The deal was nearly approved earlier this month, but concerns about the water supplied to the George Dickel Distillery were a sticking point.

The distillery had been getting its water from Cascade Spring since 1870 and the whisky maker had concerns about how it would impact their brand.

Mayor Don Gallagher said David Money of the Tennessee Department of Environment and Conservation approved the filtration system at Dickel and that Wartrace will run a dedicated three-inch line to the distillery.

Wartrace receives approximately $140,000 a year by furnishing water to the facility, which values the Cascade Spring water as an ingredient to its whisky because of its mineral content.

Wartrace, which owns Cascade Spring and which also provides water to Normandy, Beech Grove and Bell Buckle, issued a boil water advisory last month after heavy rains caused surface water to enter the water source, which impacted the quality of the town's supply.

The boil order has since been lifted, but the potential that the problem might reoccur, coupled with new state regulations which would require an expensive filtration system for the spring, led the town to explore options to relying on Cascade Spring.

Gallagher said Tuesday that adding a $3 million filtration system would not have addressed the problem of pressure, which is a common complaint from rural water customers.

To solve the pressure situation, Gallagher stated it would have taken the addition of another storage tank and water pump, at an estimated cost of $1 million.

Taking these actions would have raised water rates by "40 to 50 percent," Gallagher said.

Instead, the cost of running a 12-inch line to the main owned by the Tullahoma Utilities Board would cost $150,000, paid through a grant from Rural Development, which has already been approved.

Wartrace will use Tullahoma as its sole water source on a full-time basis by constructing a water line from Cascade Springs to a TUB water line that is located approximately 4,500 feet away.

Currently, TUB does not have a single customer that uses such a large amount of water, so a new rate was proposed -- $1.70 per thousand gallons. The cost would consist of three components -- the cost of wholesale water to TUB from Duck River Utilities Commission at $1.10, a five cent Duck River Agency water fee, and a 55 cent TUB water distribution fee.

Both TUB and DRUC would ask their respective boards to commit to holding the price firm until July 1, 2010. The rate is not dependent upon Bell Buckle continuing to buy its water from Wartrace. The current cost for Wartrace is $2 per 1,000 gallons, so the TUB deal would result in savings for the town.

DRUC has also offered to conduct Wartrace's water quality testing.

The work is estimated to be completed in either late September or early October.