An Act To Create the Southwest Harbor Water and Sewer District
Maine Legislature, Session 127, LD 1231
Committee: Energy, Utilities and Technology
Sponsors: LANGLEY

Legislative Document 
No. 1231 
S.P. 436 
In Senate, April 7, 2015 
An Act To Create the Southwest Harbor Water and Sewer District 
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Secretary of the Senate 
Presented by Senator LANGLEY of Hancock. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  Territorial limits and corporate name and purposes.  The 
inhabitants and territory of the Town of Southwest Harbor constitute a quasi-municipal 
corporation under the name of the Southwest Harbor Water and Sewer District, referred 
to in this Act as "the district," for the purpose of supplying the inhabitants of the district 
with potable water for domestic, commercial, sanitary and municipal purposes and for the 
purpose of providing in the district a system of public sewerage and drainage for the 
comfort, convenience and health of the inhabitants of the district. 
Sec. 2.  Powers of the Southwest Harbor Water and Sewer District.  The 
district is authorized to take, hold, divert, use and distribute water from any source within 
the territory of the district, including but not limited to Long Pond in the Town of 
Southwest Harbor.  The district is also authorized, for the purposes of its incorporation, to 
locate, construct and maintain pipes, dams, wells, reservoirs, pumping stations, treatment 
plants and other necessary structures and equipment and to do all things necessary to 
furnish water, sewerage and drainage for those purposes and for the public health, safety, 
comfort and convenience of the inhabitants of the district. 
Sec. 3.  Authorized to lay mains, pipes, conduits and other water 
conveyances through public ways and across private lands.  The district is 
authorized to lay, maintain, repair and replace pipes, mains and other fixtures and 
appurtenances in, along and through the streets, roads, ways, highways, bridges, ponds 
and watercourses and in, along and through private lands of any person or corporation 
within the district.  When the district lays, maintains, repairs or replaces pipes, mains and 
any fixtures or appurtenances in any street, road, way or highway, it shall do so with as 
little obstruction as practicable to public travel and shall at its own expense and without 
unnecessary delay replace in proper condition the earth and pavement removed by it. 
The district is authorized to lay, maintain, repair and replace pipes, mains and other 
fixtures and appurtenances to or into any drain or sewer now or hereafter built that 
empties into watercourses or treatment works, the discharge to be at such point or points 
consistent with the requirements of public health and as convenient and reasonable for the 
district and consistent with the requirements of applicable federal, state and local laws 
and the flow of existing watercourses. 
1.  Sewer extensions.  Sewer extensions are governed by the Maine Revised Statutes, 
Title 38, section 1042. 
2.  Coordination with municipal planning.  The trustees of the district shall 
cooperate with municipal officials in the development of municipal growth management 
and other land use plans and ordinances. 
Municipal officers shall cooperate with the trustees of the district during the consideration 
of development applications that may affect the operations of the sewer district. 
3.  Abutting owners have right to enter.  The district shall permit the owners of 
premises abutting upon its lines of pipes and conduits to enter the same with all proper 
sewerage and to connect the same for potable water, if the owners of such premises 
conform to the rules and regulations of the district and pay the established rates, tolls, 
rents and other lawful charges. 
4.  Inspection of sewers.  The officers or agents of the district have free access to all 
premises served by the district's sewers, at all reasonable hours, for inspection of 
plumbing and sewage fixtures, to ascertain the quality and quantity of sewage discharged 
and the manner of discharge and to enforce the provisions of this Act and the rules 
prescribed by the trustees of the district. 
5.  Injury to the property of the district.  A person may not place, discharge or 
leave any offensive or injurious matter or material on or in the conduits, catch basins or 
receptacles of the district contrary to its regulations or knowingly injure any conduit, 
pipe, reservoir, flush tank, catch basin, manhole, outlet, engine, pump or other property 
held, owned or used by the district. 
A person who violates this subsection is liable to pay twice the amount of the damages to 
the district to be recovered in any proper action and is subject to a civil penalty not to 
exceed $2,500 for each violation, payable to the district. The civil penalty is recoverable 
in a civil action. 
