Michigan forgives $20 million in loans to Flint

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LANSING (WJRT) (11/16/2017) - Flint water users will no longer be on the hook for $20 million worth of loans from the state of Michigan.

State Treasurer Nick Khouri announced Thursday that loans to the city of Flint through the Drinking Water Revolving Fund have been forgiven effective immediately.

The decision was included in the federal 2017 Consolidated Appropriations Act and was directed by the Michigan Department of Environmental Quality, which manages the Drinking Water Revolving Fund.

“I am pleased to support the forgiveness of these loans as provided under federal law,” Khouri said. “This action provides financial relief to the city as it continues down its path toward fiscal stability and recovery.”

Flint took out the four Drinking Water Revolving Fund loans between 1999 and 2003 to pay for upgrades and improvements to the city's water treatment plant.

The plant was blamed for not properly treating the city's drinking water when it switched to pumping from the Flint River in 2014 and ending the flow of Lake Huron water from the Great Lakes Water Authority in Detroit.

The river water was too corrosive and ate away protective linings on lead-based water pipes, allowing the metal to leach into the water. That created the ongoing water emergency.

“This loan forgiveness will help provide some financial relief and stability for the city of Flint,” said C. Heidi Grether, director of the Michigan Department of Environmental Quality. “The department will continue to coordinate with the city to address critical water and infrastructure needs.”

The Drinking Water Revolving Fund is a federal financial assistance program to help water systems and states to achieve the health protection in accordance to the Safe Drinking Water Act. The program is a partnership between the EPA and states.

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