The development of two new municipal wells in Cloverdale could be expedited thanks to, of all things, beer.

To help secure more water for its Cloverdale facility, Bear Republic Brewing Co. and the city have struck a tentative deal that will speed up development of the wells.

Details are still being finalized, but city officials said Bear Republic would pay in advance for the water it needs to expand beer production, enabling the city to bring more wells into production sooner.

"The public-private partnership will allow them to pay impact fees forward. Payment will be used to connect to new wells we have started exploratory drilling on this week," said City Manager Paul Cayler.

City officials expect that new wells near the Russian River not only will provide more water for Bear Republic but also for current and future customers of the city utility.

During heat spells, Cloverdale's wells have been unable to keep up with demand to serve the population of more than 8,600 people. The city has kept the water taps from running dry by relying on conservation efforts and reservoirs. But the reservoirs run the risk of being depleted during an extended heat wave. Officials also want to keep the supply intact in case of large fires.

Cloverdale's precarious water situation improved last month with a fifth municipal well that went on line and boosted city supplies by 15 percent.

Cloverdale also wants two more wells, but financing through low-interest federal loans isn't immediately available and likely would take at least a year to obtain, according to city officials. There are funds to bore the wells, but the $460,000 cost to hook both up to the water plant are not immediately available.

That's where Bear Republic can speed up the process.

The brewery would pay for a sizeable share, if not the full portion, of the connection costs of the wells to the city's water treatment plant, said City Manager Cayler.

"We've calculated what we think their impact fees will be," he said, adding that the company would pay for underground piping and electrical controls to bring water into the treatment plant.

"We're hoping development of the wells will service Bear Republic, as well as some other economic development," Cayler said.

The brewing company wants to more than triple the production at its Cloverdale facility. Brewmaster Richard Norgrove Jr. said that the brewery is capped at around 65,000 barrels of beer a year, or slightly more than 2 million gallons.

If he can get sufficient water, Norgrove said he would like to expand to around 200,000 barrels, or 6.2 million gallons of beer.

His father, company chief executive Richard Norgrove Sr., said Thursday his son's estimates are conservative because demand appears to be even greater.

"Every drop of beer I can make is probably sold before I can make the darn stuff," said Richard Norgrove Sr.

He said the craft beer business continues to grow. Bear Republic is riding the popularity crest with its flagship, top selling brand, "Racer 5."

The Cloverdale facility employs about 125 people and is currently entitled to 8 million gallons of water annually.

"The City of Cloverdale wants Bear Republic to stay here. We view them as a key anchor industry. Micro beers and breweries are an important part of economic development," Cayler said.

Even at the accelerated pace, Norgrove Sr. anticipates it will be nearly a year before the additional water, raw materials and equipment needed to expand will be in place.

City officials said there are potentially other projects that could benefit from an expanded water supply, including an assisted living facility that was planned near Foothill Boulevard and Treadway Drive. It had entitlements to go forward at one time, but those expired in 2008.

City Councilwoman Carol Russell said water availability "has concerned us for a very long time. It's tied to quality of life and economic development."

"We want to make sure we have adequate resources in place for our current residents and to bring in new and expanded business to our community so we can provide jobs and other services for our residents," said Mayor Joe Palla.

This summer, customers reduced their overall water use by about 5 percent compared to the same period in 2012, according to Public Works Director Craig Scott. officials acknowledged that a 55 percent water rate hike that went into effect earlier this year undoubtedly cut consumption too. But the system was still having trouble keeping up and the city had to dip at times into its 4 million gallon reserve.

"All summer long we were having difficulty in topping off our reserves until (the new) well came along," Scott said.

Meanwhile, the city is planning $4 million in upgrades to its system using U.S. Department of Agriculture loans. The work, expected to begin late next year, includes treatment plant improvements, new transmission pipelines, a new storage tank and tank re-coating.

Staff Writer Sean Scully contributed to this story. You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com.