TRACY — The city of Tracy received some substantial good news on Friday — the community will be receiving a total of more than $12 million in financing for ongoing infrastructure work.

“This is fantastic for us,” Tracy City Administrator Kris Ambuehl said. “It’s really going to help our community.”

Replacing aging sewer and water infrastructure in Tracy has an impact that reaches beyond existing utility services, Ambuehl said — it’s an important plus for expanding business or development in town.

“It would allow us to extend our services if we need to,” he said. “Our infrastructure was a limiting factor before.”

An announcement from Brad Finstad, the U.S. Department of Agriculture Rural Development state director for Minnesota, said Tracy is receiving an $8.4 million loan and a $4.5 million grant to replace aging water and sewer infrastructure.

On Friday, Finstad announced a total of nearly $50 million in investments to improve rural water and sewer systems for more than 13,000 Minnesotans.

“Access to modern water infrastructure is essential to the continued prosperity of rural communities,” Finstad said.

The investments are coming through the USDA’s Water and Waste Disposal Loan and Grant program. Friday’s announcement said the program is providing a total of $1.2 billion in financing for more than 200 infrastructure projects in 46 states. The funding can be used for drinking water, stormwater drainage and waste disposal systems for rural communities with 10,000 residents or fewer.

In Tracy, the loan and grant funding will help pay to replace aged and leaking water and sewer infrastructure. Existing city pipes were originally built from clay, and have aged into a brittle state, the USDA’s announcement said.

“The big thing is just the age of the infrastructure,” Ambuehl said. One major problem with Tracy’s wastewater system is water infiltrating into sewer lines. With the age and condition of the lines, he said, “Groundwater seepage will break into the (pipe) joints.”

Ambuehl said the city of Tracy has been working on its water and wastewater infrastructure in phases. The USDA loan and grant will go toward the third phase of the plan, which focuses on piping and street replacements. The first phase of the project included streets on the east side of Tracy, and the second phase focused on replacing the city’s wastewater ponds.

Ambuehl said total costs for all three phases of the plan come to around $38 million.

The USDA’s announcement said Tracy’s ongoing water and sewer infrastructure project will end up replacing around 50 blocks’ worth of pipes, and reconstruct the streets over them.

In order to tear up fewer streets at once, Tracy is breaking up the Phase 3 infrastructure project into parts, Ambuehl said. Phase 3A will replace water and sewer lines and streets on parts of Third Street, Hollett Street, Emory Street, Harvey Street and Rowland Street. A special assessment hearing on the improvement is planned for January 14, Ambuehl said.

Construction on this part of the infrastructure project will hopefully begin in summer, he said.

Ambuehl said the infrastructure projects in Tracy wouldn’t be possible without support from the Water and Waste Disposal Loan and Grant program. He said Tracy applied for financing back in September.

Other area communities and rural water systems will also be receiving funding to improve water and wastewater systems.

Red Rock Rural Water will receive a $1.4 million loan, and the city of Revere will receive a $161,000 loan and a $402,000 grant.

U.S. Rep. Collin Peterson said Friday the USDA grant and loan funding had an important impact for smaller Minnesota communities.

“Upgrading and investing in local water systems creates jobs while keeping communities healthy,” Peterson said. “These funds are critical to meeting our rural communities’ water treatment needs.”