Town officials are racing against the clock in hopes of capturing up to $1.5 million in stimulus dollars for the Zionsville Road sewer project.

The estimated $4.5 million project has long been in the works and will provide a new sanitary sewer line from Ind. 334 to near I-865 along Zionsville Road and beyond, as well as a pressure line along the old 106th Street from Zionsville Road to Bennett Parkway. Town Manager Ed Mitro said the $1.5 million would be in the form of a forgivable loan.

The state had $94 million worth of stimulus funds earmarked for wastewater projects, but because of tight deadlines, Zionsville didn’t think it would be eligible for much, if any, of the money.

Due to other projects coming in under budget or failing to materialize, the state has up to $1.5 million left in the fund. In order to be eligible for that remaining money, Zionsville would need to have all design work and financing in place by the end of the year.

The Town Council approved the preliminary engineering report Monday.

According to the town’s stimulus application, the project would be a major catalyst to spur development in Zionsville’s economic redevelopment district. The town earlier spent more than $10 million to reroute 106th Street through the vacant Dow property, where it hopes a commercial development corridor will develop.

Scott Miller, of the financial adviser Umbaugh, believes sewer rates wouldn’t go up because of the project. Money generated from a tax increment financing district will pay off the bonds. Mitro estimates the tax district raises about $1 million a year in revenue.

“The people benefitting from the project will essentially be paying for the improvements,” Mitro said.

With $500,000 of cash on hand earmarked for the project, the remaining money would be raised through the sale of 30-year bonds, with a potential interest rate of 2.81 percent. The bonds will be discussed and likely approved at a special meeting of the Town Council Nov. 16. The bond closing would likely be Dec. 28, barely making the year-end deadline.