The intersection of First and Division streets in Ishpeming is pictured prior to paving First Street. Water infrastructure was replaced in the area as part of the city’s ongoing $10.7 million water U.S. Department of Agriculture project. The Ishpeming City Council Wednesday approved a plan to seek additional USDA funding for the replacement of infrastructure on Division Street/Business M-28 from Pine Street to Seventh Street. (Journal photo by Lisa Bowers)

ISHPEMING — Ishpeming city officials are exploring funding options for the replacement of water and sewer infrastructure beneath Division Street/Business M-28.

The Ishpeming City Council voted unanimously at a special meeting Wednesday to allow city staff and GEI Consultants to apply for additional money through the U.S. Department of Agriculture-Rural Development.

The proposed project would replace water and sanitary sewer mains on Business M-28 from Pine Street to Seventh Street.

The city had originally approached the USDA about substituting the stretch of M-28 for several other smaller areas already included in its current $10.7 million water project, when the department offered additional funding as a second option.

According to a Tuesday memo from GEI Consultants Project Manager Mark Stoor to council members, the city would need to complete all the necessary steps prior to Oct. 1 in order to obtain the additional funding.

“If we are interested, we would need to move on it right away, as they are attempting to use funds remaining this fiscal year and would need time to process,” the memo states.

The move is preliminary, as the amount of funding USDA would provide is not known, but the anticipated cost of the project is estimated at $730,000, City Manager Mark Slown said in a phone interview Wednesday.

“The main thing that was driving this, we had known about this street and we knew we did not have enough money to do the street properly when we were putting together the water project two to three years ago,” Slown said. “We started hearing that (the Michigan Department of Transportation) will be funding the resurfacing of M-28, and we are trying to be as fiscally prudent as possible. It is important to get the infrastructure done before they start tearing up the road.”

MDOT Communications Representative Dan Weingarten confirmed the milling-and-resurfacing project on Business M-28 from the intersection of U.S. 41 in Negaunee to U.S. 41 in Ishpeming is slated for 2019.

“We are aware of the city’s desire to coordinate water work with the resurfacing project and will work with them on this,” Weingarten said today in an email. “We would try to schedule their work first so the final paving wouldn’t have to be redone.”

The funding for the current USDA project, which is slated to replace 30 to 40 percent of the city’s existing water infrastructure, consists of a 40-year $8.98 millon low-interest water supply system revenue bond and a $3 million grant.

The additional work would be funded in a similar fashion, if approved by the USDA and the council, Stoor’s memo states.

“This would again be a combination of grant and loan, and would require another closing,” Stoor said.

He said the additional cost of the project is not expected to increase the bills of water customers because a five-year deficit elimination plan for the city’s water fund implemented in 2017 is expected to be sufficient to cover the additional loan.

Slown said city officials are hoping the USDA will provide a larger percentage of grant funding for the additional work, which would extend the timeline of the project into 2019.

The city council will make the ultimate decision on whether to pursue the additional funding once the information is collected.

“We will probably be bringing it back to them at the next council meeting, whatever we can come up with,” Slown said. “It is a large amount of work, but we are taking it one step at a time and being cautious.”