NEWPORT — The town’s 1,200 sewer customers have been hit with another in a series of rate increases necessary to pay for a portion of $33 million in federally mandated upgrades to the wastewater treatment plant off of North Main Street.

Voters have approved two bonds to support the project: a $10 million bond at Town Meeting in 2023 and another $4 million bond in September.

The bond repayments are borne 100% by the users of the system, while about $19 million of the upgrades, which will bring the plant into federal compliance for discharge of phosphorous and nitrogen, are to be paid for with state and federal grants.

The Selectboard approved a 25% increase in the rate to $20.09 per 1,000 gallons on Nov. 18. The increase will bring the flat rate cost of sewer for a household with four people to about $442 per billing period. For property owners with water and sewer, the bills will be based on the water use as measured by the meter. Sewer only users, who do not have meters, pay the flat rate depending on the number of people in the household, said Paul Brown, who recently retired as finance director but continues to consult for the town part-time.

The increase will take effect with the first bill of 2025, which will be sent in April and reflect usage for the four months ending in mid-March. Newport has three billing periods each year, said Brown.

This year’s increase follows last year’s 25% hike. Three additional annual increases of 25%, 20% and 20% are projected to bring the rate to $36 per 1,000, but Brown said those estimates could change and they have not yet been approved.

The sewer rate increases will have an adverse effect on the development plans of Avanru Development, Jack Franks, the company’s president and CEO, said Tuesday. Avanru earlier this year completed construction of 42 low-income rental units on Spring Street that are now 100% rented.

The sewer rate increases could result in higher rents on Spring Street at some point because the developers included the town’s water and sewer fees into their costs when the project was conceived a few years ago, Franks said.

“It is going to impact the current property (Spring Street) we have there now in a negative way and will impact any decision from future development,” Franks said.

His company, based in Walpole, N.H., also has an approved site plan to build 96 senior housing units on North Main Street next to the airport and the proposal will continue, he said.

Changes in the way the town handles wastewater have been in the works for more than a decade.

About 12 years ago, the town signed a contract for phosphorous removal under the Environmental Protection Agency guidelines at the time. The installed filters were faulty and never worked properly. The town took the engineering firm to court and won a $3.4 million settlement but that money had to be returned to the state which partially funded the project.

Even if the project in 2012 functioned to meet EPA standards at the time, more upgrades would be mandated because effluent levels for discharge into the Sugar River have become more stringent for not only phosphorous and nitrogen but also ammonia and metals, Brown said.

The plant improvements are scheduled to start next month and be completed by January 2027, Brown said.

The rate increases will also provide the sewer department with sufficient working capital for emergencies. Brown said the minimum recommended for working capital is six months of operating expenses, debt service and 5% of revenues.

The minimum would be about $600,000 in 2025 and increase annually to $1.7 million in 2034, according to a chart Brown presented at the Selectboard meeting last week.

In late October, failure of the blowers that power the aeration system at the wastewater lagoons resulted in untreated wastewater at the plant for a couple of weeks.

A strong odor in the area forced the nearby middle high school to close for a day in early November.

The odor outside the school dissipated after about a day, Superintendent of Schools Donna Magoon said Tuesday. Inside, school staff undertook extensive cleaning, “which helped clear out the smell in most areas,” Magoon said in an email. They also “aired it out.”

After the malfunction, the plant moved to a backup blower, Arnold Greenleaf, the plant’s superintendent, told the Valley News at the time. That also failed and they had to scramble to find parts. In total, the aeration system, which breaks down the waste and is supposed to operate around the clock, was working off and on for about two weeks.

Messages left for Greenleaf were not returned by deadline Tuesday.

Patrick O’Grady can be reached at pogclmt@gmail.com.