MONTEAGLE, Tenn. -- Monteagle officials say dye tests from May show wastewater that has been bypassed into Juanita Creek flows west, the expected direction, but it also flows east toward Layne's Cove.

The Tennessee Department of Environment and Conservation ordered dye tests in the wake of a massive sewage spill after the collapse of a storage tank at the city's Plant No. 1 in March. Officials also are using dye to track wastewater flow from ongoing problems with the town's aging sewer system that force the plant to bypass partially treated municipal wastewater into Juanita Creek in times of heavy rain.

TDEC officials say as much as 1 million gallons of wastewater a day is bypassed during heavy rain.

The first round of tests confirmed that Juanita Creek flows into Gilliam Creek and eventually into the Elk River, west of Monteagle, but tests now will focus to the east at Trussell Creek, too, Monteagle officials said.

Monteagle Vice Mayor Dean Lay said the easterly flow requires more tests to see where dye flows in the Layne's Cove area.

"To my knowledge, we're addressing all their (TDEC's) concerns," Mr. Lay said. "We are aggressively trying to remedy the situation by getting the wastewater treatment plant ready to bid."

The city is waiting for state approval for a revolving loan to pay for the plant, he said. The new plant could cost more than $8 million.

"We think we'll be getting that document in the next 30 to 45 days," he said.

The sewer plant project could go out for bids before the end of summer, and construction might start before the end of the year, he said.

Mr. Lay said the city still might not meet TDEC's 2009 deadline to replace the plant.

TDEC spokeswoman Tisha Calabrese-Benton said the city has complied with requirements, but the problems can be solved only with a new plant.

People living in Layne's Cove either are on municipal water or are supplied bottled water by Monteagle, Ms. Calabrese-Benton said. Meanwhile, testing will continue, she said.