MADISON — Members of the Board of Selectmen expressed concerns Thursday night with a proposed $3.2 million water line replacement project in the Anson-Madison Water District.

The proposal is being considered at the same time that Madison Paper Industries, a major employer and taxpayer in the area, has issued a temporary production curtailment that some officials think could be a sign that the paper mill in the future will be unable to contribute as much to town revenue and utility costs as it has in the past.

“We have to be sensitive to the fact that we’ve pounded taxpayers incredibly (in the last few years),” Jack Ducharme, vice chairman of the selectmen, said during a meeting with the water district board Thursday night. “Even a small increase in water costs will be significant for some people. We have to be sensitive to that.”

The water district, which primarily serves users in Anson and Madison as well as a smaller number in Embden, is proposing the replacement of a 4-mile stretch of water line that is more than 60 years old. The project would be paid for with funding from the U.S. Department of Agriculture Rural Development program, including an $800,000 grant and a $2.4 million loan including interest.

But officials Thursday night also said the project wouldn’t stop there and that sometime in the next 20 years, it also will be necessary to replace the remainder of the 11-mile main water transmission line that brings water from Hancock Pond in Embden to downtown Anson.

Randy Turner, chairman of the water district board of trustees, and Mike Corson, the district superintendent, said the current proposed project as well as other improvements down the road cannot be done without a rate increase, although how much that rate increase would be has not yet been determined.

Users currently pay $72.55 per quarter for 1,200 cubic feet of water, the average amount used by a two-person household, according to Corson. After that, the cost of water is $2.17 per 100 cubic feet of water.

The terms of the USDA loan are such that payments would not have to be made until up to one year after completion of construction.

Ducharme and Madison Selectman Paul Fortin questioned whether the project could be done without a rate increase and asked the district to come up with a 20-year financial plan that would include contributions from Madison Paper and the cost of the project without revenue from the mill. Madison Paper now provides about 10 percent of the water district’s revenue.

“It would be nice if we could see a spreadsheet outlining from now until when the project is done showing what rates will be with and without Madison Paper,” Fortin said. “If that mill should shut down, what would the financials of this plan look like?”

In addition to the debt the water district would take on with the transmission line replacement, the district already has $5.3 million in outstanding debt.

Turner said that cost is primarily from recent water line replacements on smaller streets in Anson and Madison, as well as from the construction of the water treatment facility in Embden in the 1990s.

Still, he said water users in Anson and Madison both saw savings on their water rates in 2011 when the two towns consolidated water districts, and a rate increase probably would bring them back near what they paid previously, when the two towns operated separate water districts.

“We are always concerned about Madison Paper and our ratepayers,” Turner said, though he added, “We are going to have to have a rate increase.”

Rachel Ohm — 612-2368

rohm@centralmaine.com

Twitter: @rachel_ohm

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