A one million gallon tank on East Office Street and improvements and additions to the city's water treatment plant make up the other two parts of the project.
Funding comes from:
* A $1 million Community Development Block Grant from the Department of Housing and Urban Development;
* A $1 million Kentucky Infrastructure Authority grant;
* A $2.5 million loan from Rural Development, and,
* A $1 million Rural Development grant.
The project will provide more water at better water pressure, not only to the city's residential and business customers, but also to the city's three biggest customers: Burgin Water Department, Lake Village Water Association and North Mercer Water District.
The work at the treatment plant will bring it up to modern standards but will not increase its capacity to treat water.
The most water the plant can treat in a day is four million gallons, Music said, and, after checking with the plant workers Wednesday, said only 2.8 million gallons were needed earlier in the week.
Increasing the capacity is part of Phase 2 and will be accomplished in the next five years, he said.
"Phase I will increase the efficiency of treating water," Music said.
Plant at least 30 years old
He estimates the plant is at least 30 years old and very little has been done to improve and maintain it.
Music said there are structural problems with the building, including crumbling concrete in the water holding tanks.
The roof needs work, and new filter media will be installed.
At the same time the water projects are getting under way, the last of the work on the city's $9.5 million sewer system project is being completed.
While both projects are necessary, repairs and replacements to the waste water treatment plant and improvements and additional collection lines were forced on the city by the state.
The Division of Water in 1998 stopped any new tap-ons to the sewer system until it was repaired and brought up to state standards.
The tap-on ban was lifted once the project was well under way.
Almost all of the sewer work is complete. About 90 percent of the work on the treatment plant has been done.
However, less than 30 percent of spot repairs was completed by the end of November.
City annexed five areas this year
Music pointed out that the city also completed the annexation of five areas around the city this year. They are:
* About six acres on Mackville Road;
* 157 acres between Dry Branch and Perryville roads;
* An addition to Alexander Heights subdivision totaling more than 126 acres of land;
* About 56 acres of land on U.S. 127 south of the city, and,
* About 14 acres on U.S. 127 north of town.
The total acreage annexed is about 360 acres or a little more than half a square mile, Music said.