6.  Required connection.  Upon receiving a request from the district to connect a 
building located in the territory of the district that is accessible to a sewer or drain of the 
district and that is intended for human habitation or occupancy or that has facilities for 
discharge or disposal of waste water or commercial or industrial waste, the owner of that 
building shall arrange to have the building connected through a sanitary sewer or 
drainage system to the district's accessible sewer or drain in the most direct manner 
possible. If feasible, each building requiring connection must have its own separate 
connection.  The connection must be completed within 90 days of the receipt by the 
owner of the request, or within any extended period requested by the owner and agreed to 
by the trustees. For purposes of this subsection, "owner" includes the owners of record or 
any person against whom property taxes on the building are assessed. 
A person who receives a notice in accordance with this subsection to connect to a 
building and fails to connect to the building in accordance with this subsection is subject 
to a civil penalty not to exceed $2,500, payable to the district. This penalty is recoverable 
in a civil action. 
7.  Connections not required.  An existing building that is already served by a 
private sewer system is not required to connect with a sewer or drain of the district as 
long as the private sewer or drainage system functions in a satisfactory and sanitary 
manner and does not violate applicable law or ordinance applicable to the connection 
with a sewer or drain or the district or any applicable requirements of the state plumbing 
code, as determined by the municipal plumbing inspector or the municipal plumbing 
inspector's alternate, or, in the event that both are trustees or employees of the sewer 
district, the Department of Health and Human Services, Division of Health Engineering. 
8.  Permissive connection.  A person not otherwise required to connect a private 
sewer into a sewer of the district may connect to the district's sewer if that person obtains 
a permit from the district and pays any charges required by this section. The clerk of the 
district shall record the permit in the records of the district. 
A.  If construction of the district's sewer is complete at the proposed point of entry of 
the private sewer and the district has established an entrance charge for entry at that 
location, the person seeking to connect the private sewer at that location shall pay the 
entrance charge before the connection is undertaken. 
B.  If the district's sewer is under construction and not completed at the point of the 
proposed entry of the private sewer, the person seeking to connect the private sewer 
at that location shall connect to the sewer upon completion after the entrance fee is 
paid. 
Sec. 4.  Authority to acquire property; right of eminent domain 
conferred; procedures in exercising eminent domain.  The district is authorized 
and empowered to acquire and hold real and personal property necessary or convenient 
for its purposes.  The district is granted the right of eminent domain as specified in the 
Maine Revised Statutes, Title 38, section 1040 with respect to its sewer functions and is 
granted the right of eminent domain as specified in Title 35-A, section 6408 with respect 
to its water functions. 
1.  Procedures as to the exercise of right of eminent domain for sewer.  With 
respect to the sewer functions of the district, the procedures for the exercise of eminent 
domain must conform to Title 38, section 1040. 
2.  Procedures as to the exercise of right of eminent domain for water.  With 
respect to the water functions of the district, the procedures for the exercise of eminent 
domain must conform to Title 35-A, section 6409. 
Sec. 5.  Crossing property of other public utilities and railroad 
corporations.  If the district, in constructing, maintaining or replacing any of its 
facilities, must cross property of another public utility or railroad corporation, the district 
shall obtain the consent of the other public utility or railroad corporation and undertake 
the work in accordance with conditions established by agreement. If, within 30 days after 
requesting consent, the district fails to reach an agreement with the public utility or 
railroad corporation, the district may petition as follows. 
1.  Public utility.  In the case of crossing property of a public utility, the district may 
petition the Public Utilities Commission to determine the time, place and manner of 
crossing.  All work done on the property of the public utility must be done under the 
supervision and to the satisfaction of the public utility or as prescribed by the Public 
Utilities Commission. 
2.  Railroad corporation.  In the case of crossing the property of a railroad 
corporation, the district may petition the Department of Transportation to determine the 
time, place and manner of crossing.  All work done on the property of the railroad 
corporation must be done under the supervision and to the satisfaction of the railroad 
corporation or as prescribed by the Department of Transportation. 
