Bayside Utilities District Notes

Bayside Utilities District

Hearing #2

August 9, 2003

Presenter: Steve Levy, Executive Director of Maine Rural Water

I. Background and Information

a. The legislation is an act to create a Utilities District. This action is unique, as it is a proposal to take utilities from a Village Corporation to a Utilities District. Because of its uniqueness, it demands two different votes. As the legislation was written, input from Village representatives was sought at each step along the way.

b. A Utilities District is a separate entity from either the town or village. The Village is the smallest entity in this municipality, followed by a larger entity, the Utilities District, which encompasses some people outside the Village as well as NVC, then the largest municipality concerned here, the Town of Northport , under whose jurisdiction everyone would fall. The Town of Northport does not have a Utility District now.

c. The intent of the legislation was to preserve the voting rights of the NVC residents. At no time did the legislature intend to disenfranchise Village voters.

d. Legal advice on this issue was sought by a lawyer from Pearce/Atwood.

II. Setting up the District

A. Vote #1. To approve the transfer all assets now being used for water/wastewater handling to a Bayside Utilities District (BUD). (The NVC vote will be held during the annual meeting on August 12, 2003 .) A “yes” vote is a support for the establishment of the Utilities District.

Question: Who is eligible to vote? (A. Baddershall)

By charter, those owners listed on property deeds in NVC are legitimate voters.

Question: Just what assets are we talking about?

(A lengthy section from the legislation was read.)

Question: Will the Village be giving away valuable assets? This document is objectionable.(B. Crofoot)

The BUD deed to be drafted by an attorney for the Village can include a “reversion clause” which would ensure that land no longer needed by the BUD would be reverted to NVC. A “lease-back provision” could also ensure the same result.

Question: We also have agreements with Belfast and the pumping station which use the words “privilege of using”. Would this privilege also be transferred? (B. Crofoot)

Yes.

Question: Would a “yes” vote be binding on the Overseers? (D. Crofoot)

It is hoped that the Overseers would act according to the wishes expressed by the people through the vote.

Question: What happens if the vote is “yes”? What is next?

Nothing happens until Vote #2 takes place, the referendum vote in the Town of Northport . It takes 2 votes to allow the District to be created.

Question: What happens if the vote is “no”?

The referendum vote in the Town of Northport is held anyway, but since NVC would not allow the transfer of assets, the District cannot be established. This question can be brought before the voters again any time before January 2005, according to the legislation.

Question: What happens if the vote is tabled? (T. Samway)

It is the same as a nay vote because the assets may not be transferred.

Question: Why not have a water district just for Bayside? (M. Borgenson)

The users of the water come from a larger geographical area. This number of non-residents is likely to grow.

B. Vote #2 The Utility District Referendum.

Question: Who is a registered voter for Vote #2, and who is left out?

Those residents who are signed up as legal voters in the Town of Northport , and who will reside in the BUD can vote. Villagers who have not established their legal voting residence in Northport can do so temporarily, if they so wish. Summer residents and property owners in the NVC who are registered voters in another municipality cannot vote at this referendum.

Question: When is the referendum to be held?

On September 22, 2003 . The law says we have one year to hold the two votes and set up the District.

C. Vote #3: Trustees (4 NVC users and 1 outside of Village user; vote to be held in summer of 2004)

Question: As the legislation reads, the NVC cannot vote for the trustees. Is this correct, and could it be changed?

This is one area your “attorney extraordinaire” would look at. The legal counsel stated that this statement is in a gray area, and not necessarily true or false. It was not the intent of the legislature to disenfranchise the village voters. The fact that 4 of the trustees must be from the Village should protect the interests of the Village.

Question: Does the legislation as written meet the intent of the bill? (D. Brockway)

This is the gray area. It might work out fine; however, if someone challenged it in court, it might not stand. It should be taken to the legislature for clarification, which would best be done in January. This way the trustees would be elected in July or August of 2004.

Question: Will the trustees be trained? (T. Merolla)

It is hoped that they would take the courses offered. The fact that they are elected for more than one year would ensure that they were more knowledgeable than the Board of Overseers.

Question: The standard form for Utilities Districts says that trustees can not be Municipal officers. Does this apply to us? (D. Crofoot)

That is why we have a “unique” document, because our charter must have different options. When the BUD document is drafted, it will be taken into consideration.

III. Miscellaneous Questions

Question: How would we go about amending the legislation?

Return to legislature

Question: How would we increase the territory if it became necessary? (M. Borgenson)

Return to legislature. It would require another vote.

Question: From where would the BUD income be derived? We now use taxes. (D. Crofoot)

User fees and borrowing.

Question: Could the BUD be dissolved in the future? (Z. Huntoon)

Yes.

Question: How hard is it to get a special qualification implemented by the Legislature (like the issue of Overseers not being trustees).

It is not uncommon to go back to the Legislature for changes. The issue of voters’ eligibility is an easy fix.

Question: Why not get it right the first time? (T. Kavitch)

The NVC is unique, and its problems and situations were difficult to understand. But putting off the BUD may threaten the financial stability of the NVC, because the DEP is threatening us with huge fines if we are not making progress on correcting the wastewater problems. The BUD is a positive step toward this.

