Norwich - Upgrading the city's aging sewage treatment plant was projected at $96 million Tuesday, with the city's share of the cost at $24 million and outlying towns using the system expected to pay $4.4 million each, engineers and project financial officials told the Sewer Authority Tuesday.

Norwich Public Utilities is under a state order to upgrade the sewage treatment system, which project design engineer Tim DuPuis said already is beyond its life expectancy. The project would improve treatment technology, add sewage capacity and eliminate the longstanding problem of stormwater overflows into the system during heavy rain.

NPU officials have been working on designs and cost estimates for the upgrade for the past several years and already have completed portions of an upgrade at the sewage treatment plant on Hollyhock Island.

But following efforts to downsize the project or find a new, cheaper location for the sewage treatment plant, engineers concluded the plant should remain on Falls Avenue and the project would cost $96 million. About 23 percent, or $22 million, would be covered by Clean Water Act grants.

The remaining $74 million would have to be financed and paid for by a combination of Norwich taxpayers, sewer ratepayers and surrounding towns that use the city's system.

The $24 million city share - including residents and businesses not tied into the sewer system - would be in addition to amounts sewer ratepayers would absorb through increased sewer rates over a 20-year period.

The city's portion would cover mainly the cost of treating stormwater that runs through the sewer system from streets throughout the city, overwhelms the system and causes pollution to spill into the Thames River and Long Island Sound.

The taxpayer share is estimated to cost 0.62 mills per year, with the average homeowner paying $65 to $109 per year. The money would be needed starting in about five years, when debt service from the project would start, NPU officials said.

Bob Lamb, of Lamont Financial Services Corp., said the entire project should be eligible for low-interest, 2 percent, 20-year loans through the Clean Water Act.

NPU General Manager John Bilda said NPU has 20 years to complete the project once the plans are approved. NPU officials will continue to work on the design and will report back to the Sewer Authority on their progress.

Contributions from the surrounding towns that tie into the city's system would lower the Norwich sewer ratepayer portion of the project, Bilda said. He said if no towns contribute, city ratepayers could be expected to pay an additional 38 percent rate increase to cover costs of the project. But that is unlikely, Bilda said, with several towns, including Franklin, expressing interest in joining the sewer system for future economic development opportunities.

After the presentation, Aldermen Mark Bettencourt and Charles Jaskiewicz said the presentation and costs were not surprising, given that NPU officials have been under orders to upgrade the plant for several years. Bettencourt said paying for the upgrade through a combination of taxes and rates is "probably the fairest way to go," especially with the taxpayer portion covering stormwater treatment costs, which are citywide.

c.bessette@theday.com