NEW GLOUCESTER – A two-hour public hearing Tuesday on establishing a water district for Upper Gloucester village drew questions on costs, administration and options.

The public hearing, attended by about 40 people, paved the way for a vote Jan. 25 by those in the proposed district. Polls will be open from noon to 7 p.m. at the town hall.

Residents were told that enabling legislation at the State House passed committee review unanimously Tuesday. It goes to the House of Representative and Senate for final approvals. Once the legislative approvals are granted the bill will go to Gov. Paul LePage for signing.

Residents learned that the project cost to address petroleum and salt contamination in Upper Village wills would cost from $2 million without fire suppression to $3 million with suppression features that include a water tower and larger mains.

The creation of the water district requires trustees be appointed by selectmen for staggered one-, two- and three-year terms. New Gloucester voters would elect three trustees to develop bylaws and conduct water district business.

Once the water district is formed, applications will be submitted for funding through Cumberland County Community Block Grant program and Maine Rural Development. In addition, voters in New Gloucester may be asked to approve funding a portion of the project in the future.

Nineteen households are contaminated with salt and petroleum from leaking underground gasoline tanks dating back to the 1970s and ’80s. Those properties will be linked to the public water system at no cost to the owners, if the water district reaches final approval.

Town Planner Paul First said 30 to 35 hookups would make the project viable. Hookups are not mandated but optional for those without pollution at this time, he said.

Darrin D. Lary, P.E. of Wright-Pierce said the system could be operational by the winter of 2013.