Winooski City Manager Katherine Decarreau and her predecessors spent years grappling with big problems. They searched for companies willing to invest in the hulking, abandoned mills along the Winooski River that seemed a cruel reminder of how far the city had fallen. They struggled to draw visitors to a downtown bereft of dining and entertainment options. They coped with a shaky property tax base, while neighboring Burlington, Essex Junction and Colchester all thrived.

But in the last few months, Decarreau has been dealing with a dilemma that stems from fixing all of those ills: complaints that there is too much noise being generated in the now-hopping downtown.

"An old boss of mine once said, 'The best you can get in life is having a better problem to solve,'" Decarreau said. "For years, we were criticized for nothing happening, and now things are happening. That's a better problem to have."

But it is a problem nonetheless.

Last month, a group of residents from the Cascades Riverfront Condominiums expressed concern that neighboring Waterworks Food + Drink restaurant planned to offer outdoor seating for up to 70 patrons in the summer. On behalf of the Cascades Condominium Association, residents Kate Savelyeva and Nancy Blasberg wrote to Decarreau and the city council questioning the decision to permit Waterworks to serve on the riverwalk area, which is public space.

The Cascades, where two-bedroom units go for around $250,000, bills itself as offering "the finest in upscale city neighborhood living," and being "fully integrated into the lively downtown area."

"We believe it is important for us and for the value of our property to better understand the city's plans," the letter said. Blasberg did not respond to a request for comment. Savelyeva declined to answer questions.

Meanwhile, city officials have periodically received complaints in recent months from other downtown residents. Interim Police Chief Rick Hebert recently held a community meeting to talk about noise from concerts at the Monkey House and other bars, and city councilors are debating whether to alter the downtown decibel-level limit or impose other restrictions.

Nobody is getting exactly what they want, Decarreau said.

"We think we can achieve perfection and get everybody in a room and make everybody delighted with a single consensus-building moment, but it doesn't happen that way," Decarreau said. "You will never achieve 100 percent satisfaction in any solution. As soon as government gets involved, it's because there's a dispute."

Waterworks owner David Abdoo said the controversial outdoor seating is vital to his business plan. The lure of al fresco riverfront dining will bring in revenue to offset the cost of transforming the 7,500-square-foot restaurant space, which had been empty for about decade before Abdoo and his partners opened last year.

"For me, the investment in a space like this, the margins are so small, you have to generate a profit to grow, and the big draw here is a beautiful spot on the river," Abdoo said.

In response to his neighbors, city hall got Abdoo to promise to clear away outdoor patrons by 10 p.m. — two hours earlier than he can legally serve.

The compromise is fair, according to Abdoo.

"I'm very comfortable with the situation," he said. "You don't want to come in and say, 'I have a legal right to do it,' and stay open until 2 a.m. I listened to their concerns. It's about coexisting with everybody. We're going to be together for a long time."

Neighbors appear willing to drop their opposition. "The subject is closed now," Savelyeva said. She declined further comment.

On the other side of the traffic circle, Decarreau said, a few residents have voiced complaints about music from bands playing at the Monkey House. In response, city councilors recently considered amending an ordinance that would have lowered the acceptable volume from 100 to 70 decibels.

But there was a big problem: When police officers took their decibel meter downtown, they found that even during a relatively quiet afternoon, noise from the surrounding area and vehicular traffic on the roundabout already surpassed 70 decibels.

And if the city imposed a higher limit — say, 85 decibels — police officers would be responsible for responding to complaints and measuring the sound levels. The prospect was not appealing to the cops.

"The reason I held the forum was, I was trying to come up with a better solution than calling the police," Hebert said. "The businesses are very open to working with us. They don't want to be bad neighbors. We're trying to get people to see both sides."

Monkey House owner Ryan Smith said he and other downtown business owners are trying to be considerate while preserving their need to keep the downtown vital.

"It's been a civil conversation," he said. "We want to be good neighbors, but we don't want to impede our success. Most people understand. It's tough to find a compromise in a small city that is growing so quickly, to make sure everyone is successful and everyone is comfortable."

On Monday night, the city council was ready to adopt an agreement that would have kept the decibel meters on the shelves. Venues with entertainment permits for live music or "amplified sound" would have been required to close their windows and doors by 10 p.m. on weeknights; on weekends, by midnight.

But Smith told councilors he was uncomfortable with the strict time limits in that compromise. If it was an especially warm night, or if a quiet band was playing, Smith argued, he shouldn't be forced to close his windows. He said he preferred a case-by-case approach.

"Our track record is that 100 times out of 100, when police come to our establishment and ask us to close our doors, we've done it," Smith said, describing the proposed rule as "close-minded. I don't think what's on that paper right now is fair."

Instead of making a decision, councilors asked Decarreau to research a new proposed ordinance that would address Smith's concerns. Limits on decibel levels, Decarreau said, may be considered again. The council is scheduled to revisit the issue later this month.

Winooski's noise problems may seem unremarkable, even trivial, compared to those on Burlington's bustling Church Street. But in the last few years, Winooski has become a trendy, less expensive alternative to Burlington for many young professionals, and nearly a dozen restaurants and bars around the downtown roundabout are packed with patrons nearly every night.

The city spawned one of Vermont's hippest music events. Last weekend, the fifth annual Waking Windows festival drew several thousand people downtown to hear dozens of bands over three days. Some city streets were closed, and fans flocked to an outdoor stage. The music could be heard several blocks away.

The festival's organizers obtained permits without a hitch — not one citizen or business opposed the festival, Decarreau said. The Winooski Police Department said there were no noise complaints associated with the event.

Meanwhile, city leaders are turning their attention to other areas of the city, and have started drafting regulations in three so-called "gateway areas" where they hope to see more commercial and residential development. The recent downtown noise debate, officials said, will guide any growth.

For example, Hebert suggested that while designing master plans for the gateways, acoustics should be considered more carefully. City officials believe the way the downtown buildings have been designed and laid out has created something of a noise tunnel that runs from the traffic circle through Winooski Falls Way, where the Cascades and other condo complexes are located. Those who construct new buildings might be required to install more effective soundproofing measures.

Regardless, Decarreau said, Winooski must continue to lure more businesses if it is to remain healthy. "I don't think anybody is trying to curtail it," Decarreau said. "They're trying to maintain a quality of life."