NEW GLOUCESTER – Selectmen voted 3-2 Monday to spend up to $50,000 from tax increment financing to look for a water supply for Upper Gloucester Village on Route 100.

Those in favor were Steve Libby, Dale Maschino and Lenora Conger; opposed were David Lunt and A. Wayne Cobb.

The money will be drawn from a TIF district governing Pineland Farm.

The search for water is focused at the former New Gloucester Fairgrounds on Bald Hill Road. The site was home to horses for nearly 100 years and is across the road from a closed town dump. Tests on a well there showed presence of E. coli bacteria, which is found in feces.

The property is in the groundwater protection overlay district next to the Royal River.

Larry Zuckerman, chairman of the New Gloucester Zoning Committee, told the board that the plan to find a water supply was developed at recent meetings with Yarmouth Water District and Drumlin Environmental of Portland. Drumlin Environmental, which serves as hydrogeologists and engineers for the Yarmouth Water District, will lead the study.

Zuckerman said the firm handles the water supply to Pineland Farms.

“How does that impact developing the fairgrounds?” asked Selectman David Lunt, who has been active converting the horse training track and land into a town recreation site. “It’d be disturbed if we had a well in the center of the property. Look at the area adjacent and on the other side,” he said.

The study would be done in three phases:

• Baseline research of the fairgrounds site, estimated to cost under $5,000.

• A survey to determine the thickness of the aquifer soil, the depth to the water table and the depth to bedrock, for an estimated $10,000.

• Test wells drilled at a cost of $35,000.

If the site is favorable, it will allow the town and the Yarmouth Water District to proceed with designing the water storage and distribution system and determine legal and financial impacts of a New Gloucester water system, Matt Reynolds of Drumlin Environmental wrote in a memo.

New Gloucester has no public water or sewer systems. A business and economic study indicated business development in the village might be attractive if there was a public water supply.