SALEM — City Utilities Commission members learned more details Friday about proposed Phase 3 improvements to the wastewater treatment plant, including a breakdown of the $16.9 million price tag for construction and engineering.

The next step is prioritizing what has to be done, what’s important to get done and what can wait, along with finding money sources to pay the cost over time which will definitely include an increase in sewer rates, according to commission members.

“The current revenue is not going to be able to pay for it,” Commission Chairman Bob Hodgson said.

How big of a rate increase will be necessary isn’t known at this point, with a rate study already in the works. Sewer rates for customers were last increased in 1995, 25 years ago. Much of the equipment to be replaced through the Phase 3 project is 30 to 35 years old.

Bob Schreiner of the Burgess & Niple engineering firm outlined the recommended plan for Phase 3 improvements and the cost attached to each. Those improvements included: sludge handling and dewatering, $3,620,000; trickling filter renovations, $2,770,000; converting sludge treatment to all anaerobic, $3,520,000; installing the PONDUS system for enhancing disgestion of sludge and increase gas production, $2,470,000; installing combined heat and power units, $1,260,00; and upgrading main electrical gear and replacing the standby generator, $650,000. All of that totals $14.29 million. The engineering costs, including the bidding process, was estimated at $2.65 million, bringing the total to $16,940,000.

Sludge is the biosolids or residual material left over after treatment of wastewater.

The project cost could be reduced if some of the improvements are taken out. Schreiner explained that the dewatering building for sludge will save money in the long run by reducing the need for a contract for sludge removal. Both the trickling filters and digester renovations used in the treatment process have to be done as needed maintenance due to the aging equipment. He said the combined heat and power units aren’t needed but would be best for utilizing excess waste gas to generate heat and power, which could reduce power costs. The PONDUS system is also optional, but would help in the sludge digestion process. In the long term, he said both systems could pay dividends.

The $16.94 million project has been submitted to the Department of Environmental and Financial Assistance for a low interest loan. Schreiner said if accepted, the loan amount can go up or down if the scope of work changes. The current borrowing rate is 0.53 percent for a 20-year loan and 0.68 percent for a 30-year loan. He said final approval is based on the rate structure in place to pay the loan back.

For a 20-year loan for the $16.94 million, the annual payment required would total an estimated $936,630, he calculated. In his report, he included a sewer rate analysis graph which showed even an increased sewer rate would remain less than the state average for sewer rates.

“You have room to grow in rates,” he said.

Payments for the loan would not begin until construction is complete, giving the commission time to work on the rates. Other grant possibilities will be explored also.

The report included some additional options to consider, such as a sludge dryer that carries a cost of $2.47 million and could improve the quality of the sludge, making it easy to dispose and ease restrictions on where and how it can be disposed.

Other options outlined possibly for a Phase 4 project included a turbo blower to increase efficiency, phosphorus monitoring, UV disinfection, tertiary filters and new flow equalization.

The commission meets again at 1 p.m. Thursday, this time with Alfred Benesch Engineering to review the study of the city water treatment plant/water distribution system.

The regular meeting will follow at 4 p.m. Thursday, with both meetings in city council chambers.