OLD LYME — The Board of Selectmen voted Monday to call a Dec. 16 referendum to extend the budget for installing sewers in the town’s beach communities, but the proposal came with a warning that the town’s taxpayers could be on the hook for a significant portion of the costs.
It’s a message that’s largely at odds with how most believed the costs would be shared — or not — between property owners in Soundview and Area B, the three private beach associations involved, and the rest of the town.
The reason? A reading of state statute 7-249, which caps the costs for property owners to no more than the increase in property values from installing sewers.
Selectman Jim Lampos, a Sound View resident and a critic of the plan, sounded the alarm.
“What I want to make clear to the voters in town is that if this gets approved, they could very well have to pay, by virtue of state statute, part of the cost of this project,” Lampos told CT Examiner after Monday’s meeting. “I think they’re not aware of it. They’ve been told that they don’t have to pay anything.”
All property owners in Old Lyme — beach residents and not — will be eligible to vote in the upcoming referendum to extend the project’s budget.
Two appraisers hired by the town in 2020—Nadeau Associates and Kerin & Fazio—estimated that residential property values could increase between 7% and 10% with sewers, while commercial properties would see a jump between 10% and 15%.
Based on the highest estimated increase in values and the latest cost estimates, CT Examiner calculated that 90% of the properties could exceed the statutory caps — leaving the town on the hook for about about $4.6 million in project costs.
Lampos made clear those costs were theoretical, and he couldn’t anticipate how the real estate market would behave.
“Could be that, could be more,” Lampos said. “But the town can’t be comfortable with the notion that they would pay zero.”
The town, he said, would need to create an appeals process to provide an administrative avenue for resolving complaints rather than pushing residents into the courts.
Mary Daley, a longtime critic of the plan but a recent addition to the Town Water Pollution Control Authority, offered her own calculations on the cap overflow.
CT Examiner, using a similar but independent methodology, arrived at substantially similar results with updated appraisal data.
“As we have noticed lately, the housing market is cooling. Property owners in Sound View/Area B may be wise therefore to commission second appraisals on their own if and when this project is implemented,” Daley said. “If sewers MUST be implemented, under the protection of statute 7-249, it must be a fair deal.”
The $4.6 million — as estimated — would amount to a cost burden of about $230,000 per year, including finance costs, and would need to be divided among all taxpayers.
Based on the 2025 grand list, that would translate to about $9.20 per $100,000 of appraised value, or roughly $46 each year for the owner of a $500,000 home.
A new budget
The sewer project — intended to resolve the high density of houses and septic systems along the shoreline — has been pushed by the Connecticut Department of Energy and Environmental Protection but is opposed by many residents who say it is neither affordable nor necessary.
DEEP has offered to cover part of the cost through with Clean Water Funds. The latest offer includes a 25% grant on the total project and an additional $15 million in forgivable loans for shared infrastructure.
The project would install sewers in Sound View and Area B—two neighborhoods that are directly part of the town and where there are about 210 properties—and the three private beach associations: Old Lyme Shores, Old Colony and Miami Beach.
The proposed referendum would be to approve $20,528,486 in borrowing — still higher than what WPCA Chair Steve Cinami anticipated at last week’s meeting.
Lampos said in an email to CT Examiner that the difference stemmed from the inclusion of connection fees for East Lyme and New London in the assessment, as well as short-term construction interest that hadn’t been factored into Cinami’s estimate.
While the inclusion of connection fees doesn’t change the estimated $3,100 annual cost per EDU—a calculation used to assign each sewered property a share of the total project cost—it could impact the total assessment amount considered when evaluating whether it exceeds the statutory maximum.
The state would pay approximately $9.3 million and property owners $11.2 million of the total cost. But if Lampos’s scenario materializes, Sound View residents would pay 60% of the total, with the remaining 40% distributed among all taxpayers.
Dennis Melluzzo, one of the project’s most vocal opponents, a WPCA member and Sound View homeowner, voiced his frustration on Monday with the decision to move to a referendum.
“The problem is that the rest of the town doesn’t know they’re still on the hook. They were told they’re not going to pay for it,” Melluzzo said. He added that he believed the town would end up paying more in court costs. “I can guarantee you there are more people in Soundview who would love to go to court and make the town pay for it. I’m telling you, it was a dumb move.”
Concerns and support
During the meeting, residents voiced opinions ranging from concern about costs to complaints that the December referendum would be held when many residents are out of state, to arguments about the project’s benefits.
Liz Fowler, who lives on Lyme Street, expressed the concern that the project could burden taxpayers beyond the beach area.
“The cost looks like it’s already doubled since 2019 and it’s still not clear to me as a voter and taxpayer what the ultimate cost would be and what the thinking is about taking a private property improvement and spreading it to the entire tax base,” Fowler said.
Mike Riggio, a resident of Old Lyme Shores, supported moving forward with the referendum.
“I think this is kind of an epic moment for the town of Old Lyme. I want to say that these communities along with the Soundview area will deteriorate,” Riggio said. “I think that the approval of the sewer project will bring vitality to that area. I think that should be your concern to all our citizens of Old Lyme.”
Selectman John Mesham favored calling a referendum.
“I think when we have a meeting like this, it tends to bring out the opposition. I think there are also people in favor of this,” Mesham said. “I think that has been evidenced by the votes in the associations that are involved in this. I’ve said all along that I think we should move this to a referendum.”
Mesham said there was a “big stick and a big carrot”—the state funds—and said he didn’t want the town to lose that carrot.
First Selectwoman Martha Shoemaker underscored that the project was designed before the three sitting selectmen entered politics. She also suggested that it was unfair that all town residents could vote on the issue, including homeowners in private beach associations who already voted for their own projects, but said those were the rules.
“There is a difference between us withholding the referendum or the town people voting it down,” Shoemaker said. “The message if we withhold is you’re not playing by the rules in this municipality. If the townspeople voted it down, then it’s a different ball game.”
Shoemaker also underscored the unknowns, including whether Miami Beach would join the project or drop out.
Miami Beach held a referendum the previous weekend that ended with an uncertain result. The most-voted option was to kill the sewer project, but two other options favoring sewers tallied more combined votes —with or without stormwater drainage. The beach association is debating how to resolve the matter and is expected to hold a new vote.
Shoemaker said that the amount authorized wouldn’t cover the cost if Miami Beach withdrew, requiring another referendum.
“I agree that although there are a lot of things in here I don’t like, I think to get the funding, it has to go through,” Shoemaker said.
But it was Lampos who took center stage on Monday, and highlighted what he called the largest project in town history at a cost of $85 million for 600 homes.
Lampos questioned the process and the role of DEEP.
“The fact that DEEP is speaking to us through a private attorney, the fact that DEEP has been speaking to us in the press with belligerence and arrogance has made me question their motivation,” said Lampos. “I don’t feel like they’re a partner. I feel like they’re an overlord.”
But Lampos also agreed that there was no alternative to calling a referendum.
“It’s definitely breaking the town’s word that we’re in this project if we don’t let this go to referendum,” Lampos said.
He also noted that the three prerequisites he had outlined in October before a referendum could be called had been met, including a written sewer ordinance, a signed cost-sharing agreement and cost estimates they considered reliable enough.
When it came time to vote, Mesham and Shoemaker voted first. Lampos, pausing and covering his face, weighed the moment.
“It’s symbolic at this point,” Lampos said. “But I would aye.”
On Monday, the Board of Finance also met and voted to move forward with the referendum. The next step is a town meeting on Dec. 9, which would adjourn to a referendum a week later.