(Marguerite Lanthier/Daily News photo) Water service line replacements have begun in Iron Mountain starting on East Grand Boulevard and moving south. Ultra Construction Services of Marquette is the contractor for the $4.6 million project that will replace roughly 375 lines containing lead over the next two years.

IRON MOUNTAIN — About $20 million in water and sewer work could be in Iron Mountain’s future, likely requiring a customer rate increase to help accomplish it.

The city has received word that a proposed $13.3 million water project can be funded through Michigan’s Drinking Water State Revolving Fund. The aid consists of a $2.6 million grant and a $10.64 million low-interest loan, council members learned Monday.

The DWSRF assistance is for water mains and service lines, but City Manager Jordan Stanchina said it wouldn’t make sense to ignore 100-year-old sewer lines in the same areas. The cost of that work is roughly $6 million and talks will be held with USDA Rural Development to see if a loan can be secured, he said.

Efforts to get sewer assistance through the state’s Clean Water State Revolving Fund have been unsuccessful and city officials had hoped for a larger water grant. Nonetheless, there may never be a better offer, Stanchina said.

Only the sewer portion would require a significant rate increase, as the city has an existing water bond that will be paid off in 2027. With that $305,000 annual payment erased, the city could initiate new borrowing for the $10.64 million DWSRF loan without having to adjust customer charges, Stanchina explained. Loan terms would be 2% interest up to 40 years.

The Michigan Department of Environment, Great Lakes, and Energy will release a final plan for the DWSRF project in October, at which time the council will decide whether to accept or reject it.

No grant dollars are available through Rural Development, so work on the sewer side would have to be funded through whatever loan terms the federal agency might offer. “We’ll talk about that when we get there,” Stanchina told the council Monday of the need for a sewer rate increase.

Although Iron Mountain’s water and sewer charges have gone up in recent budgets, they remain on the lower end in the Upper Peninsula, according to a 2022 state survey.

In addition to the possible $20 million project under review, other work is planned or occurring.

About 375 lead service lines will be replaced at Iron Mountain homes over the next two years by Ultra Construction Services of Marquette through a $4.57 million project that’s already begun.

Changes to the Michigan Safe Drinking Water Act approved in 2018 require the city to replace all galvanized water services that are considered lead lines within the next 18 years. It’s hoped this project will address about a quarter of the lines needing replacement.

Funding is from the DWSRF, consisting of a loan of $2.33 million at 2% interest, plus a $2.24 million grant.

This summer, the city sent letters to 800 homeowners seeking easements for the project — mostly on the east and north sides. Work has started on East Grand Boulevard and will proceed south, Stanchina said Monday. Coleman Engineering Co. of Iron Mountain is the project supervisor.

On Monday, Coleman was named engineer for a $596,000 project that will help the city identify service lines containing lead as it prepares to replace them. It’s funded through a Technical, Managerial and Financial Support for Lead Service Line Replacement grant administered by EGLE, with no match required.

The grant will enable a contractor to conduct field verification for about 785 service lines. These tests will be done where lead is suspected but not confirmed or where the service line material is unknown but likely contains lead, Stanchina said. The survey is to be completed by the end of 2026. Coleman’s engineering fees — up to $85,340 — are covered by the grant.

In all, about 800 of the city’s lead service lines could be replaced through the project that is underway and the more extensive project under review, Stanchina estimated.

West Hughitt and West A streets are among the potential areas of focus in the proposed $20 million water and sewer project, along with South Kimberly Avenue and portions of Lake, Forest, Adams, East E, East B, East C, Norway, Sixth and Seventh streets.

Jim Anderson can be reached at 906-774-3500 ext. 226 or janderson@ironmountaindailynews.com.