About 1,700 households in Anson and Madison will soon see their water bills increase by almost 50% after local water utility officials approved raising water rates to pay back new debt.

The new rates, effective Oct. 6, will increase the average two-person household’s annual water costs by about $240 and a four-person household’s costs by about $400 — a jump that some residents said they cannot afford during a public hearing Thursday.

“I’m not sure how aware the board is of senior citizens and those on low income,” Anson resident Emily Quint said Thursday. “I know people who have their water shut off. They aren’t paying you anything, it’s shut off. And we have people that go to the cemetery and get drinking water. Now, how long do you think that’s going to go on when this rate goes up? I say it’s going to get worse instead of better.”

As of December 2023, more than 2,700 people in Anson and Madison received a fixed income from Social Security, and the U.S. Census Bureau reported that both towns have higher poverty rates than both the Somerset County and Maine average.

During a public hearing Thursday at the Old Point Avenue School in Madison, Anson & Madison Water District officials told more than two dozen residents that the increase comes primarily from a $6 million loan taken on in 2023 to pay for critical infrastructure improvements.

The loan funded improvements on the only pipe connection from Hancock Pond, the district’s drinking water source, to most customers. Jim Lord of Dirigo Engineering, the firm that designed the project, said Thursday that without those improvements, the majority of customers in the district were at risk of losing service altogether.

The district also received about $3 million in federal grants for the project and managed to secure a 1.25% interest rate on the loan. Because interest rates began to increase rapidly immediately afterward, the quick action of the district to secure the loan saved residents up to $5 million in interest payments, Lord said.

“Everybody knew at the time, interest rates weren’t going to stay low forever,” Lord said. “They just don’t.”

Now, with the district beginning to make debt payments, some ratepayers asked district officials why they didn’t slowly increase rates over the past several years to ease impact, knowing that the loan would need to be repaid. Annual rate increases had not exceeded 3% since 2018.

“You had to know this kind of situation was going to come,” resident Dan Tucker said. “I think it would’ve been a lot easier for everyone to swallow had you given a little more increase there throughout the last three years to take a little edge of the bite, instead of all at one time, when everything has exploded, when you go to Walmart or Hannaford and you come out with one bag and it’s cost you $78.”

But state regulations prevent a quasi-municipal organization like the Anson & Madison Water District from raising more revenue than it plans to spend in a year, leaving residents with a massive increase when the district needed to begin paying back the $6 million loan.

“With the benefit of hindsight, do I wish we collectively had done incremental increases that were more substantial? Absolutely,” said Jeff Lloyd, a Madison representative on the water district’s board of trustees. “I think the boards that were making those decisions at the time were doing what they thought was the best for the people they represented. Here we are. It’s time to belly-up to the bar.”

Lloyd said district officials will keep this year’s increase in mind during future financial discussions. He said the district plans to spread out future debt service and line maintenance to minimize one-year increases of more than a few percent.

Organizers of a petition to halt the increases need 265 signatures from water district customers to submit an appeal of the rate increase to the Maine Public Utilities Commission.

If the petitioners gain enough signatures by Oct. 5, the commission will suspend the rate increase and hold a hearing to determine if the change is “just and reasonable.”

But the PUC likely won’t accept the residents’ appeal, Kirsten Hebert, the executive director of the Maine Rural Water Association, said during the public hearing. The district, which contracts the Maine Rural Water Association to run its operations, raises only what it needs to spend, and no more, Hebert said.

“They will look at the expenses, they will look at the budget, they will look at your debt service, and then they can wiggle with the rates,” Hebert said. “But ultimately, the Public Utilities Commission is going to allow this district to have the money it needs to cover its expenses.”

The water district’s rate increase did not include a full account of its asset depreciation, meaning the commission could actually increase the rate even more, Hebert said.

Daphne Paulette, a financial circuit rider for the Maine Rural Water Association, said the district would be able to build payment plans with residents who might struggle to pay their bills on time. Both Anson and Madison also offer general assistance programs that may also be able to offer financial help, she said.

“If you don’t communicate with us and say, ‘Geez, can I pay $40 a month instead of giving you (more) — sure,” Paulette said. “You just got to let us know you’re doing it. You need to have that communication between the customer and us. And we’ll work with you, we’ll work with anybody. We don’t want to shut anybody off.”

Copies of the petition are available at the Madison and Anson town offices, as well as Casey’s Market in Anson and Vicneire’s Elm Street Market in North Anson.