WILTON – The town will apply for a state grant to extend town water to homes with contaminated wells and take any other needed funds from the water department budget, officials decided after a public hearing Tuesday.

Town Manager Peter Nielsen explained that the town received a request for help from a Bennett Street resident about a year ago after discovering that his well was contaminated with coliform bacteria and could not be cleared with bleach. The town’s water department then tested wells in the area and found that several others on Bennett and Thompson streets were also contaminated.

The town applied and was approved to receive an urgent-needs grant. However, officials turned down the grant because it would provide only about half of the funds needed to extend water mains to the affected homes.

Now the town will apply for a Community Development Block Grant. That grant requires a 25 percent local match. Nielsen said the town will apply for $80,000, with $20,000 coming from local funds.

Expected costs for materials and installation to extend 1,360 feet of water main to eight residents on Bennett and Thompson streets is about $71,000, Nielsen said. The water will be hooked up to the residents’ homes, saving them the cost of connecting to the water line themselves. The project will include two fire hydrants, Nielsen said.

Nielsen recommended that selectmen borrow the matching funds. He said the loan could be repaid by new user fees generated from the residents in about 13 years.

But Selectman Keith Swett disagreed. Swett said he feels the town should use existing funds from the water department budget rather than have to pay interest on a loan. “You’re just throwing away town money if you do this. That’s all you’re doing,” Swett said. Selectman Rodney Hall and Chairman Jeff Rowe agreed with Swett.

Nielsen pointed out that selectmen voted in 1999 not to use town funds for such purposes in order to avoid situations in which developers expect the town to foot the bill for town water service. “I’m trying to keep up with the spirit of that vote,” Nielsen said.

Hall said either all of the new user fees would have to be applied to the loan, with no funds going to the water department for maintenance, or only a small amount from each resident would be used. Either way, water department funds would be used, but with a loan there would be additional interest to pay, officials said.

The water department currently has about $84,000 saved from a loan that was recently paid off. Nielsen said that money is earmarked for the installation of a new transmission line from Varnum Pond to the downtown area. Officials said they do not yet know what the cost of that project will be.

Officials said this is an unusual situation that is unlikely to occur very often. They said they have no knowledge of any other contaminated wells in town. The three selectmen in opposition to obtaining a loan also said they feel using grant funds and money from the water department budget is in keeping with the 1999 vote.

Nielsen said that if the grant application is denied, he does not know of any other grants currently available. He said the town could try to reapply. If the town is approved for the grant, Nielsen said the work is expected to begin in the spring or summer of 2005.