The U.S. Environmental Protection Agency has finally lowered the boom.

Yesterday, the EPA denied Honolulu's application to renew its waivers for the Sand Island and Honouliuli wastewater treatment plants.

Now the city faces what it says it can't afford: An estimated $1.2 billion upgrade of the two plants to provide secondary treatment to the effluent that's discharged more than a mile offshore.

Mayor Mufi Hannemann's administration has fought vigorously, and rightly, to preserve the waivers, arguing that our long-neglected collection systems — those rotting sewer pipes underneath our homes, streets and businesses — should take first priority with the limited funds available through sewer fees.

While the city decides whether to appeal the EPA's decision, it's also important to plan ahead. The EPA and the city should work together to develop reasonable solutions in the best interest of Honolulu. And environmental groups need to allow the process to move forward without costly, unproductive lawsuits.

Certainly, the upgrades should be done eventually: A clean and healthy aquatic environment is crucial for Hawai'i's long-term economic well-being. For now, scientists and academics argue that the treated effluent is not harming the environment near the deep-water outfall.

And in these tight times, we must set priorities carefully, focusing on the most critical of repairs first.

The city and the EPA need to develop a settlement that provides a realistic schedule for upgrading the treatment plants that takes into account the need to fix the collection systems first.

The city should also investigate further whether state-of-the-art technology can lower its cost estimates to build and maintain the treatment plant upgrades.

Meanwhile, the city needs to vigorously pursue federal help. "I can't put this on the backs of local taxpayers in terms of raising sewer fees," Hannemann said yesterday afternoon. "We need to look for federal money."

Amen. Turning to Washington is especially important now, with a massive federal stimulus program in the works that keys in on infrastructure projects.

Improving Honolulu's sewage system — from collection to outfall — will take time and money. Both should be used wisely.