ELLSWORTH, Maine — City councilors on Monday awarded a nearly $14 million contract to the Penta Corp. for construction of a new wastewater treatment plant.

The $13,975,500 contract is for construction of the plant off Bayside Road and two alternate projects for clarifier covers and work at the new pump station, which is located near the existing treatment plant.

The city, which is now under a consent decree from the Maine Department of Environmental Protection to replace the existing plant, has been working for several years to develop the plans and find funding for the project.

Work has been completed on installation of new sewer lines from the existing plant to the site of the new plant and on construction of part of the access road from Bayside Road to the site.

According to Brent Bridges, senior vice president at Woodard and Curran, who has been working with the city on the project, the contractor expects to begin work on the site in January.

“They feel they can get a lot done clearing the site while the ground is hard,” Bridges said. “Then they can really get going in the spring.”

The contractor will need to build another 300 feet of access road to the site in addition to the buildings for the treatment plant. Construction is expected to be completed by the end of 2012, and the plant should be up and running by March 2013.

The city has tapped several funding sources for the project, but City Manager Michelle Beal told councilors on Monday that the contract cost more than had been budgeted.

“We are going to need more funding,” she said.

Beal said she and city Finance Director Tammy Mote were reviewing additional funding options and would present a borrowing proposal to the council at a later date.

Councilors also began discussion Monday of a potential rate increase for sewer users, with the funds to be used to help pay for the new plant. Mote proposed increasing the base rate from $4.16 per 100 cubic feet to $8.23 per 100 cubic feet. The increase would be phased in over a five-year period. Under that plan, she said, the first increase would bump the cost up by $1.63 to $5.79 per 100 cubic feet and stay there for two years. The council could review the rates at that point, and evaluate the costs and revenues from the new plant’s operations to see whether and how much of an additional increase was needed.

The initial rate increase would result in a jump in payment for average residential use from $70.72 a quarter to $98.43 a quarter.

The proposal led to lively discussion among councilors.

Newly elected Councilor Michael Boucher objected to increasing the user rates.

“User fees are another form of tax, “ he said. “I don’t want to increase anything in this economic climate.”

Other councilors argued that the costs involved in building the new treatment plant had to be paid for somehow.

Councilor John Phillips said the options facing the city were not to build the plant, to fund construction through user fees or to increase the property tax for everyone in the city.

“We have to replace the plant,” he said. “The users can pay for it or we can tax everyone else in the city to cover it. That’s the choices. The users pay for it or everyone else pays for it.”

Councilor Pam Perkins noted that residents who have private septic systems also incur costs of installing, operating and maintaining the systems. Those costs increase over time as well, she said.

Councilor Stephen Beathem suggested a lower initial increase of just $1.45 per 100 cubic feet, which would make the increase $24.65 per quarter for the average user and keep it under $100 a year.

“I think we need to squeeze it down a little,” he said.

Most of the other councilors favored that approach in a straw poll. The council will review a revised proposal at its next meeting in December. Council Chairman Gary Fortier asked Mote to notify the approximately 1,500 users of the sewage system of the council’s plans to discuss the rate increase.