Walhalla has entered a new phase of its project to replace aging utility lines in a residential section that sprung up around a textile plant. And the city is about to send off an application for a Community Block Grant. The official hearing, for anyone to review what’s involved, takes place at 10 tomorrow morning at City Hall. Dirk Reis of the Appalachian Council of Governments is assisting the city in applying for a grant of around $400 thousand. Unlike previous water and sewer line replacement inside the Chicopee Mill Village, phase two of the project will involve water lines only, he said.