BRUCEVILLE — Town officials here are received a $330,000 state grant to begin construction on a new water tower.

The state mandates each municipality to have at least 24 hours of clean, fresh water available at any given time. For a town the size of Bruceville, the tower should hold at least 44,000 gallons — 14,000 gallons more than the current structure’s capacity.

The grant comes with a stipulation: Council president Tim Murphy said the town must raise water rates by 31 percent this year and another 32 percent in 2015.

“The state said we could have the money, but the stipulation is we have to bring our rates up in order to be in compliance for the rules of the grant,” he said. “I don’t want to raise the rates, but if we’re going to get help, we have to, it’s either fix the tower now, on our own terms, with help, or the state will do it and hand us a bill for it.”

Last year, the town had tried to secure a grant from the Indiana Office of Community and Rural Affairs for the project. However the application was denied after a study revealed water rates were too low.

“We’re not even breaking even with the rates right now,” Murphy said. “We’d have to raise water rates at least 7 percent just to break even, we’re losing money on the water system.

“And if we were to take on this project on our own, we’d have to raise the rates 93 percent,” he said. “I don’t want to raise the rates, but it’s something we have to do.”

Murphy said the timeline to prepare for the construction as been put on an expedited schedule, bringing the town into compliance with all application stipulations before closing on the grant in May.

“This puts us on a really, really tight schedule to get all of the permits and clearances, to make sure all of the state agencies are on board and getting the clearances from the people from the ground we need to use for samples to be taken,” he said. “We’ve signed the papers accepting the grant offer to get the ball rolling, we still have to hold a public hearing to decide if we’ll implement the rate increases or not.

“That’s one of the things we don’t really have a choice on if we’re going to get the money from the state,” Murphy said. “But we still have to have the public hearing and allow everyone their opportunity to discuss it in an open forum and explain our position, too.”

The town could once again apply for money through the state Office of Community & Rural Affairs but only if officials were willing to increase water rates even more.

“So we can accept the lesser amount that has already been guaranteed, and have gradual rate increases, or we can wait and if we miss out on the next grant (Indiana Department of Environmental Management) can come and say we’re not making an effort to fix the problem,” Murphy said. “They can say we’ve had money guaranteed to us, and we’d have turned it down, and then they’d have every right to start fining us, causing us to be even deeper in the hole.”

The first phase of rate increases will not come into effect until after a public hearing, which has not been scheduled, Murphy said.

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