ROSE CITY — The Rose City Department of Public Works is currently waiting to find out if it will be the recipient of a $750,000 community block grant, which will be used to improve the city’s water system.

However, to get that money, the city has to spend some money as well. At last Tuesday’s city council meeting, the city council voted to borrow $25,800 from the sewer department to perform a preliminary engineering report, according to Assistant Superintendent Mike Killackey. The city will also need to borrow between $200,000 and $275,000 from the United States Department of Agriculture as a match for the grant.

The USDA loan would include paying back the $25,800 to the sewer department. The city would then pay back the USDA loan over a 40-year term. Killackey said he is unsure what the interest rate would be on the loan at this time, but it should be either 3.375 percent, or 2.25 percent.

Killackey said the project, which would include additional hydrants and water lines, would be good for the city.

“It definitely needs to be done,” he said. “It would help out with fire flows, and increase the number of hydrants. It would be important for the city. We have a few people that would like to hook onto the system. It would be beneficial for the city.”

Killackey said the preliminary engineering report would basically be a master plan for the city’s water system.

“It will tell what we have, plus the future expansion that we want to do,” he said. The report is necessary for the city to be considered for the USDA loan.

In addition to the engineering report, which will cost $25,000, the city will use the additional $800 from the sewer department to perform a rate study, in order to determine what water rates would need to be to support the new system. Killackey said the hope is that by expanding the current system to include more customers, the city won’t have to raise rates. He said if they do, it shouldn’t be a big increase.

“As of right now we can’t tell (if they’ll have to raise rates),” Killackey said. “But if we do, it won’t be much.”

He said it has been around 20 years since water rates in Rose City were last increased.

“Right now we’re below normal,” he said. “We’re about $10 below normal.”

The city council voted unanimously at last week’s meeting to borrow the money from the sewer department. Per the motion, the money will be paid back with interest. If the city does not receive the grant, then it would not borrow the money from the USDA, and would only be responsible for paying back the $25,800.

However, the possibility of the grant falling through had some council members concerned about spending the money to begin with.

“We all understand that it’s got to be done,” said councilmember Jana Healey. “We all understand that it’s necessary. However, I have the feeling that, gosh, $25,000 to do a study, even though we have to have it to complete other things, I think our concern is that if it’s a dead end and things don’t progress and don’t happen, we’ve approved to spend this money. And that rests on our shoulders, in the event that it falls through. It’s not that we don’t want to spend it. We know it’s got to be done. However, it’s a lot of money. Even though we’re borrowing it from ourselves, it’s a lot of money.”

Killackey said, however, that he’s pretty sure the city will receive the grant.

“From what I’ve been told, they’ve said it’s pretty likely,” he said. “We are a prime candidate for it.”

Killackey said he would know by the end of April whether the city had received the grant.