Marion aldermen on Tuesday voted to begin the process of seeking a Capital Improvements Revolving loan to cover the town’s matching portion of a $3.4 million Corps of Engineers grant.

In February, Town Engineer Shawn Miles announced Marion had been awarded the grant through the U.S. Army Corps of Engineers 592 program to build a new water treatment facility, water well and other improvements to the town’s potable water system.

The improvements, Miles said, will set Marion up for future growth, add needed redundancy to the system and take pressure off the town’s only water treatment facility, which is nearing peak capacity.

Mayor Larry Gill said the loan is needed to meet the town’s match requirements for a $3.4 million grant. The grant, he said, requires a 25% match, and Marion must be able to prove it has the funds on hand.

“We’re going to have to take it out initially to fund the 25% of the grant we received,” he said.

CAP loans were created by the Mississippi legislature to help counties and cities fund infrastructure improvement projects. The program, which is administered through Mississippi Development Authority, offers 20-year loans at 2% interest for tax-exempt projects and 3% for taxable projects.

Gill said the town’s 25% match would be between $800,000 and $850,000.

The CAP loan, however, is a short term solution to meet the requirements of the grant and to get started on building the new water infrastructure, Gill said. The town will also be pursuing other grants and funding sources to pay back the loan.

“We’re still going to research grants and things like that to take care of that $850,000, but we’re going to take out the loan so we can go ahead and start the process now,” he said.