The 114-year-old dam that secures Gloucester's largest single drinking water source will be getting some significant shoring up thanks to a $1 million financial package the city has been awarded by the state.

The Massachusetts Office of Energy and Environmental Affairs has proffered a $500,000 grant and a $500,000 low-interest loan extension for Gloucester as part of a $10 million allocation to 16 communities and conservation organizations across the state.

The Gloucester money is coming from the state's Dam and Seawall Repair or Removal Fund and Gov. Charlie Baker's annual capital budget, according to the announcement from the environmental affairs office. It will be used by the city to launch a needed $6 million rehabilitation of West Gloucester's Haskell Dam, city Public Works Director Mike Hale said Thursday.

The primarily earthen dam, which dates to 1902 and is supported by a concrete core wall and spillway, is one of the most important cogs in Gloucester's water system, Hale said.

"This is a critical piece of infrastructure that we cannot allow to fail, and cannot do without," he said.

The dam, located at the end of Forest Lane and just north of Route 128, holds water within Haskell Reservoir and keeps it from escaping down Walker Creek and out into Essex Bay. The reservoir supplies more than a third of the city's drinking water.

The dam's location also allows the city to pump water under Route 128 and to a point on Mount Ann where gravity draws it down to flow into and replenish Dykes Reservoir, Hale said.

"Because of that, and the way we are able to manage our water sources," Hale said, "we have not been nearly in the drought conditions that other communities faced this summer."

The Haskell and Dykes reservoirs comprise the western side of the city's water system, while Babson, Goose Cove and Klondike reservoirs — when Klondike is used —  operate in the east side. The city switches twice a year between drawing off its eastern and western water facilities, and will be shifting from west to east in the coming days, Hale said.

The state funding for the Haskell Dam project still leaves "a significant gap" between the money on hand and the $6 million estimated cost of the needed repairs, Hale said. The city has already spent another $175,000 state grant on design study for the work.

The latest grant will allow the city to at least start the work, he said.

"We will probably have to pick up much of the rest of the cost ourselves," Hale said of the city. "It's time to get this done, and the longer we wait, the more costly it's likely to get."

From the state's perspective, the money is aimed at helping cities and towns restore dams and seawalls that have been battered, and hardly ever fully maintained.

“These funds provide cities and towns with the resources they need to protect their citizens, valuable infrastructure, and the environment from extreme weather events,” Lt. Gov. Karyn Polito said in a prepared statement. “We are committed to working with municipalities to repair or remove damaged seawalls and dams that present a real threat to residents and small businesses in communities across the state."

Hale said that, while Haskell is in one of Gloucester's more sparsely populated areas, the dam is classified by the state as a "high-hazard dam" — not because it is seen as imminently hazardous, but because it would impact residences and other property if it ever were to fail. He also said it is considered in generally "poor" condition, largely because of its age and capacity to withstand potential shifts in the earth and string of major storms.

"The components of this dam are past their usual life expectancy," he said, noting the last major restoration work on the dam dates to the 1930s.

"With that much time comes a risk of failure," he said, "and that is something we cannot have happen."

Staff writer Ray Lamont can be reached at 978-675-2705, or via email at rlamont@gloucestertimes.com.

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