Shaler officials will use a $3.35 million loan to solve a storage shortfall in the township's water supply that limits the township to a thin reserve in emergencies.

Last week, the Pennsylvania Infrastructure Investment Authority, or Pennvest, approved the loan that will enable the township to construct two new water tanks, enlarge two existing ones and build a new pump station.

Township Manager Tim Rogers said insufficient storage is the most significant problem the Shaler water department faces.

"We have less than a day's storage now. We're producing the water as people are using it," he said.

The system serves all of Shaler as well as Etna and parts of Hampton and O'Hara.

The lack of storage capacity, Rogers said, puts the department in a bind during a water line break or plant shutdown when residents must immediately curtail their water use. The expanded capacity will allow less drastic conservation measures.

Pennvest funds sewer, storm water and drinking water projects across the state. The state authority has approved more than 103 loans for projects in Allegheny County since 1988, including funding a new water well for Shaler in 1990.

After considering a number of other finance options, Rogers said, the township decided that funding from Pennvest was the best approach.

"It's not as fast as if you would float a bond issue," he said, "but a bond issue develops cost, whereas [with Pennvest funding] you're just getting cash, and the interest rates are better than developing a bond."

The Pennvest Web site lists the interest rate at 2.462 percent for the first five years of the 20-year loan and 3.312 percent for the remaining 15 years.

The project is currently out for bid. Once construction starts, it is expected to take a year to complete the work.