Warsaw is changing course on a costly state-mandated water project, shifting from figuring out how to pay for the upgrade to exploring whether they can avoid it altogether.

Town staff has been searching for ways to finance a replacement well required by the Virginia Department of Environmental Quality (DEQ). The Town has long argued the project is unnecessary but still must comply with the mandate.

The project would be paid through the Town’s Enterprise Fund, which is supported by water and utility revenues rather than the general operating budget. For smaller localities like Warsaw, that funding structure makes major infrastructure projects like this difficult to absorb. So, the town has been looking for assistance and exploring funding options, including potentially borrowing money.

Last summer, Warsaw pinned hopes on a new state funding program that could have significantly reduced the financial burden. Staff applied for a grant through the Virginia Department of Health’s Financial and Construction Assistance Program (FCAP), a statewide initiative designed to help localities upgrade water infrastructure. If approved, Warsaw could have received $1.46 million—covering 75% of the project’s cost—with the remaining 25% financed through the program at an interest rate one percent below the market rate. At the time, staff was optimistic.

But despite the town’s efforts grant funding hasn’t materialized.

During a Feb. 12 council discussion, assistant town manager Missy Coates confirmed Warsaw has snot received any grants. But the staff is now exploring whether they might qualify for an exemption from the state requirement.

Coates said they raised the issue while attending Local Government Day at the Capitol and discussed the situation with aides to state Sen ator Richard Stuart and are looking to apply for an exemption.

She said based on the fact that Warsaw’s well is in good standing, they believe they have a good chance at qualifying for the exemption. Town staffers also believe the backing of Stuart and Delegate Hillary Pugh Kent will help them succeed.

However, Coates said they will continue exploring funding options in case the exemption effort is unsuccessful.