Residents Warn of Impact on Housing Affordability, Change Still Must Be Approved by State PUC

Carrie Jones

Feb 19, 2026

The Bar Harbor Story is generously sponsored by Havana.

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BAR HARBOR—Bar Harbor residents, nonprofits, and businesses who use town water are one step closer to paying more for that service after a split-town council approved a new rate structure.

The change comes after a decade of no changes at all.

The Public Utilities Commission must also approve the rate plan, which has already been sent as part of the process. The current budget has a shortfall of approximately $1 million.

The past shortfalls have been made up by using the reserves, Public Works Director Bethany Leavitt has previously said. Those reserves have dwindled.

The changes worried the residents who spoke at the public meeting.

“If you don’t use a lot of water (like for seasonal) why should you be charged more?” Janey Whitney asked. She said that she didn’t think it was fair.

Water, Kevin Knopp said, is a precious natural resource, why not incentivize its preservation?

Knopp also cited the town’s sustainable tourism task force meeting, he stressed that the town tourism dollars to subsidize services to the community.

The comprehensive plan, recently approved by voters, speaks to trying to increase opportunities for more affordable year-round homes.

“If we care so much about affordability in this town,” he wondered, “especially affordable housing, why would you approve a water rate structure tonight that will contribute to the exact opposite of these goals?”

Sharon Knopp thanked everyone for their work and echoed the concerns, saying that she wasn’t criticizing anyone.

“Are our rates reflecting our philosophy as far as who should be paying more for these resources?” she asked and said that many residents felt like they were subsidizing the tourism industry. “I really think that’s a question our town needs to look at.”

“It just isn’t fair,” Katherine Whitney said of the changes at the time when the town is also trying to encourage more year-round housing of families. “It doesn’t make any sense to me.”

Affordability and conservation and fairness were themes in the residents’ comments.

“I voted for a lot of you here because when you ran for council a lot of you talked about affordability,” Brynna Golden said.

Golden added that it was an unconscionable burden to put on older residents and the most vulnerable rather than businesses. She said it seemed “unfair and wrong” to structure the rates the way they are proposing.

Town Manager James Smith said that he understood their worries and sentiments, but that there was misinformation being perpetuated about the rates and water budget, rates that aren’t easily explained in simple terms, he said.

While the rates themselves are a flat 35% increase for usage over the assumed minimum, that is only consumption, Public Works Director Bethany Leavitt explained. There are fixed dollar amounts in meter accounts, which represent a certain amount of the budget revenue.

The assumed minimums vary according to the size of the meters.

Currently, though residents are 70% of users, they only bring in 40% of the revenue.

A flat rate for just water usage, it was said, would impact residents much more than what is being proposed.

A flat rate would quadruple the cost to residents, Leavitt said.

Different meters have different tiers of base costs and rates. Most residents on the smallest meters (⅝-inch) will likely now pay $34.28 a month, up from $25.39 a month.

“The rest of the users on a higher meter size, 1 inch and higher, were paying somewhere between an effective rate of 79% and 181% I think the number was, so, they’re not actually going to get a 35% rate increase, they’re going to get somewhere between 79% and 180% increase,” Leavitt said.

It’s more than that though.

Bar Harbor isn’t the right size town for an across-the-board, simple, flat-rate system. It’s against the state PUC’s rules.

“They don’t allow towns with a system of this size to do that,” Olvr Associates Vice President Annaleis Hafford said.

Olvr Associates stepped in to help with the plan’s creation after the original company meant to help the town no longer could because of retirements. Finance Director Sarah Gilbert thanked Hafford for the work, saying she was only one of a handful of people in Maine who perform the service.

The budget is complex and hard to understand, Smith said, because there are multiple layers and parts.

