Are non-profits paying their fair share in Bar Harbor? Answer: It depends on which non-profit

Other news: more headaches for SWH Main Street project; No solution for Tremont power grid in near term

BAR HARBOR, JULY 8, 2023 - How did Jackson Laboratory become the poster child in the backlash against non-profits as the town grappled with its double-digit tax increase this spring?

JAX was the most frequently cited lightning rod in the roiling debate over non-profits and their use of town services without adequate compensation.

The magnitude of the problem was laid out by town assessor Steve Weed:

“The total taxable real estate value in 2022 for the Town of Bar Harbor was $2,119,689,500. Adding in the tax-exempt properties, that value goes up to $3,179,640,200. That means the Town of Bar Harbor has approximately $1,059,590,700 of property value that is claimed as tax exempt.”

The irony is that JAX is one of the major funders of town services, in areas most would not expect.

It is scheduled to pay $118,000 in property taxes this fiscal year, a 37 percent increase from FY23, according to its spokesperson.

Under state law, non-profits must pay property taxes on housing for employees. JAX is completing several major projects to provide affordable housing for staff, including the purchase of a house for its president in April.

In addition, JAX is budgeted for $117,000 as payment “in lieu of taxes.” That’s a total of $235,000 in revenue for the general fund.

But this pales in comparison with the lab’s water bill. The lab is by far the town’s largest consumer of water and sewer for which it said it paid $801,636 in Calendar Year 2022. That was not a typo. It also paid $43,292 in building permits, its spokesperson stated.

“They use a lot of water,” said interim Town Manager Sarah Gilbert.

Of the top 10 water and sewer consumers, five were hotel owners who paid a total of $519,493 combined - far less than JAX.

(The town is actually the second largest customer of water for the elementary school, parks, buildings and hydrants. It paid the general fund $637,206 for water and $22,611 for waste water in FY22.)

In February, Warrant Committee member Eben Salvatore proposed that Jackson Labs pay the town $2 million a year for 20 years to fund the new building at Conners Emerson School, referencing only its PILOT contribution of $115,000 in FY23.

Salvatore is a hammer always looking for a nail. As the controversial manager of Ocean Properties’s hotel and waterfront businesses, he led the lawsuit against the town’s ordinance capping cruise ship visits. It’s always a zero-sum game with him and his employer, the Walsh Family.

That his proposal was absurd on the face of it did not seem to faze him. The town has no authority over any non-profit to demand such a rich payment, or any payment. The PILOT program is voluntary.

Member Caleb Cough objected to aiming “an arrow” at a specific, named non-profit in town. Salvatore’s proposal, along with a call to create a working group to target non-profits, was not supported. The committee pushed the matter to the council.

No one mentioned that JAX’s annual contribution to the general fund was seven figures. Most likely, few in the room even knew.

Former MDI Superintendent Rob Liebow told me once that Jackson Labs’s biggest contribution to the town was not money but the sons and daughters of science- and math-craving households who help make Conners Emerson consistently one of the top ranked schools in Maine.

The debate around non-profits has focused only on property taxes, but the general fund does not discriminate against the source of the money.

Salvatore made no mention of any other non-profits by name. Acadia National Park, which contributes only $42,000 annually to the town, got a free pass. The park is the single biggest draw of tourists for the local hotel industry.

He also did not mention College of the Atlantic, which gives a paltry amount, $8,500, which is more like a tip than a contribution. COA also paid $55,872 in taxes for FY23 for housing in town and $53,874 for water and sewer. Critics pointed out that COA was simply making whole the taxes on properties it purchased.

COA stands out because its contributions have been static for years despite its exceptional performance financially. (I am a donor to COA, especially during President Darron Collins’s annual 24-hour appeal.) Even the Housing Authority chips in more PILOT money than COA - $37,000 for this fiscal year.

In a little over a decade COA’s endowment grew four-fold, to more than $80 million in 2021, before dipping slightly with the stock market downturn.

COA and the park service also rely on town services much more than any of the other large non-profits.

“COA doesn’t have its own police, so it uses ours,” said one Warrant Committee member. “Bar Harbor ambulances are often the first to respond to any incident in Acadia National Park. Our taxpayers are footing the bill for too many such non-profit services.”

Perhaps the town can take a page from the Walsh Family playbook and create a task force to target hotels, restaurants and other businesses whose inordinate use of town services disadvantages residential taxpayers who foot the lion’s share of the cost to support them.

Business-friendly town councils kicked the can down the road for 20 years when they happily ushered in unchecked hotel growth without adequately funding waste water abatement, adding thousands of toilets which are flushed during the most likely time of the year for a deluge.

