WINDHAM – A referendum on the proposed sewer system in Windham is less than eight months away, and town councilors are concerned that little progress has been made in determining the scope of the project and who would pay for it.

The multimillion-dollar project, which would pipe wastewater from North Windham and Windham Center, is set to go before voters in November. With that date bearing down, the Town Council on Tuesday night set a special meeting next week to discuss matter.

Councilors will devote the entire meeting to the sewer and allow public comment. A date hadn’t been set by press time, although councilors were discussing Thursday, March 22, as a possibility.

At Tuesday’s meeting, Barry Sheff, a senior project manager with Woodard & Curran, based in Portland, delivered an update to councilors on progress made so far in determining the cost impact and benefits a sewer system would provide. The project has been languishing in the background for several months, and little headway was made Tuesday night. The most notable development was that the council, primarily spurred by comments by Councilor Kevin Call, agreed to get more serious about the project.

“I think we’re under the gun time-wise here, with the election coming,” Call said. “We need to step up the plate, make some comments, make some tough decisions that we’re scared to make so [Sheff] can go back and have some sort of focus.”

While some residents question the need of a sewer system at all, perhaps the biggest issue with the sewer is who will pay for it. Sheff was asked to find potential donors, and told the council Tuesday night that, in effect, the days of federal or state funding for wastewater conveyance systems are over. At best, the town could secure low-interest loans, he said.

Users, both residential and commercial, and tax increment financing from future business development in North Windham – made available by the removal of existing septic systems – likely would be the primary source of funding for the system, at least eventually, he said. But, Sheff said, there may not be enough users at the outset to cover the estimated $1.92 million in annual costs, since hooking up to the system may be voluntary. The annual cost, Sheff said, includes debt service at 2.5 percent, operating, maintenance and administration costs.

“This is where the hard work starts,” Sheff said. “The hard work is, what’s the funding mechanism?”

As a result of those revenue pressures, the system has already been reduced in scope. While the project was once going to capture much of Windham’s wastewater production, it has now been curtailed to a “spine” network. However, the cost of a minimized system is great, and could be about $37.8 million, not including debt service, Sheff said.

Even though Sheff, town staff and councilors have a long way to go to determine actual costs and the project’s scope, costs took center stage Tuesday night. Some unusually frank discussion took place, commencing with Call, who was first to broach the elephant in the room: Windham taxpayers footing the bill for a system they don’t use.

“Nobody wants to say it’s going to be a tax-based revenue source, but I’m afraid it is,” Call said, with council Chairman Scott Hayman responding, “Some of it is.”

“It’s going to be people who live where I live who are never going to have sewer that are going to see their taxes go up,” Call continued. “That’s the only way we’re ever going to see sewer in this town.”

Town Manager Tony Plante reminded councilors that the underlying problem, and reason for a sewer, is groundwater contamination in the North Windham aquifer, one of the largest aquifers in Maine, some of which lies directly beneath the commercial strip. Plante said the town has been documenting the nitrate levels in the aquifer for almost two decades, and the data show a declining trend in water quality caused by rising nitrates, and that the November election provides a good chance to gauge the public’s support of a sewer system.

“We’re still talking about a problem that isn’t going away on its own,” Plante said. “We still have some work to do, but November 2012 is coming. The election is less than eight months away and it’s the best opportunity we’re going to have for four years to get a clear picture of the sentiment of Windham voters.”

During public comment, one resident rose to support any efforts to improve water quality in the delicate North Windham aquifer, which is also tied into Sebago Lake, the drinking water source for greater Portland. Most residents challenged the proposal.

Former Councilor Robert Muir questioned why the council didn’t seek a third party to review the finding of Robert Gerber, the hydrogeologist who drilled test wells to measure groundwater quality in North Windham over a period of about 16 years. Gerber addressed the council two years ago, concluding that water quality is on a definite downward slide.

“When you go out and buy a truck or something else, you look around to get other opinions,” Muir said. “I can’t understand why you want to do something like this, spend this kind of money, without having that engineering study reviewed by an independent third party … it’s inconceivable.”

Plante said corroborating water quality data at this point would be difficult since the test well records were conducted during the last 15 or 16 years. He said evidence of declining trends are visible in charts available on the town’s website, www.windhamweb.com.

Both Muir and Planning Board Chairman Jim Hanscom said during public comment there may be “hot spots” of pollution in certain areas of town, such as the Basin Road area, that are causing the most pollution, which could be dealt with without introducing a vast and costly system throughout town.

“I get information from people that say that all the big users aren’t the ones causing the problem,” Hanscom said. “It’s not Lowe’s. It’s not Home Depot. It’s not Shaw’s. They all have engineered systems that were put in years ago. The ones causing the problem are the ones on Basin Road, that’s what I was told.”

With councilors eyeing wastewater-producing businesses as a prime revenue source, Hanscom said Windham leaders should first determine from where the contamination is flowing.

“If it’s not coming from the businesses, the businesses are going to balk at this,” he said. “If it’s coming from the residents, then [the residents] need to do something, not the whole town. We don’t need to put a whole septic infrastructure in for 300 people that are contaminating the aquifer.”