Officials at the city of Anderson, Indiana, have announced the city was awarded over $45 million in state funding to support major planned water infrastructure improvement projects across the city.
The city of Anderson, which applied to receive the funds, will get the funds as a forgivable grant as well as in a low interest financing package. Anderson Mayor Broderick notified the state that he had accepted the award late last month, representing, the largest awards ever provided to the city for a project of its caliber. The funding will be split among some of the city’s most urgent water infrastructure projects.
A total of $12.5 million of the award will come in the form of a forgivable grant, meaning it will not have to be repaid by the city provided it makes all the improvements detailed in the project’s plans. This total award has been further split into smaller grants dedicated to specific goals:
Anderson will receive approximately $5 million for lead line replacement after the city completed an inventory of existing lead lines late last year. The money will fund replacing all lead lines and lines exposed to lead line connectors. It will cover all areas where the lines exist, including lines running from water meters into residential homes, a replacement usually done at the cost of the homeowner.
The city will utilize $2.5 million for the engineering and design costs of a proposed new water treatment plant on the city’s south side. The construction of a new plant would allow the city to shut down the old Wheeler Water plant, where parts are about 70 years old. The new plant would also enable the city to shut down and eliminate the current six aged wells, all of which are also over 70 years old. The wells have lost significant capacity in recent years and maintain contaminants, according to city tests. The new water treatment plant and wells would provide residents with safe, clean drinking water and assist in the elimination of Per- and Polyfluoroalkyl substances (PFAs).
About $5 million in awarded funding is available to fund the overall project and its goals. Besides the water treatment plant, the project has outlined the replacement of old leaking water
lines, continual annual replacement of worn-out water meters, water tank maintenance to the city’s eight water towers, expansions and extensions of water lines to promote growth and water capacity in Anderson, and the upgrading of old equipment.
The state has also petitioned the Indiana Regulatory Commission (IURC) for authority to adjust rates to be able to issue bonds for the project. If approved, rates will begin to rise in a five-phase implementation beginning in early winter. The rise will mark the first increase in rates in nearly 10 years for Anderson residents. The adjustment was authorized by Anderson City Council in 2024 to pursue funding for the project and included issuance of up to $130 million in bonds.
Further funding for the project includes $9 million of American Rescue Act Funds and $19 million in tax increment funds (TIF) committed by the Anderson Redevelopment Commission. Currently, Anderson’s water rate, including for fire protection, is $26.98 per month for 4,000 gallons of water, among the lowest in the state.
If the petition is approved, the balance of funds awarded to Anderson will be:
- $5 million SRF loan at 0% interest for the overall project.
- $10 million traditional SRF loan for the overall project, with an interest rate to be determined, will be by design well below market rates.
- $17.6 million in SRF Pooled Loan funds intended to fund the balance of the subject projects, available at below market rates.
The newly planned overall water infrastructure project continues the city’s commitment to water utility. Since 2016, Anderson has used over $25 million for exploration, location, drilling and testing through hydrological efforts, location and construction of new wells, replacement of 20,000 feet of water mains, construction of the new Lafayette Water Plant, installation of a new booster station, replacement of thousands of water meters, and repairment of hundreds of leaking water mains.
Photo by Wenderson Costa from Pexels