Sec. 6.  Trustees, appointment; tenure of office; vacancies; first meeting 
and organization of board; annual report; transition provisions.  All the affairs 
of the district are managed by a board of 3 trustees, residents of the Town of Southwest 
Harbor who are appointed by the Board of Selectmen.  No member of the Board of 
Selectmen may, during the term for which the member is elected, be appointed as a 
trustee of the district.  The trustees hold office for terms of 3 years and until their 
respective successors are appointed and qualified.  The terms of the first board are 
governed by the Maine Revised Statutes, Title 35-A, section 6410. 
As soon as convenient after the Act becomes effective, the trustees shall meet and 
elect from among their members a president and clerk, adopt a corporate seal and elect a 
treasurer, who may or may not be a trustee, and any other officers and agents as needed, 
who with the treasurer serve at the pleasure of the trustees.  The treasurer shall furnish a 
bond in the sum and with sureties approved by the trustees.  The district shall pay the cost 
of the bond.  Members of the board of trustees may hold any office under the board, but 
may not receive any compensation, except as trustees, unless authorized by a vote of the 
Board of Selectmen of the Town of Southwest Harbor. 
The trustees of the district shall receive compensation as recommended by the 
trustees and approved by majority vote of the municipal officers representing a majority 
of the population within the district, including compensation for any duties they perform 
as officers as well as for their duties as trustees.  Certification of the vote must be 
recorded with the Secretary of State and recorded in the bylaws. Compensation for duties 
as trustees must be based on an amount specified in the bylaws for each meeting actually 
attended plus reimbursement for travel and expenses, with the total not to exceed a 
specific amount as specified in the bylaws. 
Whenever the term of office of a trustee expires, the Board of Selectmen of the Town 
of Southwest Harbor shall appoint a successor to serve the full term of 3 years. If any 
other vacancy arises from any cause it must be filled in like manner for the unexpired 
term.  All trustees are eligible for reappointment.  Trustees must be sworn to the faithful 
performances of their duties by the clerk of the Town of Southwest Harbor.  When any 
trustee ceases to be a resident of the Town of Southwest Harbor, that trustee vacates the 
office of trustee.  The trustees may adopt and establish bylaws consistent with the laws of 
the State and necessary for the convenience and the proper management of the affairs of 
the district and perform other acts within the powers delegated by law to the trustees.  
The trustees shall publish an annual financial report. 
A person who has not been a trustee of a sewer district prior to January 1, 1987 and 
who is not a full-time employee is not eligible to become a member of the Maine Public 
Employees Retirement System as a result of the person's selection as a trustee. 
1.  Trustee removed.  A trustee may be removed under the following provisions. 
A.  A trustee may be removed from the board of trustees with a majority vote of the 
municipal Board of Selectmen of the Town of Southwest Harbor for misfeasance, 
malfeasance or nonfeasance in office.  The selectmen must state at a regularly 
scheduled meeting of the Board of Selectmen the reason for which removal is sought. 
B.  Within 30 days after the vote by the Board of Selectmen pursuant to paragraph A, 
the trustee may appeal the decision to the Board of Appeals of the Town of 
Southwest Harbor. 
C.  Further appeals may be made to the Maine Superior Court under Rule 80B of the 
Maine Rules of Civil Procedure once all municipal procedures have been followed. 
Sec. 7.  Authorized to make and assume contracts.  The district, through its 
trustees, in order to carry out the purposes of its incorporation, may contract with a 
person, standard district, utility or corporation or with a municipality, the State or other 
governmental entity whether located inside or outside the boundaries of the district. 
