NEWPORT – Newport water officials were stumped in mid-October when only three residents turned out to discuss the water district’s planned debt service expansion.

They were unable to get a sense of whether the residents failed to show up because they were satisfied with the district’s plans or because they overwhelmingly disapproved of them.

In referendum voting earlier this month, the district got its answer loud and clear: Voters defeated the request to increase the district’s debt limit from the current $3.5 million to $8 million.

The vote has put the Newport Water District in an unenviable position: The voters rejected increasing the debt, but the federal government is demanding upgrades to the water filtration system.

“We’re not doing this because we want to,” Thomas Todd, district superintendent, explained recently. “It’s because we have to.”

Todd said the district will bring the issue back for another vote in the spring.

The Newport Water District has been under a consent order since early 2006 from the U.S. Environmental Protection Agency to further filter its water. It also launched an aggressive search for an alternative water source to Nokomis Pond.

But failing to find another suitable source, the district plans to add a second filtration system to its slow-sand facility at Nokomis Pond and is assessing the merits of two possible systems.

To pay for the improvements, however, Todd said recently, the district will need to raise its debt limit. The concept that voters possibly misunderstood is that much of the cost of the planned improvements could be covered by state and federal grants, but the law requires the debt limit be raised high enough to cover those grants.

For example, if the debt incurred by the upgrades not covered by grants is only $1 million, the district still would have to receive voter permission to raise the limit to $8.5 million, which is the estimated cost of all the upgrades.

The financial details are:

. The district has annual income of about $500,000.

. The district costs about $187,000 annually to run.

. The annual debt is $155,000, which will be paid off in 11 years.

. Until a second filtration system is selected, the district cannot predict how much rates will increase.

Todd said that by spring, the district should have a solid comparison of the two systems being considered and will make a decision about which one to select.

“Once decided, it could take 12 to 18 months to construct the addition,” Todd said. “By October 2008-2009, we must be in construction.”

The search for cleaner water began in 2004 when Newport failed to meet federal water testing guidelines. Todd explained at the time that under those guidelines, one person in 10,000 has a 2 percent chance of getting cancer from Newport’s water in its current state, but only by drinking 3 liters a day for 70 years.

Todd will meet with Newport selectmen on Dec. 5 to develop a strategy, which will include greater public education about the position the district is in.