RANDOLPH -- Residents at their annual town meeting Wednesday agreed to borrow $417,000 and accept a $333,000 grant to fix the town's waste-water system.

The town has been offered $333,000 in grants and $417,000 in federal loans for the project from the U.S. Department of Agriculture's Rural Utilities Service.

Robert Foster, a resident, wanted to know what the impact would be on his taxes.

According to Paul Halle, who serves on the Sewer Committee, repayment of the loan would come from sewer bills -- not taxes. He said sewer bills will go up about $2.70 a month.

"Ninety-eight percent of the community will be paying the bill," Halle said. "Our current pump station is better than 20 years old and has some issues. If we don't address this problem, there is the potential for some fines."

Peter Hanley, chairman of the Board of Selectmen, said the town faces heavy fines from the U.S. Environmental Protection Agency if it doesn't stop untreated sewage from flowing into the Kennebec River during heavy rain or melting snow.

Residents gave permission for Aubrey Strause, project engineer with AECOM Water in South Portland -- hired by the town as the design engineer for the project -- to speak at the meeting.

She said the project also will take care of an operator safety issue. The pumps proposed in this design will allow the pump station operator to access the pumps at ground level for maintenance and repairs.

Halle said the entrance to the pit is considered a hazardous confined space and requires additional assistance when the operator goes down into the wet well. A rescue unit has to be on standby to meet specifications and the town could be liable if something went wrong.

"That's very time consuming and costly," Strause said.

In other business Wednesday, after a lengthy debate, residents decided to go with the Budget Committee's recommendation for contract services -- nearly $10,000 less than what selectmen proposed.

Contractual services include the cost for hydrants, tax assessing, insurance, snow plowing, ambulance service, legal costs and dispatching.

"Some of these figures might change, but not by much," Selectman Ed Gorham said. "The significant part of that money is dispatch."

Dispatch services for emergency response went up from $16,675 last year to $24,671.

At the end of the meeting, townspeople debated whether to increase the $299,628.50 property tax levy limit the state established for the town. That ultimately was passed by secret ballot on a 23-19 vote.

Treasurer Janet Richards said the reductions voters made to the budget earlier in the evening reduced the tax levy limit increase by approximately $16,500.

If the budget had passed as proposed by selectmen, the increase would have been around $27,000, she said.

"This is because we were only able to take out $300,000 from our General Fund," Richards said. "That's why selectmen asked to go up to $27,000."

In the past, she said the town has used $350,000 from the General Fund to offset taxes, but state revenue sharing was less this year.

With the increase in sewer bills and a reduction in state revenue, a few residents at the meeting, including Budget Committee members, thought selectmen should have tried harder to reduce spending.

"We asked selectmen about this increase with the water-water expense, your bills are going to go up, and the way the economy is, and they said, 'We're happy with what we did,'" Budget Committee member Marge Gilman said.

Mechele Cooper -- 623-3811, ext. 408

mcooper@centralmaine.com