The town of Camden will pay upfront for Rockport's $1.2 million share of a $15 million  wastewater treatment plant upgrade, while recouping the funds from Rockport through quarterly payments.

The town of Rockport has communicated it cannot finance its 12% share of the cost for the Camden wastewater treatment plant, Town Manager Audra Caler told Select Board members Feb. 9.

Rockport's payment was expected by the federal agency loaning Camden $13.9 million for the work, Caler said.

The U.S. Department of Agriculture Rural Development office has informed Camden either it or Rockport must commit in writing to the additional $1.2 million in funding, or the cost of the plant upgrade has to be reduced.

"Rockport will still be responsible for paying their $1.2 million share of the upgrades," Caler said in a Feb. 16 email.  "Instead of paying for this cost upfront they will pay on a quarterly basis, over the life of the financing period for this project, when they are billed by Camden." The financing period is 28 years.

An email from Rockport's Finance Director Megan Brackett states the town was surprised in a recent meeting by the expectation that it would seek financing for its share of Camden's sewer plant upgrade.

Securing a bond to finance $1.2 million would require voter approval, she explained.

"The earliest we would be able to get voter approval for this project would be June of 2021, and it is very possible that this vote would get turned down by the voters of Rockport," she wrote.

Brackett states that Rockport's contract with Camden for its use of the treatment system, outlines that it will pay a portion of Camden's annual debt payment. This can be budgeted as an annual expense and approved by the the town's wastewater commissioners.

Caler asked the board to approve the use of  funds currently in wastewater treatment plant reserves and to borrow $250,000 from surplus, to cover the payment owed by Rockport.

Coming up with a solution was urgent to retain the bid price for the construction of the plant that came back 14% below budget, Caler said Feb. 16. Camden could try financing Rockport's share through Rural Development, but the time it would take to do that could jeopardize the existing bond agreement, she said. She advised against cutting pump stations upgrades from the project, to lower costs. The force main from Sea Street cannot be cut from the plan, she said.

Wastewater Superintendent Dave Bolstridge asked $40,000 be left in capital reserves to cover any equipment failures or emergency repairs.

Board members unanimously approved the request.

The decision needed to be made without expectation Rockport would come through with its share of costs, according to Board Vice Chair Alison McKellar.

Rockport is currently looking for relief with high sewer bills. Rockport staff are scouring Camden's wastewater budget to see if there are costs unrelated to the service it receives. Rockport is also discussing building its own wastewater treatment plants.

Rockport has public water and sewer facilities, but does not have its own wastewater treatment plant. A portion of the town's wastewater flows to Camden for treatment, while another portion flows to Rockland.

In 2019, the town of Rockport pumped 30 million gallons of wastewater to Camden's plant; 29.6 million gallons in 2018; 28.8 million gallons in 2017; 26.6 million gallons in 2016; and 24.6 million gallons in 2015.

It is unclear how Rockport's $1.1 million commitment to the plant upgrade fell through the cracks. McKellar recalls a joint meeting regarding the treatment plant upgrade with the boards of both towns. At that meeting, Rockport had a different town manager and board members than it has now.

Rockport and Camden town managers and Select Boards toured Camden's wastewater treatment plant in October 2017. At a joint board meeting in November 2017, engineers from Wright-Pierce Environmental in Topsham recommended replacing all of the remaining original equipment at the plant, which dates back to the 1970s.

In March 2018, the Camden Select Board held a public hearing seeking comments on its plan to borrow $13.9 million dollars to upgrade the wastewater treatment plant, Washington Street and Norumbega Drive pump stations and replace the force sewer main from the Sea Street pump station. Voters approved the plant upgrade at June town meeting.

In May 2019, Select Board members approved a change in the way wastewater rates are calculated to include capital costs for the treatment plant. Prior to the approval, capital improvements were paid by all taxpayers, and not folded into user rates.

The rate increase is phased in based on a unit of 100 cubic feet, from $6.23 in 2020, to $9.29 in 2026.

Approval of the increase came at a time when Caler reported that the cost of the wastewater plant upgrade had escalated to $15 million, while voters had approved $13.9 million. Rural Development agreed to award Camden a grant of up to $1 million as long as the town changed its sewer rate calculation method to include payments for capital improvements. Camden's public wastewater system has about 1,860 users.