IV. Benefits (70% of Maine utilities are managed in a Utility District.)

Question: What are the benefits of the BUD?

Trustees would be more knowledgeable than Overseers can be. Their staggered terms ensure that experienced people would be always available. The Overseers have enough work to do running the Village. The increased demands of the Utilities in the Village make their involvement impractical. The liabilities of the NVC would become those of the BUD. This would ease the burden of borrowing for the Village. All debt transfer must be approved by the Bond Bank. The BUD would have eminent domain rights over a larger geographical area than does the Village, and would be able to acquire land needed for the new wastewater treatment facility which looms in our future. The Town’s Comprehensive Plan shows future growth areas which would impact the water facility. The Bud would be an established management structure to handle this growth.

Final Words from Steve Levy:

In order to decide, ask “Is the current way working well?” Could it be changed to work well? If we don’t form a Bayside Utilities District, what else is there?

Here are the arguments as presented about the Bayside Utility District.

Arguments/Concerns about BUD	Rebuttal
Tuesday’s vote asks us to give away our assets	Tuesday’s vote asks only if we would be willing to transfer our assets if a BUD is formed.
A yea vote on Tuesday gives away our assets.	1. A yea vote only says we would be willing to transfer assets, but the actual transfer, including legal documents/deeds with clauses included to protect our NVC interests, would be done by the Overseers. The Village should hire an attorney who is experienced in this kind of legislation. 2. It is not binding on the Overseers, but if the Village has vote in favor of the BUD receiving the assets, it would be a very unusual move on the Overseers’ part to not act accordingly. 3. The law gives us until May of 2004 to actually set up the district, with trustees being elected after that. 4. It is possible to have a clause written into the legal document which would allow for the reversion of land to NVC in the event that the land was no longer needed by the BUD. “A Land Reversion Clause.”
The second vote, in the Town of Northport , scheduled for September 22, is for legal residents of the Town who reside in the proposed BUD, and disenfranchises the village voters.	1. A Town yea vote says only that they approve the establishment of a BUD. Again, the Overseers and Selectmen must actually create the District. 2. The year-round eligible voters in the Town of Northport should have the best interests of the village at heart, as they live here year round. 3. Disenfranchisement of NVC voters was not the intent of the legislation, and by returning to the legislature, the voting issues could be clarified. The lawyer consulted said that this is a gray area, and might be challenged if not clarified. 4. The second vote is a referendum vote, and has to be handled in the Town.
We should get the “Bugs” out of the legislation before putting it to a vote.	1. The time line is already pushing off action for one year. As presented, vote 1 is Tuesday, Aug. 12. Vote 2 in the Town is in September, and, assuming it passes, the vote for trustees would take place next summer. 2. We are already in deep trouble with the DEP over the waste water treatment plant, and face fines of $25,000 now, reduced from a much larger fine because we could prove that we are working on the problem. If we put off the BUD, we would then have to defend ourselves against DEP pressure, and possibly face even larger fines for a non-conforming treatment plant. 3. The best time to go back to the legislature is January. Then they would have time to correct the things NVC is concerned about.
Trustees: NVC voters will not be able to vote for the trustees. The “Standard” Utilities document says that no municipal officers can be trustees.	1. The legislation calls for 4 trustees to be from the NVC. We should trust that they will protect the NVC interests. 2. These are two areas that should be adjusted by the legal agreement set up when the BUD is established. This document has to be unique to NVC because it is a Village Corporation.
Who is a legal voter in Bayside? Are wives and others living in the home allowed to vote?	1. Only those listed on the deed are eligible to vote. Voters must own a piece of property “In fee simple”, which means it can be passed on through inheritance.
How could NVC owners become eligible voters in Northport?	1. By making Northport your legal residence. 2. It is possible to go and change your residence for a short time, in order to vote on these questions, then change back to your former residence afterwards. (I think this idea smacks of cheating. Ellie)
What happens if we turn it down in Vote 1?	1. The referendum vote (#2) still takes place in Northport. However, since the BUD would then have no assets, in effect, the BUD is rejected. 2. The legislation allows us until January of 2005 to set this up. This means it could be brought to the voters again next year if the Overseers wish to do so.
Why do we need a District?	1. Trustees running the BUD would be elected for staggered terms, ensuring that there would always be knowledgeable people running the District. 2. The Overseers are elected for one year only, and often do not re-run. This means they are not informed about the many facets of running the complex business of the Utilities. 3. Overseers have a difficult time handling all of the work of running the Village outside of the Utilities complex problems. 4. The BUD would cover a different geographical area from just the NVC, and this would give those people a voice (1 of 4 trustees). The Town is growing constantly, and more people within the designated district will want to go on to water. If the Trustees feel the time comes when we need to expand the lines of the District, it must be taken back to the legislature.
What about the debt? Right now the Village can tax and set fees. What happens with a BUD?	1. All debts for Utilities which now are the NVC responsibility will be transferred to the BUD, with the approval of Bond Banks. 2. The BUD sets the fees and borrows money, just as can the NVC.
What happens if the Board of Overseers changes, and does not want to do this?	It is hoped that the Board would go along with the expressed wishes of the voters.
Could the BUD be dissolved?	Yes.