GOSPORT — Approach this northeastern Owen County town on a hill from any direction, and the first thing you see is the tall old silver water tower.

It's been there since 1926 — but for the past few years it has been a symbol of the town's most irritating problem: murky drinking water.

For the past several years, the water has been increasingly discolored by iron.

It can range from tan through brown to virtually black — and townsfolk and town officials alike say it's worst right after hydrants and mains are flushed out.

But thanks to nearly $1 million in state grants and low-interest loans, a major overhaul of the system is planned to start by late summer, and town officials hope it solves the problem.

Right now, while it varies to some degree, people all over town report the problem.

"Yeah, it's black, but there's nothing we can do about it," Third Street resident Jayne Page complained Friday afternoon outside her house.

Page said she refuses to even use it, even though she's paying for it.

"I'm not going to drink it," she said. "I don't even like to do my dishes in it. I buy my water."

Rick Hollows lives on Fifth Street at the south edge of town, where the road winds up from the White River bridge.

"Oh, you mean the water that wrecks our washing machines," he said.

"With the lime and the hardness, we've had trouble with the washers, and we have to change our shower heads every three months," he said.

"When they flush the hydrants, everything comes out dark brown, and you have to run the faucets for a long time."

Ned Smith, a North Street resident who said he's lived in town "off and on for 70-some years," said that at his house they run the washer until the water finally runs clear, and only then put in soap and clothes.

Smith said the problem began getting bad a few years ago.

"We've always had hard water — rock-hard — but not dirty like it has been," he said as he sat smoking a cigarette inside Donnie Hall's old-fashioned downtown hardware store.

Smith found his own unique way to protest the situation with the town board.

"One day we did laundry and my underwear was rusty, so I took a pair and hung 'em up in the town hall," he said.

People at town hall have their own problems with the water — aside from having to live with it at home themselves.

"We've had all kinds of trouble with that stuff," fire chief Lon Neibel said, confirming that it has clogged pumps on their trucks and nozzles on their hoses.

"One time we took handfuls of rust and other stuff out of one," he said.

The culprit, said town clerk-treasurer Michelle Seidenstucker, is increasingly iron-laden water that the current system can't eliminate.

"It's not a health hazard, of course," she said, noting the water has been certified as safe to drink, even if it looks more like Coke or black coffee than water after the system is flushed.

But the town finally has the means to tackle the problem, she said, thanks to a $475,000 grant from the Indiana Department of Commerce and a $490,000 low-interest loan from the state that will be repaid by higher water bills starting in a couple of years.

Right now, she said, the system's 375 customers — families and businesses — pay a base rate of $18.39 per month for their first 3,000 gallons of water, plus a sewer bill of $11.85 per 1,000 gallons of use.

In two years, Seidenstucker said, the water bill could jump to as much as $33.27 for the first 3,000 gallons of water, but she added that she doesn't think it will come anywhere near that.

What the town will get for the money is a project that could be bid out in August after final engineering plans are approved. Completion date is not set, but the state grant requires that it be within 18 months.

The project involves eight parts:

Dig a new well to replace the two existing ones, tapping a new aquifer that has tested very clean. Of the town's current two wells, one was shut down years ago because the iron ruined it, and the iron content of the other is getting worse by the month.