Sec. 8.  Authorized to acquire water utility property and franchises of the 
Town of Southwest Harbor.  The Town of Southwest Harbor is authorized to sell to 
the district and the district is authorized and empowered to acquire by purchase or by the 
exercise of the right of eminent domain the entire water utility plant, property, franchise, 
property rights, privileges and assets owned by the Town of Southwest Harbor, including 
all land, waters, water rights, reservoirs, pipes, machinery, fixtures, hydrants, tools and all 
apparatus and appliances used or usable in supplying water facilities and drainage in the 
territory served by the municipal water department.  Upon transfer by the Town of 
Southwest Harbor to the district of its plant, property, franchise, property rights, 
privileges and assets, the district assumes all the outstanding debts and liabilities of the 
municipal water department, including, without limitation, any outstanding bonds, notes 
or other evidence of indebtedness of the municipal water department that are due on or 
after the date of transfer. 
The sale and transfer by the Town of Southwest Harbor of its water utility plant, 
property, franchise, property rights, privileges and assets; the assumption by the district 
of all the outstanding debts and liabilities of the municipal water department and the 
department assets; and all other water utility activities are subject to the approval of the 
Public Utilities Commission as may be required by the Maine Revised Statutes, Title 
35-A. 
Sec. 9.  Authorized to acquire sewer-related property and franchises of 
the Town of Southwest Harbor.  The Town of Southwest Harbor is authorized to sell 
to the district and the district is authorized and empowered to acquire by purchase or by 
the exercise of the right of eminent domain the entire sewer plant, property, franchise, 
property rights, privileges and assets owned by the Town of Southwest Harbor, including 
all land, easements, mains, conduits, fixtures, pumping stations, basins, treatment 
facilities and outlets used or usable in providing a public system of public sewerage and 
drainage in the territory served by the municipal sewer department.  Upon transfer by the 
Town of Southwest Harbor to the district of its plant, property, franchise, property rights, 
privileges and assets, the district assumes all the outstanding debts and liabilities of the 
municipal sewer department, including, without limitation, any outstanding bonds, notes 
or other evidence of indebtedness of the municipal sewer department that are due on or 
after the date of transfer. 
Sec. 10.  Completion of transfer.  Promptly after completion of the transfer and 
assumption of assets and liabilities pursuant to sections 8 and 9, the Town of Southwest 
Harbor shall cause to be filed with the Secretary of State certificates of dissolution 
certifying that all sewer and water assets of the municipality and all debts and liabilities 
of water and sewer departments of the Town of Southwest Harbor have been transferred 
to the district.  The certificates of dissolution must be signed by the chair of the Board of 
Selectmen of the Town of Southwest Harbor and by the municipal clerk.  Upon the 
respective filing dates of the certificates of dissolution of the Southwest Harbor water and 
sewer departments, the existence of those departments ceases. 
Sec. 11.  Authorized to borrow money; to issue bonds and notes.  For 
accomplishing the purposes of this Act, the district, by vote of its board of trustees, is 
authorized to borrow money temporarily and to issue for the borrowing of money its 
negotiable notes. 
The district, by vote of its board of trustees, is authorized to issue bonds, notes or 
other evidences of indebtedness of the district, bearing interest at a rate or rates and 
having terms and provisions as the trustees determine.  All notes and bonds with a 
maturity of more than one year and issued in connection with the water system only must 
first be approved by the Public Utilities Commission. 
All bonds, notes and other evidences of indebtedness issued by the district must have 
inscribed upon their face the corporate name of the district and be signed by the treasurer 
and countersigned by the president of the board of trustees of the district. 
All bonds, notes and other evidences of indebtedness issued by the district are legal 
obligations of the district, which is declared to be a quasi-municipal corporation within 
the Maine Revised Statutes, Title 30-A, section 5701.  All bonds, notes and other 
evidences of indebtedness issued by the district are legal investments for savings banks 
and are exempt from state income tax. 
Sec. 12.  Property tax exempt.  The property of the district is exempt from all 
taxation in the Town of Southwest Harbor. 
Sec. 13.  Sewer rates payable; adoption of new rates; application of 
revenue; collection of unpaid rates; authority to disconnect water for 
nonpayment of sewer service.  Notwithstanding the Maine Revised Statutes, Title 38, 
section 1048, this section governs the sewer rates of the district. 