They quietly deferred that investment to another generation.

“Every system has a capacity to it, based on piping that’s currently there,” said Maine’s senior environmental engineer Mike Riley. “When you add more sources of wastewater and you try to convey it through that existing piping, there's a limit to how much you can add before you start causing problems.

“So if you added a big hotel and put out 10,000 gallons a day a wastewater the town would have to come up with a project that would remove 10,000 gallons of stormwater by rewinding a leaky pipe or separating out the catch basins or separating out private connections.

“When we have a huge summer influx of people, that's obviously going to increase the wastewater that your system is handling.”

Bar Harbor is one of 31 municipalities in Maine’s abatement program for “combined sewer overflow” because its sewers are ancient and do not separate out storm water. Also, Frenchman Bay is more sensitive to overflows because it does not flush well.

The most critical area is the West Street pumping station because its overflow empties into Eddie Brook, said Riley. “A higher flow going into that pump station has caused that to be the most active or certainly the most serious situation because you're dumping in a small stream as opposed to in Frenchman's Bay.”

That is the area of the highest concentration of hotels.

The economics in Bar Harbor has always favored development over residents.

When a hotel is built in Bar Harbor, the developer is obligated to pay only for the connection to the sewer system. Any expansion to handle the increased inflow to the system or “augmented capacity” is paid for by taxpayers equally.

Bar Harbor is now in the middle of a $43 million program to rebuild much of the waste water infrastructure. But as council member Joe Minutolo said more than once, “The guy on Ledgelawn doesn’t need a 36-inch pipe” referring to the huge cost residents will be shouldering to support hotel usage.

A similar case may be made for garbage disposal which now costs the town $1 million a year.

The towns of Hampden, Belfast, Orono - just to name three - have much bigger populations and yet generate far less municipal solid waste than Bar Harbor.

The Municipal Review Committee, the omnibus agency which manages MSW from 115 towns, estimates that Belfast with 7,000 year-round residents produces 700 tons of waste a year, whereas Bar Harbor with 5,500 residents generates 5,056 tons.

Of the 115 MRC towns, Bar Harbor is the third highest producer, next to Bangor and Brewer. Read the list here https://www.mrcmaine.org/waste-data/. It leads all towns with the highest per capita output of 1,839 pounds a year.

The garbage subsidy is another example of how the tourism trade rides on the backs of local taxpayers. On Dec. 20, 2022 Gilbert first warned of the spike in cost to manage MSW during the tourism season. By then it had become obvious that the 2021 record tourist season was no fluke and that 2022 produced similar volume.

Food waste is responsible for 8 percent of total greenhouse gas emissions worldwide. And according to ReFED.org, the restaurant industry in the United States generates 11.4 million tons of food waste annually. (Attention, COA!)

One way to mitigate the burden on taxpayers and the planet is to impose a fee on waste exceeding a certain weight. The average household in the US generates about 7,000 pounds of trash a year. Anything above that could pay a surcharge. That would encourage less waste and put the burden on the heavy producers.

Many municipalities have such fees. But they tend to be towns where the local government is not so fearful of a single industry.

Like many of Bar Harbor contretemps, the truth is buried somewhere in the nuanced, self-serving and deliberately obfuscating numbers and facts which only serve to polarize the community as it has for about two decades.

The new Town Council will be tested to see if it possesses the leadership and courage to rise above such pettiness.

The early signs are not encouraging. Val Peacock 2.0 is very much like Val Peacock 1.0. The council chair allowed a brazen defiance by American Cruise Lines to disregard the town’s orders not to anchor here. There were no fines, no penalties, only a requirement that the cruise line pay the passenger fee expected of any cruise ship which disembarks passengers. Several council members said they were not consulted.

The town muffed a huge opportunity to generate some serious parking revenues after a hard-won battle by State Rep. Lynne Williams for the state to allow the town to use the money for the broadly defined “infrastructure” costs.

Earl Brechlin, who served as communications director for Friends of Acadia, made sure the parking revenues would stay suppressed, clearly guarding the interest of land-based tourism, just as Jeff Dobbs did on the previous council.

Brechlin succeeded in keeping the parking fines at $40 a day instead of $60 as recommended. Parking demand in Bar Harbor is among the highest in the world. In New York City, it’s not uncommon for parking to exceed $80 for 24 hours.

Brechlin was also the lone member to vote against the overall, paltry increase for parking as recommended.

I worked in New York City for 20 years where non-profits - universities, museums, charities, health care centers, hospitals, artists and musicians - coalesced with private equity, finance behemoths, media empires, real estate tycoons to create spaces and opportunities for everyone.

