath — $2.65 million in funding to extend the city’s sewer infrastructure to the north end of town. It’s a project that the city manager and mayor said will unlock housing development capacity that has been stalled for years.
The capital grant, sponsored by Sen. Dick Anderson (R-Lincoln City), will fund a sewer main line to serve an area that the city sees as future residential neighborhoods. The project was first identified in the city’s 2018 Waste Water Master Plan Update.
“I really want to emphasize that the money that we get from grants to fund these kinds of infrastructure projects has a direct affordability impact on residents,” Mayor Christopher McMorran said. “Because if this project isn’t funded by a grant, it means it’s either going to be funded through rate payers, by increasing sewer rates, or it’ll be funded through SDCs, which are at the end of the day paid for by more expensive home prices. So getting funding from the state directly decreases the cost of buying a home or the cost on your utility bill.”
The need for the project comes down to a straightforward but critical limitation — the sewer pump station at the city’s public works yard is at capacity, meaning new residential or commercial construction on the north side of Philomath has been effectively halted.
“Right now, our sewer capacity on the north side of town is basically full,” McMorran said. “So if anyone wants to build a new house or build a new business up there, they can’t, or they can do very little of that. So it’s a challenge for us because most of our developable land in our urban growth boundary is on the northern side but people haven’t actually been able to take advantage of that because they haven’t been able to connect to the sewer.”
City Manager Chris Workman explained how the constraint became apparent through a specific development proposal. Levi Beelart purchased property in the area, had it annexed into the city and came forward with a subdivision plan — only to discover the pump station was already maxed out.
The scale of the project — estimated at $2.9 million — also made it impractical for any single private developer to absorb. Workman noted that Beelart’s property could support 25 to 35 homes, which wouldn’t come close to justifying a $3 million infrastructure investment on its own.
Another landowner, Loretta Johnson, has expressed interest in annexing her property into the city but faces the same barrier.
“She just wants to sell her property so that she can have a good retirement and live her life,” Workman said. “Right now, the property’s not worth a whole lot because there’s no sewer line up there to get it developed.”
Both Beelart and Johnson wrote letters to legislators in support of the funding request.
Anderson, who represents Senate District 5 covering Philomath and surrounding communities, made the sewer project his top capital funding priority for the session.
The city had submitted a similar request during the 2025 regular session without success. This time, city officials revised their numbers, working with an engineer to bring the estimated project cost down from roughly $4 million to just under $3 million, and also committed $250,000 in sewer system development charges already collected from prior developments.
“We responded to Sen. Anderson and said ‘here’s the project.’ We updated the numbers a little bit,” Workman said. “We had some maybe inflated costs initially when we proposed it. We went back to the engineer, sharpened the pencil and got the numbers down a little bit.”
The city received its full $2.65 million request, with the remaining $250,000 coming from the sewer SDC fund.
McMorran called the project a particularly strong candidate for legislative support because of its broader economic implications.
“It is a really competitive, compelling ask because it’s not just an infrastructure project — it’s an infrastructure project that when completed unlocks additional housing capacity, additional economic development capacity,” he said.
Because the grant is financed through lottery bond proceeds, the funds aren’t available until the bonds are sold. According to the state’s Legislative Fiscal Office, bond sales often occur during the final six months of a biennium — Oregon’s current biennial budget runs through June 2027. Bond issuance could be delayed or canceled if revenues drop significantly or financial conditions change after a project is authorized.
Workman said the city will wait until funding is secured through a formal contract before hiring an engineer.
“We don’t want to incur a bunch of costs if we’re not able to submit for reimbursement,” he said. “So it may still be two years out before we break ground on this project. But I would say within the next year, we’ll probably look to start the engineering.”
In a capital funding request form, the city suggested that construction would begin May 1, 2027 with completion by Nov. 30, 2027.
“It’s a sewer main line that will start at College Street and go all the way up 19th Street and then it will go west on Industrial Way almost to the end, and then head up north into that future residential neighborhood,” Workman said.