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Port Townsend is in line for $4.5 million from the Washington State Department of Ecology, pending final approval. The funding includes $3 million for a sewer separation and street restoration project on Lawrence Street, and $1.5 million for repairs to the wastewater treatment facility's outfall pipe.

City staff applied for these funds in September 2025, with expectations to secure them by March 12, 2026. The Lawrence Street project, estimated at nearly $6 million, aims to reduce stormwater inflow into the sanitary sewer and improve accessibility. The outfall pipe project will address leaks with a focus on minimizing environmental impact, with a local match of up to $300,000 from wastewater funds.