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PRIEST RIVER — The Idaho Department of Environmental Quality is awarding the city a $1.65 million construction loan to upgrade its drinking water system.

The funding will be used to construct a new 440,000-gallon reservoir and install a new backup generator, according to DEQ, which announced the award on Tuesday.

“This is the first drinking water loan for Priest River,” said MaryAnna Peavey, DEQ’s Grants & Loans Bureau chief.

Idaho DEQ authorized by state law to make loans to assist in the construction of public drinking water systems. The loan from DEQ’s revolving loan fund, which is capitalized every year by grants from the U.S. Environmental Protection Agency, carries a simple 2.75-percent interest rate and is payable over a 20-year span.

The existing reservoir was originally built in 1963 with a diameter of about 50 feet. It stands 30 feet tall and has a metal roof constructed of a series of welded steel plates.

Eclipse Engineering conducted a site visit of the facility in 2017. The purpose of the site observation was to determine the structural integrity of the water tank and propose options for fixing or replacing it.

“There were creaking sounds coming from the roof while walking around the perimeter. It sounded similar to rust cracking,” Sushil Shenoy, project manager at Eclipse, noted in the report.

Options for remedying the aging structure were few — abandoning it or replacing the roof and using the existing tank wall to support it.

“It should be noted that there was no information available about the foundation of the tank, and it is likely to have several structural deficiencies,” Shenoy, a professional engineer, said in the assessment.

Engineering outfit Welch Comer recommended that the existing structure be replaced.

The city excavated next to the tank and found no existing foundation, meaning the structure does not meet current codes/standards. Full replacement was recommended to provide the city with longest term and most reliable solution that meets all current codes and standards and would therefore be eligible for funding,” Welch Comer said in a 2019 addendum to its analysis.

Keith Kinnaird can be reached at kkinnaird@bonnercountydailybee.com and followed on Twitter @KeithDailyBee.