A municipality should not be using tax dollars to fund their sewer system.
A sewer system should be funded via usage fees (sewer bills) and that revenue should go into an enterprise fund. And that enterprise fund should ONLY be used for expenses related to the operation of the sewer system.
This is considered best practice, and may in fact be legally mandated in some states.
Trying to run a sewer system for 5000 people with a yearly budget of less than $30,000 seems almost impossible. How can there be any funds for maintenance?
What is really needed in those cases is a scaled-down, more modernized system, but they lack the money to do that. Don't really know how to fix that, though, since it isn't fair for other people living in other municipalities or locations to pay for sewer systems in other places.