By PHYLLIS ZORN

Staff writer

A $600,000 Community Development Block Grant to help fund an upcoming water line replacement, if the city is approved for it, would mean significantly lower rate increases for Marion residents.

Financing was originally arranged through a United States Department of Agriculture loan at 3.125% interest, but interest rates have since dropped to 2.2% for a loan through Kansas Department of Health and Environment’s revolving water fund, which makes loans to rural water districts or small cities.

Base water rates were expected to increase $17.73 to offset the city’s portion of the $3.9 million, 37-block project.

That would bring the base charge to $47.73.

City administrator Roger Holter told council members Monday that if the city can win the CDBG grant, it will reduce the rate hike.

Council members approved application for the grant and the Department of Health loan.

Public hearings will be held on Sept. 9 for the grant application and Oct. 7 for the loan application.

Council member Jerry Kline said he thought doing half of the project could prevent the city from being overextended, but engineer Darin Neufeld said prices for needed items are low, and it is not possible to predict their future cost.