YARMOUTH, Maine — The private Chebeague Transportation Co. is moving closer to becoming a public transit district, despite meeting resistance from neighbors on Cousins Island.

Some Cousins residents fear a bill to create a public transit district, which would replace Chebeague Island’s current for-profit ferry system, could give the district power to take land and subvert town ordinances.

CTC and Chebeague Island officials argue they have no intention to do that, and say the potential speculation is misguided.

They said the transformation would allow them to more easily obtain grants to buy a new ferry and make the administration of the Chebeague transportation systems more efficient.

And although concerns about the bill, sponsored by Rep. Steve Moriarty, D-Cumberland, were thought to have been addressed after revisions were made, about two dozen residents came to a special Town Council meeting Monday night to oppose the legislation.

“I don’t understand why we need to shoulder the burden,” Cousins Island resident Kathleen Fitzgerald said, adding that neighbors of the ferry would be the only people directly affected by the potential consequences of the proposed legislation. “It can’t just benefit one island.”

The legislation is a special and private law specific to the Chebeague ferry. It would create a similar structure to that of Casco Bay Lines in Portland.

An early draft of the bill simply added the word “waterborne” to the existing law governing public transportation, because currently only land-based vehicles are covered under the state statute.

But, after meetings between stakeholders and area legislators, the bill was amended to explicitly deny a district the powers of eminent domain in Yarmouth and would require it to comply with the town’s ordinances.

The latest draft of the bill, LR 705, goes further and defines the governance structure, states that it must adhere to Yarmouth ordinances and restricts the powers of eminent domain to Chebeague Island alone.

Ironically, the bill submitted by Moriarty that now worries neighbors was actually drafted by Brian Rayback, an attorney who formerly represented one of the neighbors opposed to the district forming.

Despite the new language in the bill that ostensibly answers residents’ concerns, some Cousins Island residents say the bill shouldn’t be considered at all because of fears of what might happen in the future.

“My issue is that we don’t need another government entity,” Cousins Island resident Mike Gentile said. “I worry about a bill that goes to the Legislature and we lose track of it. … This is an eternal vision. We’ll have to stand and watch this bill forever.”

Moriarty dismissed claims the bill would get lost in the shuffle or altered dramatically without public notice.

“Bills don’t pop up anymore,” he said. “Maybe in the pre-Internet days, but this bill did not pop up. The notion that something could be brought up as an utter surprise without notification is frankly not realistic.”

The primary reason for forming the district is to give Chebeague Island more options to obtain grants, according to town officials.

Last October, the CTC board voted to convert the company to a nonprofit. The conversion, which is still being processed, would give the company several advantages, including tax-exempt status, the ability to receive tax-exempt donations and the ability to apply for specific transportation grants.

Although they could receive grants without becoming a government entity, a larger, more substantial grant from the Federal Highway Administration for ferry boat discretionary funds requires the ferry to be a public agency, said Carol Sabasteanski, general manager of the CTC.

“Our goal in this bill was simply to enable us to apply for federal funds to build a new ferry, but obviously people wonder where it might lead,” she said. “I don’t know how to address that. All we want is a new ferry.”

Sabasteanski said a new ferry would likely cost about $1.5 million.

James Cohen, an attorney for Cousins Island resident Nancy Blanchard, said in addition to the funding, the question of why powers of eminent domain are needed at all is unanswered.

“Not a single ferry district in Maine has powers of eminent domain,” he said, noting that if this bill is adopted, local authorities lose control and future decisions will be left up to the state.

If the ferry becomes a public transit district, only Chebeague Island residents would have control over its board, according to the proposed legislation.

In general, neighbors fear a repeat of an eminent domain lawsuit in the late 1990s that was argued all the way to the Maine Supreme Judicial Court, which ultimately ruled in favor of the taking of a Cousins Island resident’s land.

In the early days of the ferry system, a Chebeague Island resident used his lobster boat to ferry people to and from the island. But as the program grew, the ferry needed parking for Chebeague residents. A Cousins Island landowner, Winifred Blanchard, provided the space by renting out a portion of his land. This agreement continued for about 30 years.

But when the land was transferred to Blanchard’s daughter, Nancy Blanchard, she decided to no longer lease the 1.4 acres of parking to CTC and did not renew the agreement.

At the time, Chebeague Island was part of Cumberland and residents had access to an additional satellite parking lot in town, albeit serviced by a shuttle bus, while the Blanchard lot was only a short walk from the dock.

The CTC argued it needed the land and took the issue to the Department of Transportation, on the basis that the land was necessary for maintaining Chebeague Island as a year-round residential community of about 350 residents. DOT agreed after conducting its own studies, and took the land using eminent domain in 2000, according to court documents.

A legal battle ensued, eventually reaching the state Supreme Court in 2001.

In 2001, the Law Court ruled 4-3 against Blanchard, with the majority agreeing that the state had a right to take the land because it was vital for public transportation.

Some residents are afraid something similar could happen again if the ferry system decides to expand in the future.

Chebeague Island and ferry officials said they understand the concern, but maintain they only want the district designation for fundraising.

“I swear on a stack of bibles there is no ulterior motive,” David Hill, Chebeague Island Board of Selectmen chairman, said Monday. “It sounds selfish, but we only want to do this so we can get funds to replace our 25-year-old vessel and preserve our fare structure.”

Moriarty’s bill is still at least a few weeks from a hearing and only Tuesday became an official legislative document.

Although the decision on the bill rests with legislators in Augusta, the Yarmouth Town Council will take up the issue in the coming weeks and vote to decide if they want to endorse the legislation.

“I think we heard from many neighbors who expressed very clear concerns about the proposed legislation,” Blanchard’s attorney, Cohen, said, “and their hope is that the council will adopt a resolution to oppose the legislation in Augusta.”