The water is not contaminated now, but the project is necessary as a precautionary measure, Baldwin and Knipe said.
Expansion is also imminent because of the area's rapid development, Baldwin said.
"We're going to take care of any potential contamination problems with state-of-the-art filtration plants with adequate supply for growth," Baldwin said.
Chester Engineers, a Gaithersburg, Md.-based firm, will release the results of a nine-month study at Wednesday's meeting.
The company is recommending the multimillion-dollar renovation and upgrading, which will include two water filtration plants.
The water isn't filtrated now, Knipe said. It is chlorinated, fluoridated and pumped to the distribution facilities.
The project also includes a new 1.5 million-gallon elevated water storage tank at West Steven Street.
The current tank stores 100,000 gallons, Baldwin said.
"With the town growing as it has over the years, we need additional storage there," Knipe said.
The state offers a 20-year loan program at 3 percent interest for drinking water upgrades, Baldwin said. The city also will look at grant options.
Baldwin said customers can expect an increase in water rates, although it's too soon to say how much the rates will go up.
The council will discuss the water treatment options Wednesday and is expected to vote on whether to begin the project at Thursday's meeting.
If approved, the design phase could be complete by late this year or early next year, and built by late 1999 or early 2000.