An individual, firm or corporation, whether public, private or municipal, shall pay to 
the treasurer the rates, tolls, rents, entrance charges and other lawful charges established 
by the trustees for the sewer or drainage service used or available with respect to its real 
estate, including rates for the district's readiness to serve, that are charged against owners 
of real estate abutting on or accessible to sewers or drains of the district, but not actually 
connected thereto, whether or not such real estate is improved.  In this Act, "other lawful 
charges" and "other charges" include, but are not limited to, interest on delinquent 
accounts at a rate not to exceed the highest lawful rate set by the Treasurer of State for 
municipal taxes. 
Rates, tolls, rents and entrance charges must be uniform within the district whenever 
the cost to the district of installation and maintenance of sewers or their appurtenances 
and the cost of service is substantially uniform, but nothing precludes the district from 
establishing a higher rate, toll, rent or entrance charge than the regular rates, tolls, rents 
and entrance charges in sections where, for any reason, the cost to the district of 
construction and maintenance, or the cost of service, exceeds the average, but such higher 
rates, tolls, rents and entrance charges must be uniform throughout the sections where 
they apply. 
Prior to the adoption of a new rate schedule, the trustees shall hold a public hearing 
regarding the proposed rate schedule.  The trustees shall publish the proposed rates and 
notice of the hearing at least once in a newspaper of general circulation in the district not 
less than 7 days prior to the hearing.  The district shall mail to each ratepayer a notice of 
the public hearing and the proposed new rate at least 14 days prior to the hearing. 
Notwithstanding any other provision of law, if the district shares, supplies or 
contracts for services with another sewer or sanitary district, the district shall establish 
rates, tolls, rents and entrance charges mutually agreeable to the trustees of each 
participating district. 
The sewer rates, tolls, rents, entrance charges, assessments and other lawful charges 
established by the board of trustees in accordance with this Act must be fixed and 
adjusted to produce, in the aggregate, revenue at least sufficient, with any other funds 
available for the purpose, to: 
1.  Current operating expenses.  Pay the current expenses of operating and 
maintaining the sewerage, drainage and treatment system of the district including the cost 
of depreciation; 
2.  Payment of interest and principal.  Pay the principal of, premium, if any, and 
interest on all bonds and notes issued by the district under this Act as the bonds and notes 
become due and payable; 
3.  Sinking fund for retirement of obligations.  Create and maintain such reserves 
as may be required by any trust agreement or resolution securing bonds and notes; 
4.  Repairs, replacements and renewals.  Provide funds for paying the cost of all 
necessary repairs, replacements and renewals of the sewerage, drainage and treatment 
systems of the district; and 
5.  Payment of obligations.  Pay or provide for all amounts that the district may be 
obliged to pay or provide for by law including any resolution with or for the benefit of the 
holders of its bonds and notes. 
Notwithstanding any other provision of law, in the event a user of the district's sewer 
system fails within a reasonable time to pay the district's rates, fees or charges for sewer 
service, the district may disconnect water service to the user, as long as the disconnection 
is accomplished in accordance with procedures established in applicable law or rules 
governing disconnection of utility services and terms and conditions approved by the 
Public Utilities Commission. 
The district may become a qualified sewer district for purposes of Title 38, section 
1050 in accordance with subsection 4 of that section. 
Sec. 14.  Water rates; application of revenue; sinking fund.  An individual, 
firm or corporation, whether public, private or municipal, shall pay to the treasurer of the 
district the rates and other lawful charges established by the trustees for the water used or 
made available to it.  All water rates and other lawful charges of the district are governed 
by the Maine Revised Statutes, Title 35-A, chapter 61. 
