Whitefish City Council has approved state loans to finance the expansion of the city’s water treatment plant.

The city will use $11 million in State Revolving Fund loans to fund the project.

Council last month approved the construction contract for the expansion of the plant at a cost of $9.3 million to Swank Enterprises.

Finance Director Ben Dahlman said the state loans are a significant financing mechanism for the project and provides the best rate for financing it.

He said revenue from the water utility will be used to repay the financing of the project and no rate increase is anticipated as a result of it.

In addition to the state loans, the city is also using $1.3 million in reserves for the project.

Increasing demand on the city’s water treatment plant are driving the upgrades. The Montana Department of Environmental Quality is requiring the city to upgrade its capacity to a 5 million gallon per day capacity with the ability to increase to 7 million gallon per day capacity in the future.

The main work of the project includes expanding the water treatment plant to increase the number of filters at the plant. The city treats water from Haskill Creek and Whitefish Lake to be used for drinking water.

In addition to the actual expansion of the water plant, there are several other items that will need to be accomplished to expand capacity. Those include the expansion of the Whitefish Lake intake pump station, installation of a parallel water main to the treatment plan and extension of the city’s sanitary sewer to the water plant.

DEQ last spring began prohibiting any new water extension or connections due to concerns that the city was approaching its threshold for water storage and water source treatment capacity. In August, DEQ granted the city a deviation variance that allows new water connections again while the city works to increase its water system capacity.