By Tara Fischer

Staff Writer

(Aug. 27, 2026) The Berlin Town Council approved additional state funding Monday to help cover the hefty price tag of the town’s lead service line replacement project, which officials said has become more expensive than originally expected.

The council voted unanimously to accept a $2,286,773 funding package from the Maryland Department of the Environment through the Maryland Water Infrastructure Financing Administration for Phase 1A of the project.

The approval comes after the town returned to the state seeking additional assistance as project costs increased.

“This is not a project that Berlin just undertook,” Berlin Town Administrator Mary Bohlen said. “This is mandated for every community to do.”

The lead service line replacement project began in 2023 after the state required municipalities to address water service lines that contain lead. At the start of the initiative, the town applied for funding based on early estimates, but the anticipated cost grew as the project moved forward.

Nicholas Bradley, an engineer with Davis, Bowen & Friedel, the town’s engineering consultant, told the council earlier this year that additional expenses required by the state, including a 3% administrative fee and a 5% contingency, contributed to the gap between available funding and the project’s actual cost.

After the town completed the project’s design and put the work out to bid, it received one response from Teal Construction Inc. that exceeded the amount of funding previously secured.

The municipality subsequently requested additional funding from the state, resulting in the revised offer approved Monday.

Berlin Finance Director Natalie Saleh told the council the state has offered an additional $309,060 in reprogrammed fiscal year 2024 funding to support the water line replacement project.

The total funding package offered for Phase 1A is $2,286,773. The project’s estimated expenses total $2,286,852, leaving the town with a $79 shortfall that will be covered with cash from the town’s water fund.

The funding package is structured through the Drinking Water State Revolving Fund and includes both traditional loan funding and a loan with principal forgiveness.

Of the total package, $1,007,823, or about 44%, is listed as loan funding. Another $1,278,950, or about 56%, is listed as a loan with principal forgiveness.

Councilman Jack Orris asked whether the town would ultimately be required to repay only the 44% portion.

Saleh clarified that the principal forgiveness does not occur immediately.

“It’s not fully forgiven,” Saleh said. “It will be forgiven after several years of payment on the interest.”

She added that the exact structure of the financing, including the interest rate, will be determined after the town approves the funding and moves forward with closing. The loan term can extend up to 30 years, according to the staff report.

Saleh said the $1,007,823 in standard loan funding will be the town’s responsibility, while the remaining portion is subject to the principal forgiveness provisions.

The town also will have costs associated with the settlement and other financing requirements.

The additional state funding follows an earlier council decision to move forward with the project despite a substantial funding gap.

In April, the council approved awarding the project’s approximately $1.94 million base bid to Teal Construction, contingent on the town securing additional financial support. At the time, the town faced a funding shortfall of roughly $463,000 and transferred $500,000 from another capital improvement project to help address the gap.

By May, officials reported that the shortfall had increased to $618,119 after additional project costs were incorporated.

The motion to accept the additional funding passed unanimously, with Council Vice President Dean Burrell absent.