IRON MOUNTAIN — Engineering for $19.3 million in planned Iron Mountain water and sewer improvements will carry a $2.17 million price tag under a proposal the city council approved Monday.

Most of the work awarded to Coleman Engineering of Iron Mountain is for designing and bidding a $13.3 million project to replace water mains and about 400 lead service lines. The fee on a time and materials basis is not to exceed $1.496 million.

The sewer portion is less straightforward, as financing must still be pursued for an estimated $6 million project. The engineering fee approved is not to exceed $674,000, of which $229,000 would be for naught if the city is unable to fund the sewer portion at the same time as the water project, City Manager Jordan Stanchina said.

“Funding may not be known until spring,” he explained. “But if it’s not designed now, there’s no chance the sewer work could occur with the water project.”

The water portion is funded through a $10.64 million loan at 2% interest from Michigan’s Drinking Water State Revolving Fund, plus a $2.666 million grant from the same source. The work chiefly involves water main and service line replacements in the areas of West A, West Hughitt and East C streets.

The city wants to replace sewer infrastructure while the streets are torn up for the water project and Stanchina also warned some of the 100-year-old lines are vulnerable to collapse. Financing for the $6 million sewer portion might come from a low-interest USDA Rural Development loan, or possibly higher-cost commercial lending.

As officials continue to explore a Rural Development application, the council agreed to order engineering for a coinciding sewer project. Under terms of the DWSRF financing administered through the Michigan Department of Environment, Great Lakes and Energy, the water project could be done on its own, but that’s not the course the city will chart.

The sewer portion will likely require a customer rate hike, Stanchina acknowledged. Despite increases in recent years, the city’s utility charges have remained on the lower end in the Upper Peninsula, he added.

Scott Nowack, project manager for Coleman, said the entire project may take up to three years to complete with construction starting in the fall of 2025 or the spring of 2026.

It would include reconstruction of 10,500 feet of gravity sanitary sewer and 13,050 feet of water main; 426 lead water service replacements; and associated road restoration.

The council Monday also stated its intention to apply for a 2026 DWSRF lead service line replacement project at an estimated cost of $5.6 million. This would include replacing 400 service lines and looping a water main on Quinnesec Street from Fourth to Fifth street, Stanchina said.

In connection with that, the city plans to reapply for $16.5 million in Clean Water State Revolving Loan Fund assistance, an effort that has failed in the past three rounds.

Stanchina pointed out that 2026 is the final year for Bipartisan Infrastructure Law funding, a federal allocation that has markedly lifted the amount of assistance offered through EGLE.

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

If a 2026 project is funded, the city would be well on its way to replacing most of the lead service lines in need of replacement, Stanchina said. The total has been estimated at 1,800, or possibly less.