Bar Harbor is just the opposite. There is no room for all. This is a community of winners and losers.

A trial in front of a federal judge next week is the cherry atop this explosive cocktail, but that’s a story for another day.

If you wish more detail on payments in lieu of taxes by non-profits in town, read this excellent compilation in Bar Harbor Story.

More roadblocks, uncertainty in SWH’s decade-old sidewalk project

By Lucie Nolden, QSJ intern

SOUTHWEST HARBOR - A project that has been in the works for more than a decade faces another steep obstacle: three or four utility poles belonging to Consolidated Communications, which will almost certainly have to be removed before successful completion of the section of sidewalk and shoulder that stretch between 422 Main Street and the Village Condos at Oceans End. 

Town Manager Marilyn Lowell said Olver Associates, the civil engineering firm contracted for the project, is trying to unravel the problem that no one, except for Consolidated Communications, may remove the wires from the poles.

But it’s not clear communication is actually Consolidated’s specialty. “That’s something the auditors are working on,” Lowell says. “They call just about every single day.”

The project is slated for completion in 2024, but has been on the horizon since at least 2012. That year, Southwest resident Keith Briggs asked then-Town Manager Don LaGrange about permitting requirements to rebuild a granite retaining wall abutting Main Street.

LaGrange told Briggs to hold off on the project, because the wall would be rebuilt anyways “when the sidewalk gets installed.” Back then, the sidewalk project had been, “quote, shovel-ready,” and LaGrange had the funding in place to get to work.

Flash forward to 2023, and although the first phase of construction has been completed, Consolidated’s telephone poles stand in the way. Briggs in particular has been frustrated by the pace of the project.

“So it doesn't seem like anybody knows who to even put pressure on to get these poles,” he said. Without the removal of the poles, he postulates, the future of the project appears to be cast into jeopardy. The construction crew thus far has worked around the poles, but if the replacement of the storm drain and other utilities underneath the sidewalk is to be completed, Consolidated must take them down.

“They're not gonna be able to really get the grading done for the sidewalk. If you go pole by pole, you'll see some, in some places the ledge rock is worse than others. And deeper than others,” Briggs says. “So yeah, they're in the way.”

More than 10 years and two town managers have passed since the sidewalk was declared “shovel-ready.”

LaGrange resigned from the office in 2017, to be succeeded by New York State native and former tax assessor Justin VanDongen, who was fired two-and-a-half years later, just months before the completion of his three-year contract.

Was it the revolving door of the managers’ office that delayed the project for so long? At any rate, the longer the sidewalk project has remained on the table, the more work has been added to the docket. Rather than simply building the sidewalk, the town’s work now involves replacing the water, sewage, and storm drains below. Each piece of six-inch utility pipe has been slated for replacement with 12-inch pipe.

Such work has proven more complicated than Olver had initially planned. When work on the project was begun earlier this spring, Olver had identified nine utility lines underneath the area being excavated for the project, to be replaced with a larger pipe size. During construction, an additional seven lines were discovered. The work plan created from the site surveyance, therefore, had to be updated, leaving more work for the contractor, R.F. Jordan of Ellsworth.

The original nine pipes have been replaced as a part of the first phase of work, but the seven that remain under the sidewalk are yet to be replaced. Three more phases of the construction are in the plans: a Fall 2023 phase, a Spring 2024 phase, and a Fall 2024 phase. However, between the remaining utility services in need of replacement, the utility poles that stand in the way, and understaffing on the part of the construction crew, it remains to be seen whether the project will stay on schedule. 

“Unfortunately, the way this project is starting and stopping, we’re going to be getting a new schedule from [the construction firm R.F. Jordan],” Lowell said at last week’s Select Board meeting. “When they started out this year, they had some other jobs that were taking longer, so they didn't have the staffing to put at it as much as they wanted this first phase. So I expect they're going to be working with more crew when they come back in the fall.”

Until the project is completed, the state of the partially completed sidewalk and shoulder continue to pose danger to pedestrians, bicyclists, and vehicles that pass through the busy section of road that serves as the gateway to Tremont. Between shoddily graded terrain, loose rock, scattered sections of sharp curb, and the telephone poles, navigating the section is dicey, and requires both caution and good fortune in equal measure. 

Not to mention, the current state of the sidewalk makes the section of road unnavigable for many people with disabilities. The Americans with Disabilities Act requires a minimum sidewalk width of thirty-six inches, in order to accommodate wheelchair users, and the path must be free of trip hazards or uneven slopes or textures that could pose dangers for people with ambulatory disabilities. 

