The Kemp City Council approved a plan Jan. 10 to seek a U.S. Department of Agriculture grant to build a new water plant estimated to cost about $1.5 million.

The council also approved an interlocal agreement with the City of Mabank to purchase water from the neighboring town during the start up of the new plant and at other times when Kemp water resources run low.

The council's action followed West Cedar Creek Mud Utility cutting off water to the city Dec. 20 after it sent a letter to Kemp officials demanding changes to the three-year-old agreement to provide fresh water and wastewater services to the small town of less than 1,000.

Mayor Laura Hanna Peace said the agreement contains a provision for either party to end the agreement after "notice and mediation." Peace declined to comment on why WCCMUD cut off the water. "You will have to ask them that," she said. Peace confirmed the city and utility had "issues" throughout the active term of the agreement.

WCCMUD officials referred questions about the recent developments to their attorney, Chad Rook. He did not return a call seeking comment about the council's actions, but he previously said in a telephone interview that the utility would be willing to negotiate with city officials.

Kemp officials plan to meet with engineers Jan. 24 to develop plans for the new water plant. The council approved contracts with Alan Plummer Associates and the Heritage Institute of Sustainability in connection with the city's plans.

Kemp began producing fresh water for residents at the old plant in late December, and it will continue to operate until the new plant is built. The construction is expected to take about three months after work begins.

Kemp began seeking new sources of water after the 2011 drought left the city without water. Bottled drinking water was trucked into town and distributed to residents on Main Street.