BATH — A grant to the Town of Bath that was frozen by the state was reissued this week.

The grant, from the nonprofit Rural Economic Center, was intended for use in the $2.1 million construction of Bath’s new wastewater treatment facility. The N.C. General Assembly opted to freeze the center’s grants and ultimately voted to defund the center after a state audit found it had failed to follow the law and regulations in awarding grants. As a result, the funds normally dispersed by the Rural Center are now being awarded by the state’s Commerce Department.

Gov. Pat McCrory’s office announced Sunday that more than $730,000 in grant payments, including Bath’s payment of $42,861, had been approved by the Commerce Department.

According to the state audit, the Rural Center received $145.5 million in state funds during the fiscal years 2008 and 2009 for the Clean Water Partners infrastructure program — $500,000 of which was allocated to the Town of Bath for its new facility.

“The announcement was really just saying that they’re going to continue their commitment,” said Bath Town Administrator Bubs Carson. “It was just one component from many funding agencies coming together for that project.”

With the combination of federal, state and Golden LEAF grants, along with a $800,000 loan, the town’s new wastewater treatment facility is 70 percent completed and the plan is to be operating by early 2014, Carson said.

Now the end is in sight for a process that started 20 years ago, when the failure of a number of private septic tanks on lots along Bath Creek became cause for concern, he explained. A town investment then built what was likely North Carolina’s smallest municipal wastewater system, but the state was soon back saying that the lagoon used to spray effluent was not large enough.

“We spent a considerable amount of money in the early ‘90s purchasing another lot to expand and build a new lagoon,” Carson said. “But after we spent that million, the state came back and reduced our permit from 40,000 to 22,000 gallons per day because the soil was not adequate to absorb any more than that.”

That’s when the state issued a moratorium for Bath: no more homes or businesses could be hooked up to the existing wastewater system, which has really hampered expansion of some businesses, as well as the ability of owners to build homes on lots too small to support septic systems, Carson said.

The town’s only real choice was to build a new wastewater treatment facility to get the moratorium lifted.

That the Rural Economic Center money would still be allocated for a project which will, ultimately, allow Bath to grow, came as good news to town officials.

“We’re just pleased that we’re going to continue to get that funding because every penny is needed to bring that project to completion,” Carson said.