Voters in Watertown on Tuesday agreed to borrow up to $30 million to pay off years of unpaid water bills that local officials had warned threatened to plunge the town into a fiscal crisis.

According to results posted on the town’s website, more than 70% of voters approved the referendum, allowing officials to breathe at least a temporary sigh of relief.

“We need to pass this and pay the bond off and determine a way to move forward,” Town Council Chairwoman Mary Ann Rosa said prior to the vote. “The devastation that a ‘no’ vote will cost the town will be overwhelming and will only lead to higher costs for ratepayers.”

The referendum followed years of negotiations and, ultimately, litigation over water between two appropriately named communities: Waterbury and Watertown.

The squabble began in 2018 when Waterbury — facing mounting costs to operate and maintain its aging water and sewer infrastructure — decided to begin charging its smaller neighbor higher rates to use those systems.

For decades, contracts between the two towns provided Watertown with water and sewer services at much lower rates than those paid by Waterbury residents. Waterbury’s decision stop offering a discount doubled the price Watertown paid for water, while sewer prices rose by over 300%.

The response from officials in Watertown was to continue paying the old rates for water and sewer while protesting the price increases.

After several months, Waterbury sued its neighbor to begin collecting the debt. In 2023, a superior court judge ruled in the city’s favor, ordering Watertown to pay $18.8 million in unpaid water bills.

Watertown appealed that decision while continuing to pay the lower rates. By the time the Connecticut Appellate Court upheld the lower court’s ruling earlier this year, Watertown’s debts had ballooned to more than $34 million — nearly the equivalent of town’s entire annual budget.

After losing their appeal, officials in Watertown began paying the higher water rates. But the town is still accumulating over $10,000 in interest each day on its debts.

Waterbury Mayor Paul Pernerewski expressed satisfaction with the results of the referendum on Wednesday, saying that a “little bit more” work is needed before city can begin collecting the debt.

“It’s been a long, ongoing dispute,” Pernerewski said. “I think we’re at the point now where the whole issue can be resolved.”

Even with a path now open for the town to begin paying off its debts, residents in Watertown have expressed outrage at their elected officials for allowing the issue to snowball and frustration at the town’s messaging around the plan to borrow money to pay back its debts.

“They never looked into what would happen if we lost,” the appeal, said Katherine Camera, a resident of the Oakville neighborhood who opposed the referendum. “So scrambling now and telling people, you know, ‘You have to do this, you have to do this,’ when we’re not really ready, we don’t really even understand, it’s just bizarre to me.”

The bonds themselves are to be paid back by the roughly 4,300 customers of the town’s Water and Sewer Authority.

Prior to the vote, Watertown released estimates stating that the bonds will add around $295 a year to the average customer’s water bill. But Camera, who said her usage is less than the publicized average, received a separate estimate at a public meeting in August showing her added costs could be up to $1,136 a year. (Camera is one of a slate of Independent Party candidates running against the Republican-led town council in the November municipal elections.)

In addition, the town also published information stating that the Watertown Fire District — a separate utility located within the town’s borders — will contribute $6 million toward paying off the debt to Waterbury. Officials with the Fire District, however, released their own statement saying they had not made any such arrangements and had no obligation to do so.

Representatives of the Fire District were not immediately available for comment on Wednesday.

Watertown Town Manager Mark A. Raimo said the Fire District is bound by a 1970s-era agreement to pay for its share of the town’s debt and that two sides are engaged in ongoing conversations. “This is a problem they have to work with us to resolve,” he said.

Another option being discussed by town leaders could offset much if not all of the costs from the bonds: selling the water system to a private entity.

Rosa, the council chairwoman, said Wednesday that a task force, convened by the town to study the next steps, is likely to look into a potential sale, which would require the town to solicit bids and hold another referendum.

“Will there be interest? Companies have expressed that, yes, there will be,” she said, without naming any specific interest bidders. “But we have to go through the legal procedures to make it official.”