MECHANICVILLE — The City Council may borrow up to $1.4 million through bonding to repair Mechanicville’s sewer system, but officials said they hope to use grant money or no-interest loans to pay for the project instead.

The state Department of Environmental Conservation has ordered the city to fix its sewer problems by December or face possible fines.

Parts of Mechanicville’s sewer system are over 100 years old. Clogged and leaking pipes have caused sewage to be dumped illegally into the Hudson River in the past.

To repair the problem, workers will install a PVC lining inside the city’s main sewer pipe that will protect it from future leaks.

The main sewer runs from the Mechanicville City School District on Kniskern Avenue to a county pumping station on Larkspur Avenue.

Officials estimate that the project will cost between $1.4 million and $2 million.

“Come hell or high water, we’re going to get this money,” Finance Commissioner Sal Izzo said. “The bond is the last resort, but we are examining every possibility.”

The city has inspected all 1,700 homes within its limits since the DEC mandate to make sure that residents aren’t draining storm water from their basements into the sewer system.

“We’ve seen a reduction in the overflows because the sump pumps are out of the cellars,” Mayor Anthony Sylvester said. “We still have some problems. The pipe is in bad shape.”

The DEC gave the city $600,000 last year to help pay for the project. The original deadline for the city to fix the system was August, but the DEC has agreed to delay that to December so the city can pursue more grants.

“We’re out there reaching for everything we possibly can get,” Sylvester said.

The council unanimously passed a resolution on Wednesday authorizing the bonding limit for the project. City Attorney Val Serbalik said that the resolution was required as part of the DEC consent order.

“It does not commit to the city expending that $1.4 million because we don’t know how much the project is going to cost,” he said. “We don’t know at this point if there’s going to be any grants or no-interest loans yet.”

Accounts Commissioner Mark Seber said that it was too early to tell how a possible bond might affect taxes since the total project cost, the amount of the bond and the interest rate on the bond are still all unknown.

“I think once we find out what the project is going to cost, what the other funding sources are, then we can make a decision,” he said. “When that all shakes out then we’ll determine what local funds we can afford.”

State law regulates how much municipalities can bond based on the community’s total assessed property value.

Izzo said that Mechanicville has $10 million of outstanding bonds that represents 56 percent of the city’s limit by law. That means the city can bond approximately $8 million more.

The city was fined nearly $60,000 last year, but the DEC agreed to reduce that to $12,000, pending repair of the sewer system.

Public Works Commissioner Jack Messore said he expects that the project will be completed by December.