The Nevada County Board of Supervisors forgave about $500,000 in loans Tuesday made in recent years to bolster and rebuild the Cascade Shores wastewater treatment plant.

The forgiveness of loans from the county's general fund to its sanitation district will allow the county to produce a financial plan for the new plant for the state that is affordable and meets water quality standards.

It also paves the way for an upcoming vote of 84 homeowners to see if they are willing to increase annual sewer rates from $1,995 to $2,445 to pay for it. If the board had not forgiven the loan, the vote would have been for $2,875 per year.

Robert Crabb, head of the Cascade Shores Homeowners Association, said he thinks homeowners will approve the smaller increase for fear the state will eventually red tag their homes if they refuse to fund a new treatment plant.

The homeowners have the right to do so under Proposition 218, and did just that in 2006, when they rejected a plan to increase their $1,995 annual rate to $4,500.

The Cascade Shores treatment plant was slated for an upgrade in 2005 to meet new federal and state water treatment regulations.

A landslide knocked the plant off-line in May 2005, compounding problems and forcing the eventual replacement cost to $5.1 million.