BAYLES LAKE -- The Illinois Environmental Protection Agency has denied the Bayles Lake community the funding it had requested for a $5 million sewage-treatment plant.

Jay Ross, chairman of the Loda Sanitary Sewer District's board of directors, said during a board meeting this week that he received a letter in February from the IEPA, stating that the agency has no funds left through its Unsewered Communities Grant Program, for which the sanitary district applied for funds on behalf of Bayles Lake.

The only other funding option expected to be available, according to the letter from the IEPA, is a 20-year loan with an anticipated interest rate of 2.5 percent. And to cover the estimated $4.7 million loan, the 260 homeowners in Bayles Lake would need to pay $106 a month in sewer charges. The IEPA called that figure unaffordable.

The IEPA indicated Bayles Lake and the sanitary district would need to figure out a different financing source.

"As you know, this monthly fee would be in addition to other one-time costs the homeowner would be responsible for in connecting their home to the public wastewater collection system, including costs for the installation of facilities in the home to pump wastewater to the public collection system and to properly abandon their existing wastewater treatment/disposal system," the letter stated.

Because of the costs, the IEPA requested that the sanitary district submit a "facility plan amendment" before the agency continues reviewing the project.

Engineer Ted Jeurissen of Berns, Clancy & Associates, Urbana, told Ross and the other two members of the sanitary district board that he contacted the IEPA about funding. "It doesn't look like there will be any money available any time soon," he said.

The board discussed possible alternative funding options including tapping into the IEPA's 20-year low-interest loan program, as well as using stimulus funds the IEPA has received or utilizing Rural Development loan or grant programs.

But none seemed affordable to Bayles Lake Homeowners Association President Greg Weller, who expressed concerns about even continuing.

"We're very apprehensive of spending more money on this until there's a light at the end of the tunnel," said Weller.

Jeurissen said the plant's costs and subsequent costs to homeowners is "a matter of how bad do you want it."

Ross added: "And how (the IEPA is) going to continue to regulate the law, and enforce the law, because we're all in violation."

Ross was referring to the existing septic tanks at Bayles Lake that illegally discharge waste into waterways. That problem led the community to seek a sewage-treatment plant.

The preliminary and final design engineering for the plant is still not finished, Jeurissen said. Bayles Lake has already allotted about $54,000 for preliminary engineering work, of which about $10,000 has been used. The final design cost would be an additional $70,000, Jeurissen said.

"So Bayles Lake is looking at about a $120,000 expense," he said.

The sanitary district board plans to discuss options further at a meeting called for 5:30 p.m. May 23, at the Loda firehouse.