The water rates and other lawful charges are established to provide revenue for the 
following purposes: 
1.  Current operating expenses.  To pay the current expenses for operating and 
maintaining the water system including depreciation; 
2.  Payment of interest.  To provide for the payment of interest on the indebtedness 
created by the district for the benefit of its water system; and 
3.  Sinking fund.  To provide each year a sum equal to not less than 1% nor more 
than 5% of the entire indebtedness created by the district for the benefit of its water 
system, which sum must be turned into a sinking fund to provide for the extinguishment 
of the indebtedness.  The money set aside for the sinking fund must be devoted to the 
retirement of the obligations of the district or invested in such securities as savings banks 
are allowed to hold.  The trustees may, in their discretion and in lieu of the establishment 
of a sinking fund, issue bonds of the district so that not less than 1% of the amount of the 
bonds so issued mature and are retired each year. 
There may be a lien issued on real estate served by the district to secure the payment 
of unpaid water rates and other lawful charges.  The water lien takes precedence over all 
other claims on the real estate, except claims for taxes and sewer rates.  The procedures of 
obtaining, enforcing and receiving payment on the water lien are governed by Title 35-A, 
section 6111-A. 
Sec. 15.  Incidental powers granted.  All incidental powers, rights and privileges 
necessary to the accomplishment of the objectives set forth in the Act are granted to the 
district. 
Sec. 16.  Debt responsibility of Town of Southwest Harbor.  The Town of 
Southwest Harbor is responsible to pay all debt service incurred on or after May 4, 2010 
by the district for capital expenditures and infrastructure expenditures.  All debt service 
existing prior to May 4, 2010, as well as any debt service incurred on or after May 4, 
2010 for purposes other than capital expenditures and infrastructure expenditures must be 
financed through respective water and sewer service charges of the district. 
For purposes of this section, "capital expenditures" means an outlay of funds for the 
acquisition or improvement of a fixed asset with an expected useful life of at least 20 
years that extends the life or increases the productivity of the asset and that is generally 
capitalized and depreciated over the estimated useful life of the asset.  For purposes of 
this section, "infrastructure expenditures" means an outlay of funds for the basic facilities, 
equipment, installations and appurtenances, such as distribution lines, needed for the 
function of the district and having an expected useful life of at least 20 years. 
Sec. 17.  Replacement of equipment; road openings.  Upon the reconstruction 
of any public roadway by the Town of Southwest Harbor, the district shall coordinate the 
replacement of any sewer or water lines, equipment, valves or hydrants that have reached 
their maximum useful life.  A rebuilt or resurfaced road may not be opened or excavated 
by the district except under emergency conditions, within 5 years of reconstruction or 
repavement of the road. 
Sec. 18.  Referendum; effective date.  This Act takes effect when approved only 
for the purpose of permitting its submission to the legal voters within the Town of 
Southwest Harbor at a referendum called for that purpose and held within 2 years of the 
effective date of this Act.  The election must be called by the Board of Selectmen of the 
Town of Southwest Harbor and must be held at the regular voting place. The referendum 
must be called, advertised and conducted according to the law relating to municipal 
elections.  The registrars shall make a complete list of all the eligible voters of the 
proposed district as described in this Act. The list prepared by the registrars governs the 
eligibility of a voter.  For the purpose of registration of voters, the registrars of voters 
must be in session the regular workday preceding the referendum.  The subject matter of 
this Act is reduced to the following question: 
"Do you favor merging the Southwest Harbor water department and the 
Southwest Harbor sewer department to create the Southwest Harbor 
Water and Sewer District and transferring all municipal water and sewer 
assets to the Southwest Harbor Water and Sewer District?" 
The voters shall indicate by a cross or check mark placed against the word "Yes" or 
"No" their opinion of the same. 
The results must be declared by the Board of Selectmen of the Town of Southwest 
Harbor and due certificate of the results filed by the clerk with the Secretary of State. 
This Act takes effect for all other purposes immediately upon its approval by a 
majority of the legal voters of the Town of Southwest Harbor voting at the election.  
Failure to achieve the necessary approval in any referendum does not prohibit subsequent 
referenda consistent with this section as long as the referenda are held within 2 years after 
the effective date of this Act. 
SUMMARY 
This bill provides for the creation of the Southwest Harbor Water and Sewer District 
and the transfer of all water and sewer assets of the Town of Southwest Harbor to the new 
district.