On the bright side, despite the roadblocks, the project’s funding is at least safe. The town of Southwest has a reserve to support the replacement of water and sewage lines, so if there isn’t enough funding in the bond for the project, money from the reserve can be used to supplement. More good news may be yet to come: Senator Susan Collins requested $2,415,00 in the 2024 fiscal year budget to support the Southwest Harbor Public Works Facility project, which will support upgrades to the town garage and wastewater treatment facility. Lowell is hopeful that the budget line will prevail.

“I'm going to have positive thoughts until I don't. I'm hoping that we made a good decision there. We'll work out … how we can deal with some of their requirements,” she says. “I think it's if we could get that money, that would be a win win.”

Tremont is at center of struggle for reliable power service in rural Maine

Aging equipment outside of Tremont town offices

TREMONT - The winter storm which knocked out power for days last Christmas may be a preview of more such bad episodes to come.

This town is on the short end of a wobbly power grid operated by Versant Power. It doesn’t even have its own substation. Instead the system is strung together by aging equipment called regulators hoisted on a pole outside of the town office building.

It could take years for Versant to bring acceptable reliability to this end of the island.

Some of it is out of Versant’s control as the supply chain for modern transformers hit the breaking point in 2021 as extreme storms and wildfires destroyed hundreds of transformers at a time, steadily eating into utilities’ stockpiles of the machines.

That leaves even fewer to go around now that the U.S. is finally gearing up to upgrade its power grid, more than one-quarter of which - like Tremont - was built at least half a century ago.

“This is a national and international problem,” said Versant communications manager Judy Long.

“There's been so much storm damage and so many people looking to upgrade equipment in order to integrate more renewable resources onto the grid. That coupled with what happened during the pandemic and all the supply chain disruption.

“Transformers that we used to be able to get within a few weeks, we began to have to wait a few months. And now some of them, they're not even giving us dates for when they can get us transformers.

Versant is hoping for some temporary fixes but even those could take years.

“What we're doing is all the prep work, the line work and figure out where we're going to put what we get further along in the planning process.

“The town is currently served by what we call regulators, which look like very large transformers. We want to replace those regulators with a pad-mounted transformer that we also have space to put a mobile substation if we needed to bring one in.”

But Long said that isn’t scheduled to happen until 2024 and even then the timetable may change. She said Versant will first do some “line work” this fall.

Maine’s top two utilities have the worst reliability ratings in the country, according to JD Power.

Central Maine Power, which delivers electricity to most of the state, was ranked last in the 2021 J.D. Power national customer satisfaction survey. Versant fared slightly better, but ranked last in the region for mid-sized utilities.

Safe, reliable electricity has never been a priority for Versant, Bar Harbor council member Gary Friedmann stated in a letter to the Islander on March 31, 2022.

He pointed out that Versant is owned by the city of Calgary in Canada whose sole interest is to “return a handsome profit to Canada.

“And Maine’s Public Utilities Commission works hard to help them earn close to a 10 percent return on investment.”

That amount was $82 million last year, according to Pine Tree Power, the organization Friedmann helped start to seek a public takeover of Maine’s two major utilities, Versant and Central Maine Power, on the statewide ballot Nov. 7,

“An Act To Create the Pine Tree Power Company, a Nonprofit, Customer-owned Utility” asks:

“Do you want to create a new quasi-governmental power company governed by an elected board to acquire and operate existing for-profit electricity transmission and distribution facilities in Maine?”

“Taking over Versant with a consumer co-op allows us to buy our poles and wires with more favorable financing rather than rent them from foreign owners at exorbitant rates,” Friedmann stated.

“The same customer service representatives and linemen would be answering the phones and restoring power after storms, but they’d be working for us, not for the city of Calgary. And Maine’s consumer-owned utilities, serving tens of thousands of customers at Eastern Maine Electric Cooperative, Houlton, Van Buren, Kennebunk Power & Light and Madison Electric Works all have better reliability than Versant – at rates 35 percent to 75 percent lower.”

The promise from Versant to install mobile solutions next year in Tremont is just that - a promise - as it weighs such investments against the profit it sends to Canada.

In case you missed this:

An audio postcard to future generations:

A researcher is documenting all the bird species at Acadia National Park in Maine, creating a baseline for changing populations. (Story aired on All Things Considered on June 28, 2023.)

And there is this album of my photos from my safari to Botswana and Timbavati Reserve outside of Kruger National Park in May when I shot more photos of birds than of large animals.

https://photos.app.goo.gl/5F2YqDHiYBsZeRDx7

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