The Northwest Indiana Regional Development Authority has approved a $6 million grant that could have 8,000 homeowners ripping up their flood insurance by 2010.

At its regular meeting in Indianapolis on Tuesday, the RDA approved the grant for the Little Calumet River Basin Commission, which is providing the local share of funds for the $200 million project.

Work could begin by fall on the last two segments of the massive project, according to Dan Gardner, Little Calumet River Basin Commission executive director. Those involve the construction of levies and other flood control measures from Northcote Avenue in Hammond to the Illinois border at Munster's western edge.

The project to control funding along a 22-mile stretch of the river began in 1980 and has proceeded by fits and starts until recent years. It appeared the project might yet take another six years. The Indiana General Assembly generally has funded the local share of it in $2 million installments every two years.

But in September, Gov. Mitch Daniels and U.S. Rep. Pete Visclosky, D-Ind., sent a joint request to the RDA to provide the $6 million local share needed to complete the project.

That $6 million will allow tens of millions of dollars in federal funds to be spent on the project, which is being done under the supervision of the U.S. Army Corps of Engineers.

The Corps plans to let the final contracts for the projects by this fall, Gardner said. That means work could wrap up by the end of 2009 and the federal government could proceed to take the area out of the flood zone.

Currently, people living in the flood zone and businesses there must purchase federally backed flood insurance. That insurance can cost more than $1,000 per year for some homeowners.

"You have people in that flood plain and economic development opportunities around Cabela's and the former River Park Apartments," said RDA executive director Tim Sanders. "It will be good for the city when this is done and the sooner the better."

The Little Calumet River Basin Commission let the RDA know it could need up to $7 million, but agreed to come back with a further request if more money is needed, Sanders said.

The money was granted to the commission with the understanding that state Sen. Frank Mrvan, D-Hammond, and others would push the Indiana General Assembly to continue with its two-year appropriations for the project so the RDA can be repaid, Sanders said.