Fairlee — Voters in a Special Town Meeting on Wednesday rejected a proposed $4.1 million bond to make water system improvements in downtown Fairlee. The bond — which failed on an 89-77 vote in all-day balloting — was sought to replace a failing 265,000-gallon municipal water tank off Bald Top Road for about $1.1 million; build a $1.4 million filtration and softening system to deal with water-fouling magnesium; and replace about 1.6 miles of water main for $1.4 million.

Town officials said some of the bond would have been paid for through increases in fees to the water system’s municipal customers, and Fairlee also was hoping to claw back some money for the tank replacement from the company that built the failing tank 12 years ago. Town officials also hope to get money through the USDA’s Water & Waste Disposal Loan & Grant Program in Vermont.

But some residents wondered if all the work is really needed, and also have worried about the tax impact. Voters earlier this year approved borrowing up to $850,000 to renovate Fairlee’s historic town hall.