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Lansing — The state of Michigan is preparing a package of grants and loans to help Flint finance the construction of a new 5.5-mile pipeline that federal regulators are insisting on to test the city’s new Lake Huron water source.

The U.S. Environmental Protection Agency is requiring Flint to build a parallel pipeline to test Lake Huron water from the new Karegnondi Water Authority pipeline while the city continues to get its water from Detroit’s water system, which also comes from Lake Huron.

But the EPA’s order comes with a price tag of up to $7.2 million — a cost not originally envisioned by Flint or the KWA before the city’s temporary use of river water caused lead to leach from aging residential pipelines.

The Michigan Department of Environmental Quality has identified $4.2 million in grants Flint can qualify for to cover 58 percent of the cost, according to the Michigan Economic Development Corp.

The Michigan Strategic Fund is preparing to loan Flint the remaining $3 million, MEDC CEO and President Steve Arwood said Tuesday.

The Strategic Fund board could be asked as soon as next month to approve the loan, Arwood said.

“We can do it very quickly out of the resources that we have,” Arwood said. “And we typically have the flexibility to do it in a way that fits the situation here.”

The EPA could require Flint to test raw water from KWA with a secondary pipeline for “three months or longer” before allowing the city to switch from Metro Detroit’s Great Lakes Water Authority, according to an MEDC memo distributed Tuesday to Michigan Strategic Fund board members.

Flint Mayor Karen Weaver and Gov. Rick Snyder announced last month the city will remain on the KWA system after switching back to Detroit’s system in October following the discovery of high levels of lead in Flnt’s water and the blood of residents.

Genesee County previously agreed to pay for engineering work for the new section of test pipe.

The pipeline projects faces a number of hurdles, including gaining rights-of-way access to cross the Flint River and a CSX railway crossing, according to the MEDC memo.

clivengood@detroitnews.com

(517) 371-3661

Twitter: @ChadLivengood

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