The future of Harmony's water system remains murky overall, but one thing seems clear: A merger with Zelienople is all but dead.

Harmony council President Jeff Smith told council Tuesday that he got a phone call earlier that day from Kelly Burch, the regional director for the state Department of Environmental Protection, informing him that there is no state money available for the merger.

Officials from the two boroughs had been hoping for at least $6 million in grants to offset some of the costs involved with combining the two water systems.

A merger is one possible solution to Harmony's water woes; it faces an estimated $5 million in improvements if it wants to retain its independent system.

But Zelienople council said it would only be interested in the regionalization, if it could keep its average water rates at or below $30 a month, which could only be achieved with state money.

Without grant money, Smith said, average user rates in both boroughs would be about $40 a month.

He said the news from the DEP makes it highly unlikely Zelienople will want to merge.

"Why would they raise rates $10 per customer for no benefit?" he said. "The merger won't be going anywhere."

The Harmony Water Authority, at its September meeting, voted to recommend council pursue the merger, but with the stipulation that a new water plant be built to service both boroughs on the Little Connoquenessing Creek.

The original merger plan was to use Harmony's water source -- Little Connoquenessing Creek -- and Zelienople's treatment plant. Harmony authority members expressed reservations, however, after Zelienople's plant was flooded and disabled Sept. 17.

Without the merger Harmony is left with either making improvements to its own system or selling the system to Pennsylvania-American Water Co., which has offered $1.5 million.

Council took no vote on that offer Tuesday, and members seem split about how to proceed.

Councilman Harold Herr, who seems to favor a sale, said he believes the DEP wants to eliminate small water systems wherever it can.

"The DEP will not get off your back no matter what you do," he said.

The Water Authority did, however, get an extension from the DEP until Nov. 30 to decide how it will comply with a consent order it signed this summer.

Harmony is dumping silt back into Little Connoquenessing Creek and has been told to stop the practice or get a permit from the state to do it.

Herr said the authority is consistently losing money despite recent rate increases.

"You just raised your rates 50 percent and you're still running in the red," he said. "What does that tell you?"

Smith said Pennsylvania-American officials this week told him if the borough does not decide to sell the system soon it will re-evaluate its offer.

"If you're ever going to sell this may be your last chance," he said.

But not everyone agreed.

Councilmen Dave Szakelyhidi and Chuck Beighey said they believe the Water Authority can continue to function on its own. And borough engineer Dan Miller told council it would cost about $70,000 to fix the silt issue.

Some council members believe improvements to the water plant and infrastructure could be made for less than the estimated $5 million that has been discussed.

Smith said the DEP indicated there would not be any state funds available for those projects, however.

Councilman Gary Habsburg said fixing the silt problem would mean next to nothing in the long run.

"In the scheme of things that means nothing to what we face," he said. "But it's easy to keep not making a decision."

A recent study by Resources for Communities and People, the agency that coordinated the merger study, indicated Harmony's 640 customers could be facing doubled monthly water bills if the authority decides to make the improvements, and if the $5 million estimate is correct.

And that's if it can get a loan: A year ago the authority was turned down by the Washington County Authority bond pool for a $5 million loan because of the system's small size.