FREELAND — Proponents of a sewer system for Freeland are weighing their options after failing to win federal stimulus money for the project.

“I wasn’t surprised,” said Chet Ross, president of the Greater Freeland Chamber of Commerce and a prime mover for sewers. “We weren’t shovel-ready.”

Sewer backers applied for $5.6 million in stimulus money for phase one of the five-phase project. Phase one would install sewers in Freeland’s downtown core. Four subsequent phases would extend the system outward and into residential areas.

Earlier this year, the application on behalf of the Freeland Water and Sewer District was submitted to the state Department of Ecology, which was in charge of disbursing stimulus money from the federal American Recovery and Reinvestment Act for projects in 2010.

The Department of Ecology had $65 million in stimulus money to distribute for water and sewer projects throughout the state, said Gary Hess, senior engineer with Davido Consulting in Freeland, which prepared the grant application.

The state received requests totaling $430 million, Hess said.

“It was really competitive,” he said. “We didn’t make the cutoff, partly because of the shovel-ready aspect. We’re not quite there.”

“I spent a lot of time on the application,” he added. “It was tough, like doing a take-home exam in college.”

When the stimulus plan was first announced late last year, Freeland sewer proponents, hoping to get a jump on the competition, quickly submitted a request through Sen. Patty Murray’s office for $30 million, enough to complete the first four phases of the project.

The application was downsized after it was announced that the stimulus money would be disbursed through the states, Hess said.

He said Freeland sewer proponents are looking toward submitting another application in September, when the state’s funding period opens for 2011.

But the state has its own budget woes, and it hasn’t been determined if more federal stimulus money will be available for sewer projects, Hess added.

Meanwhile, sewer proponents also looked into acquiring money from the state’s Public Works Trust Fund. But as of now, there’s no money available, Hess said, thanks in part to the state’s reshuffling of resources to cover other budget shortfalls.

“Everyone’s crying the blues,” Hess said. “It’s hard enough to get grants in normal times. It’s a lot tougher now.”

Both Hess and Ross said the failure to obtain a grant this time around hasn’t dampened enthusiasm for the Freeland project.

Ross said sewer boosters would continue to meet and press for ways to make the project happen, but he declined to reveal details for now.

“I’ll be more intelligent in a couple of weeks,” he joked.

Meanwhile, Freeland boosters continue to press to forge a community identity for South Whidbey’s largest commercial area.

Island County officials have begun a series of community meetings to come up with a set of development rules specific to the Freeland area. Freeland currently is subject to general county development regulations.

The Freeland Sub-Area Plan has been approved detailing development options downtown and in the surrounding area, and a group of residents in favor of incorporation continue to push to make Freeland the island’s fourth city, joining Langley, Coupeville and Oak Harbor.

The sub-area plan projects a population in Freeland’s designated 1,061-acre urban area of 4,000 by the year 2020.

While sewers aren’t a prerequisite for cityhood, a sewer plan that can be implemented “in a reasonable amount of time” would be required.

Meanwhile, Hess remains upbeat about the prospect of eventually getting sewers for Freeland.

“People are still talking,” he said. “We haven’t dropped off the map. We’re just trying to work out a strategy.”