The city of Ouray has been approved for a loan of up to $18.5 million to pay for the construction of a new wastewater treatment plant, even as officials acknowledged the loan amount and potential interest rate attached to it are higher than they’d prefer.

City councilors on Monday unanimously approved a pair of emergency ordinances — one to approve a loan not to exceed $19.5 million from the Colorado Water Resources and Power Development Authority and another to hike sewer rates more than 25%...