YARMOUTH — The Yarmouth Water District will increase its quarterly rates 14 percent on July 1 to help pay for its new $2.25 million headquarters on Sligo Road.

It will follow an 11 percent increase in January 2011, which was the first increase since 2005, district officials said.

Still, the district’s nearly 3,000 customers in Yarmouth and North Yarmouth will pay among the lowest rates of 154 public water utilities in the state, according to a rate list provided by the Maine Public Utilities Commission.

A few Yarmouth residents attended a public hearing on the planned rate increase on Tuesday night at Yarmouth Town Hall. Some questioned spending and borrowing decisions made by the district’s superintendent and board of trustees.

“It’s not a great track record in recent years,” said Stacy Stevens, who is a Yarmouth Planning Board member. “I anticipate more increases.”

Stevens pointed out that the increase is “basically a done deal” unless customers submit a petition to the PUC signed by 15 percent of users – about 500 people – within 30 days of the public hearing.

The quarterly rates will increase from $32.83 to $37.43 per 1,200 cubic feet of water used, and from $47.60 to $61.91 per 2,000 cubic feet of water used. The rate is the same for residential, commercial, industrial and government users.

For average residential users who draw about 2,000 cubic feet of water per quarter, their quarterly bill will increase $14.31 and their annual cost will increase $57.24.

“It’s cheap water,” said Douglas Mitchell, a water utility consultant who has worked for a variety of water districts in Maine. Even with the increase, Yarmouth’s rates are among the 20 lowest in the state, Mitchell said.

Mitchell had recommended a rate increase of as much as 17 percent, but the trustees decided to risk a possible net loss of $15,000 in fiscal 2013 that may be covered by increased water use or new users.

Trustees noted that the district’s new headquarters replaced a cramped 1923 building on East Elm Street that the Yarmouth Historical Society plans to renovate as its new headquarters.

They also noted that this was a great time to build a new headquarters, in a down economy, when the winning construction bid was $250,000 below an engineer’s estimate and bonds to pay for the project were issued last month at 3.1 percent interest. The interest over the life of the loan will total $798,501, said Superintendent Bob MacKinnon.

MacKinnon said the district doesn’t anticipate a rate increase in 2013, but it will likely increase rates every three to five years going forward.

The district is planning for future system upgrades, including the recent purchase of surplus wells from the Portand Water District for $260,000.

The district, which has a staff of seven and a yearly budget of $1.5 million, was recently recognized by its peers as one of the best-run small utilities in New England, MacKinnon said.

Staff Writer Kelley Bouchard can be contacted at 791-6328 or at: [email protected]