She said the new tank will be built in the same area, and will help the town keep pace with development.
The town talked for a while about expanding its storage capacity, but "really got determined" in the last four years, Myers said.
ARRO Consulting of Hagerstown is working with the town, she said.
USDA's Rural Development said in a press release that the town's loan has an interest rate of 4.125 percent. The town must repay the money over 40 years.
Williamsport's $15,000 grant will go toward a sewer-system study that's under way. The town will pay the other $25,000, said Marlene B. Elliott, Rural Development's director in Maryland.
In the town, the USDA press release says, "pipes are collapsing, revealing cracks and root intrusion which cause an inflow and infiltration problem.
"During wet weather months, the town's bills triple compared to normal billing months; the system is absorbing large amounts of ground water that is being treated by the county's wastewater treatment plant."
Clay P. Riley, a project engineer with Thrasher Engineering of Clarksburg, W.Va., said his company has been examining the system with a closed-circuit TV camera and through smoke tests and flow monitoring.
Councilman Earle R. Pereschuk Sr., who oversees the town's water and sewer operations, has said the project was estimated more than a year ago to cost $5 million.
The town is getting $400,000 for the project from the Maryland Department of the Environment, Mayor James G. McCleaf II said.
USDA representatives stopped in Williamsport, then Smithsburg, on Friday for ceremonial-check presentations. They were joined by U.S. Rep. Roscoe Bartlett, R-6th; Maryland state Sen. Donald F. Munson, R-Washington; and staff members representing Maryland's two U.S. senators.