BAR HARBOR — A lawsuit by property owners Jonathan Eno and Karen Gilfillan Eno challenging the town’s annual $250 vacation rental registration fee was transferred last month to the Business and Consumer Docket of Maine Superior Court, according to court documents.
The complaint was originally filed in Superior Court on July 29 by the Bangor law firm Farrell, Rosenblatt & Russell. The town is represented by Rudman Winchell in Bangor.
At the time of the court filing, the Enos were residing in Hope. Their Bar Harbor home had been for sale since 2017, originally listed for $2.7 million, according to Coldwell Banker Homes website. Still on the market, the property is currently listed at $2 million.
According to a letter sent from the Enos’ lawyer to Town Manager Cornell Knight two months ahead of the court filing, the Enos had been renting their Bar Harbor property “sporadically on a weekly or greater basis, as allowed under the Land Use Ordinance.”
The May 16 letter alerted Knight to the Enos’ intention to pursue court action over a Town Council’s decision last December to raise the vacation rental permit fee from a one-time $50 fee to an annual $250 fee.
“This action violates Maine law,” the letter stated, “as the fee charged is not measurably related to the cost of enforcing compliance with the permit requirements.”
According to the official complaint filed in July, the Enos asked the court to “declare the vacation rental registration fee illegal, void, and of no legal effect” on account of revenue from the fees exceeding “the anticipated cost of enforcing the Ordinance by a factor of more than four to one.”
This four-to-one ratio was based on a discussion during a Dec. 18, 2018 Town Council meeting, where councilors discussed the new annual fee raising an anticipated $120,000. At the time, enforcement costs were expected to be about $28,000, the amount the council set aside to pay a vacation rental ordinance enforcement company such as Host Compliance.
Town Attorney Ed Bearor wrote in a June 18 email that “the town is currently devoting significant resources to the situation … and that the fee is not unreasonable.”
One new cost added to the town budget was a new assistant planner position at a cost of $55,000, approved by voters at Town Meeting in June 2019. The new position was created to take some of the workload off of Planning Director Michele Gagnon by focusing on vacation rentals.
According to Gagnon, one of the duties of the assistant planner, Steve Fuller, is to compile vacation rental data. This includes creating a map to show where registered units are, and searching platforms where short-term renters advertise, to find unregistered units. “Steve is strong in that: organizing, tabulating, presenting data,” she said in an August interview with the Islander.
Knight said in August about Fuller’s position that the budget increase was offset by an “increase in revenue estimated from vacation rental fees, so it did not affect the property tax.” In the future, the position will be included in the budget so it “is not affected if rental fees fall short,” he said.
The court case is pending now in the Business and Consumer Docket, and Knight expects it could take years to resolve.
A previous lawsuit from 2017 in which the Enos, with James Blanchard and 18 other plantiffs sued the town over a zoning change, is still being contested, according to Knight.
“They lost in the Business and Consumer Court and appealed to the Maine Supreme Court, which is deliberating the case now,” Knight wrote in an email to the Islander last week. That lawsuit, Knight noted, “has cost the town $45,000 in legal fees so far.”