LOTT proposes $18M upgrade to Martin Way wastewater system 

The LOTT Clean Water Alliance is preparing a major wastewater infrastructure upgrade in the City of Lacey.

The estimated $18 million project involves improvements to the Martin Way Pump Station and an additional pipeline to handle more wastewater flow. 

LOTT Executive Director Matt Kennelly presented the project during a Lacey City Council work session on Oct. 27. The project is in the early design stage, with construction scheduled for 2028 or 2029. 

The station is one of three major pump stations in the LOTT system; it last underwent improvements in the 1990s and early 2000s. 

“Those pumps are old. They need to be upgraded. The generators need to be replaced,” Kennelly said. 

LOTT plans to install a new 20-inch pressurized pipeline parallel to the existing 18-inch pipe. The second line will allow more wastewater to pass through the system without requiring costlier pumping equipment or a larger station, Kennelly said. 

Kennelly explained both pipelines will likely run at the same time, fed by a common header that splits wastewater flow between the two lines. The pipelines would then discharge into a gravity sewer, so the utility would not need separate pumping systems. 

The regional wastewater system also experiences sharp increases in flow during periods of heavy rain. The Budd Inlet Treatment Plant processed an average of 12 million gallons per day in 2025, but peak flow reached 60.4 million gallons per day during periods of heavy rain. 

Although stormwater dilutes incoming wastewater, increased volume reduces the time available for biological treatment. Kennelly said treatment staff must increase airflow to compensate for the faster flow, while meeting the same discharge standards. 

“But we have to meet the same standards leaving, and so the difficult part is that the wastewater treatment system likes stability,” Kennelly said. 

Rising costs 

The LOTT Board of Directors recently approved a $146 million budget for 2027-28, with 69 percent allocated to capital projects.

The monthly wastewater treatment charge will increase to $50.42 in 2027. The LOTT finance plan calls for annual rate adjustments of 3 percent. 

Combined wastewater charges in Lacey remained below the comparison average in 2026. Customers paid a combined rate of $85.22 for city collection and LOTT treatment, compared with an average of $96.25 for 33 utilities in the state.

Kennelly said low interest state loans have become more difficult to obtain, making municipal bonds a more expensive financing alternative.

Rising electricity prices and lengthy equipment delivery schedules have also complicated infrastructure planning, with some electrical components requiring more than two years for delivery. 

The utility is also examining advanced water purification technology, as climate change and declining snowpack increase pressure on regional water supplies. 

Purified water pilot 

LOTT is also preparing a pilot project to test Class A+ purified water, a level that requires additional treatment beyond the Class A reclaimed water currently produced by the utility. 

The demonstration will process reclaimed water through a small treatment system, and test the resulting water against drinking water quality requirements before returning it to the sewer. The pilot won't connect to drinking water supplies. 

Kennelly said early testing will give communities time to evaluate the technology, and learn about its potential applications before facing more immediate decisions about future water supplies. 

“Typically, what you see is communities are resistant to this because things come fast, right?” Kennelly said. “They’re running out of water, and so time is a strategy here.” 

Advanced water purification has been used since the late 1960s, including in San Diego and Orange County, California, according to Kennelly. If the demonstration proves successful, Lacey could eventually consider using purified water to replenish its aquifer. 

The city already runs the Woodland Creek recharge facility, and the site receives Class A reclaimed water from the LOTT Martin Way plant. 

LOTT developed the demonstration project with state regulators, the City of Lacey and Squaxin Island Tribe. 

The technology could eventually reduce wastewater discharges into Puget Sound and address community concerns about chemicals in treated water.

However, Kennelly said, the high cost of full-scale purification means the current plans remain limited to a demonstration.