“There’s different ways to understand these complexities. The system costs $3.3 million to run, and of that $3.3 million, $2.2 million is a fixed cost, so we have to raise that revenue no matter what just to have our system ready to deliver one gallon of water,” Smith said. “There’s no way to do a flat rate that doesn’t leave you very vulnerable to any variation in consumption. If we actually have people who try to conserve water, and we have a large consumer who tries to conserve, and they have a 15% decrease in consumption, we’re not going to have enough money to pay those bills. When you think about it just in terms of gallons consumed, it’s not the best way to consider what it takes to make drinking water.”

What it takes, they said, is a system: pipes under ground, meters, filtration. Those are costs before the water is even used. It’s also, they said, why the users’ costs aren’t just about water used.

The average residential water user consumes approximately 1,205 gallons of water each quarter. The minimum rate is for 1,200 gallons.

For a customer with the smallest meter (⅝”), who consumed 8,314 cubic feet this year, they currently pay an annual total of $480. That same customer would now pay $621, a cost increase of $161 or 35%.

According to staff, a user with a ⅝” meter who is using close to the minimum would see a $26.66 quarterly increase, which would be approximately $8-12 a month, or a $106.64 increase yearly.

However, a larger user with a 6” meter who used 1,687,085 cubic feet of water would see their bill increase from $30,594 to $57,823, an increase of over $27,000 or 89%.

Users with 3” and 4” meter in comparisons shown by staff often had increases of annual cost between 89% to 174% depending on consumption.

The proposed rate structure has multiple tears for year-round and seasonal use. Seasonal users pay higher rates than year-round users with the same size meters.

The differences (beyond the simple 35%) are due to tier changes and overage changes.

Town Council Vice Chair Maya Caines said people had asked why seasonal water customers have a higher base rate. It’s because there is more work involved, such as meters being turned on and off. They’ve always been charged a higher rate.

Councilor Steven Boucher asked if staff and Hafford could help people understand why the town doesn’t follow the philosophy of why we don’t pay exactly what we use.

It would cause a fiscal insolvency, Gilbert said. The town wouldn’t have enough revenues in its water budget—which is separate from the general budget—to cover what it cost to run.

Before the town even serves a gallon of water there has to be a readiness to serve the water customers, she said, as had Smith before. That costs money.

In June 2022, voters approved a $43.9 million sewer and water bond to upgrade the sewer and water in town. Part of that money is also for a streetscape project on Cottage Street, which was designed in 2017. Cost increases to people’s water bill occur as the bond is repaid.

That bond sold in August 2023 and in finance reports and other reports to the council, Leavitt and Gilbert have talked about how the bond payment will likely impact water rates, mentioning a likely 34.3% increase in a FY 2024 water budget presentation back in 2023.

The budget shortfall also stems from other planned capital improvement projects. Other causes, according to town staff, are inflation, increases to staff salaries, increase in capital investment.

The PUC allows 1.5% interest increase annually after the general revaluation, which was what is occurring now. The councilors indicated that they’d like to review it again next year and see how it was impacting the water customers.

“Up until now we’ve practically given the water away,” Councilor David Kief said.

He’d like to look at it again in a year, worrying about the impact to residents and potentially go toward the bulk users a bit more. He was the sole vote against the change.

It’s about $8 a month increase for average residential users, Brechlin said, which translates to $40 a quarter.

Caines said, “I get the frustration and I’m frustrated, too.”

Her internal battle is that for some households, like her own, that $40 increase a quarter has an impact, but at the same time deferred maintenance on the system and the need to make the budget solvent increases the pressure on the current staff and council.

“Take the bitter pill now,” Councilor Randell Sprague said of a process that he called painful particularly after ten years of no increases. “We should just get it over with.”

The town’s final filing is due to the PUC by February 27. If approved, rates could change April 1.

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LINKS TO LEARN MORE

To see the council agenda.

To watch the meeting.

Bar Harbor’s Water Rates Likely To Rise as Infrastructure Investments Keep System Afloat

Carrie Jones

Jan 21

Read full story

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