Contractors broke ground last week on the $1.165 million Mancos Water System project.
The project includes a new water storage tank, two new water pumps and new water lines to increase flow.
The project is expected to be paid by a USDA Rural Development Loan, Colorado Department of Local Affairs and local contributions.
The project was awarded to Redpoint Contracting and will be paid in part with a $491,000 loan from the U. S. Department of Agricultural Rural Development and a $455,000 grant from the Energy and Mineral Impact Assistance Fund. The town will pay the remaining $219,407, $157,000 of which will be paid by a private developer, according to town documents.
The water tank will be built next to the current tank near the water treatment plant. The current tank stores 300,000 gallons of water. The new tank would hold 430,000 gallons.
"On a hot summer day, we can use up to 400,000 gallons easily," Town Administrator Andrea Phillips said.
The improvements aim to keep Mancos from a repeat of February 2014, when Mancos had no drinking water for more than five days after a pump and its backup failed.
On Thursday, April 2, a crew will install valves for the new water tank at the treatment plant. Residents will see reduced water pressure for several hours beginning at 1 p.m.
Residents may initially see discolored water - which won't be hazardous - and are urged to run their water for 10 minutes to flush the lines.