NORWICH – Nearly a year and a half after city officials created space in the budget for a new multi-million dollar water tank, the project is moving foreward albeit slower than originally expected, and at a greater cost.

The project, initially estimated at $2.7 million, has been upped to approximately $3.4 million due largely to unforeseen costs of lead abatement and incidental expenses. City Council members approved up to $780,000 in additional bonds for the project at a special meeting called earlier this month, though the goal, said Department of Public Works Superintendent Carl Ivarson, is to utilize as little of that money as possible

“We also have grant funds available that we can use, but we can’t use that until we use other funding first,” Ivarson said, citing a $750,000 federal grant awarded to the city in 2014 through the United States Department of Agriculture - Rural Development. “Right now, we’re trying to lower the cost of the project. We obviously don’t want to borrow what isn’t necessary.”

The increase in costs may mean Norwich taxpayers will see a change in their water rates in the not so distant future. Repayment of bonds for the tank will be paid through water bills rather than property taxes.

The city has additionally been approved for a $1.85 million federal loan, also made available through the U.S. Department of Agriculture’s Rural Development division. The city will pay a 2.5 percent interest rate on that loan for a term of 38 years while remaining costs of the project will be borne by local taxpayers.