More Than $160 Million in Loans Awarded for Infrastructure Projects

Contact: Sonya Butler, Drinking Water and Municipal Assistance Division, butlers2@michigan.gov, 517-284-4533
Agency: Environmental Quality

October 16, 2017

LANSING, MICH. The Michigan Department of Environmental Quality (MDEQ) is providing more than $160 million in loans to fund municipal water and sewer projects to improve water quality and public health. The loans include $46.7 million in principal loan forgiveness for employing green practices or for meeting affordability criteria.

The Governor’s 21st Century Infrastructure Commission has reported that there is an $800 million annual gap in funding water-related infrastructure needs. The Clean Water State Revolving Fund (SRF) is an opportunity to help narrow that gap by providing low-interest loan financing for necessary wastewater and stormwater improvements.

With interest rates below those otherwise available on the open market, and principal loan forgiveness opportunities, funding infrastructure projects through state-administered loan programs allows the communities to pass the savings along to their system customer base.

Communities receiving assistance are:

  • Clinton River Water Resource Recovery Facility Drainage District - $31.9 million with $2.5 million in principal loan forgiveness funds improvements at the Auburn Wastewater Treatment Plant for biosolids management upgrades to address capacity limits in the anaerobic digesters, replace equipment nearing the end of its useful design life, and a new septage receiving facility for biogas recovery/reuse.
  • East Lansing - $31 million with $1.5 million in principal loan forgiveness funds the second phase of wastewater treatment plant and collection system improvements to reduce surcharging and overflow events to the Red Cedar River and improve the primary treatment process.
  • Great Lakes Water Authority - $38.45 million partially finances modifications of the Rouge River Outfall to achieve complete disinfection of all wet-weather flows from the Water Resource Recovery Facility, formerly known as the Wastewater Treatment Plant, located in the City of Detroit.
  • Huron River Green Infrastructure Drainage District - $355,000 with $50,000 in principal loan forgiveness funds the latest portion of the multi-year tree planting program in the city of Ann Arbor to reduce nonpoint source pollution and help the Middle Huron River watershed meet its total maximum daily load restriction for phosphorus, total suspended solids and bacterial contamination.
  • Kinross Township - $3.94 million with $500,000 in principal loan forgiveness funds improvements to the wastewater treatment plant for a cogeneration system, which is anticipated to reduce energy consumption at the plant.
  • Otsego - $1.5 million with $175,000 in principal loan forgiveness funds upgrades at the wastewater treatment plant to replace the deteriorating or failing sludge handling and phosphorus removal systems and raw sewage pumps intended to increase treatment reliability and prevent overflows to the Kalamazoo River.
  • Rochester - $3.78 million funds the repair of structural deficiencies in the city’s sanitary sewer system and reduces excessive inflow and infiltration through source removal to prevent potential surcharging and basement backups.
  • St. Joseph - $1.21 million funds the first of two projects intended to greatly reduce the discharge of combined sewer overflows to the St. Joseph River and Morrison Channel, and ultimately Lake Michigan, in accordance with the MDEQ permit requirements.

The Drinking Water Revolving Fund (DWRF) provides low-interest loan financing for necessary public drinking water facility improvements. Communities receiving assistance are:

  • Great Lakes Water Authority - $8.68 million with $2 million in principal loan forgiveness funds the replacement of aged water main pipes in residential areas of West Detroit where pipe breaks have been frequent.
  • Southgate - $3.66 million funds water main rehabilitation with the associated replacement of gate valves and fire hydrants, as well as re-establishing service connections to advance water quality and reliability goals.

The federal Water Infrastructure Improvements for the Nation Act (WIIN) was established in 2016. It authorizes a supplemental capitalization grant with local match requirements to any state that the president has declared an emergency relating to public health threats. These must be associated with the presence of lead or other contaminants in drinking water provided by a public water system.

Currently Michigan is the only state in the nation eligible to receive WIIN funds and has provided one, zero interest loan with 100 percent principal forgiveness to the City of Flint. 

  • Flint - $40 million to replace and restore up to 6,000 water service lines constructed of lead and galvanized pipe with new copper pipe and covers the hydrovac testing of approximately 4,500 water service lines. This assistance will take the city one step closer toward the goal of removing all lead material from the water distribution system to protect the public health of people within the city.

The SRF was established in 1988 and has since provided low-interest loans totaling $4.8 billion. The DWRF was established in 1997 and has since provided low-interest loans totaling $949 million. A portion of the SRF and DWRF is provided by the U.S. Environmental Protection Agency through capitalization grants. The DEQ is currently reviewing opportunities to improve the SRF and DWRF, based on the recommendations of the 21st Century Infrastructure Commission to enhance opportunities for communities to access capital funds necessary to improve Michigan’s water-related infrastructure. The DEQ has been engaging in stakeholder feedback to determine improvements to the program and hopes to advance conversations in the coming months on an improved and reimagined program to meet the needs of Michigan’s 21st century infrastructure.

For more information on the SRF and DWRF loan programs visit, www.michigan.gov/cleanwaterrevolvingfund or www.michigan.gov/drinkingwaterrevolvingfund. For more information on Michigan WIIN funding in fiscal year 2017 visit, www.michigan.gov/documents/deq/deq-ess-mfs-DWRF-DWsiup2017_552217_7.pdf.

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