DIXFIELD — Selectmen on Monday discussed their options for a $1.8 million upgrade to water, sewer and drainage systems on six streets in light of the fact that it did not get a $500,000 grant for it.

Interim Town Manager Eugene Skibitsky said at the annual town meeting April 24 that the town was denied the Community Development Block Grant it applied for in March. That would have provided $500,000 toward the project.

The project, designed by A.E. Hodsdon Engineers of Waterville, would replace old, galvanized pipes that are in danger of breaking. The money would pay for water and sewer line replacements, road reconstruction, engineering and design costs, transaction costs and other expenses for High, Pine, North, Kidder and Ellis streets and Dix Avenue.

Skibitsky said at Monday’s meeting that the town would move forward with the project since voters gave selectmen authority to borrow money when they approved the project last July.

However, Selectman Hart Daley said the town “should probably hold subsequent public hearings to discuss the future of the project,” due to the loss of the CDBG.

“Rather than jamming this project down the throats of our residents, we should call for some sort of public hearing and let them know where the project stands,” Daley said. “I think a lot of residents were under the assumption that we were definitely going to get this grant.”

Selectman Dana Whittemore said he’s not sure if residents would have voted to approve the project if they knew they weren’t getting the grant.

“I need to know what you want to do, because I’ll need to make a lot of phone calls really fast if you decide to not go with this,” Skibitsky said.

He said the $1 million bond the town applied for “sold for around 3.3 or 3.4 percent,” and the payback over 20 years on $1 million would be “around $60,000 a year, over 20 years.”

“I’m not really prepared to answer that question, so don’t hold me to it,” Skibitsky clarified. “I don’t have the information in front of me. It could actually be more like $65,000.”

Skibitsky said the plan would be for the town to budget $150,000 a year into the roads reserve account, use $60,000 of it to pay for the bond and use the remaining $90,000 to use toward other projects that the town would need to do over the years.

Whittemore asked if taxpayers would see an increase in taxes.

“As long as you hold to the fact that you’ll be putting $150,000 a year into road reserves, with some of it going toward debt service and some of it going toward your current projects, there shouldn’t be a tax increase,” Skibitsky said.

Selectman Bob Withrow said he saw the road project as “getting something done that’s been festering for a long time.”

“We’ve got old roads and old systems,” Withrow said. “We’ve got to do it sometime.”

Skibitsky agreed. “We’re not any different than other towns. Other towns are borrowing money and doing projects while it’s still cheap. We’re just taking that first step that we’ve never taken before. We’re doing a big project,” he said.

Daley said he’s interested in why Dixfield did not receive the grant and wanted Skibitsky to find out.

“We went through the whole survey process, met all of the requirements, but out of nine applications, we were one of the four who didn’t receive the grant,” Daley said. “I’d like to know why that happened.”

The requirements for the CDBG included a door-to-door survey to ensure that at least 51 percent of the residents in the construction area are low to moderate income.

Skibitsky said the town met those requirements after adding Kidder and Ellis streets and Dix Avenue into the project.

Withrow added that when the Board of Selectmen originally began planning for the project, Kidder and Ellis streets and Dix Avenue were not among the streets that would be worked on.

“We surveyed High Street, and that street by itself did not meet the 51 percent requirement,” Withrow said. “Once we added Kidder, Ellis and Dix onto the project, we were able to meet the requirement.”

Chairman Mac Gill asked Water District Superintendent Jim White if the town could reapply for the CDBG in 2015.

“The CDBG is very tough to get,” White said. “You’ve got to really cry a sorry story to get it. You can apply again the following year, but you won’t be able to use the money for the same project.”

Resident Sonya Fuller warned selectmen that if they decide to move forward with the project and attempt to reapply for the CDBG next year, they may not meet the requirements for the grant.

Selectman Scott Belskis suggested that the town move forward with upgrading High and Pine streets and postpone work on Kidder and Ellis streets and Dix Avenue so that when they reapply for CDBG in 2015, they will still be able to meet the requirements.

“It’s a Catch-22,” Belskis said, “because we want to take care of the worst of our roads, but we’d be finishing the roads that would qualify us for the grant in the first place.”

Skibitsky said he would call engineer Al Hodsdon so the town could “figure out what streets we need to tinker with to meet the CDBG requirements.”

Other funding for the project includes a $110,000 loan from the Clean Water State Revolving Fund, a $676,000 loan from the Drinking Water State Revolving Fund, and a $500,000 general obligation bond.

mdaigle@sunjournal.com