BAR HARBOR – Councilors voted at Tuesday night’s regular meeting not to extend the 180-day moratorium on residential subdivisions for three more months.

The moratorium was proposed by the planning board in September so that the town could establish policies on issues of density, weekly rentals, housing affordability, parking and wetlands protection. It will run out on March 5, more than three months before a special town meeting on June 13 where residents will vote on amendments to the town’s land use ordinances that have been developed during the moratorium.

Town Manager Dana Reed suggested to the council that accepting subdivision applications without knowing the outcome of the June vote might have negative consequences such as lawsuits or, at least, confusion.

“It would lead to quite a bit of confusion in the offices,” Reed said. “And it could expose the town to some liability for lawsuits.”

Councilor David Bowden was not in favor of granting an extension and said the moratorium itself existed in a legal “gray area.”

“There are people out there that have residential land they want to subdivide,” he said. “I think we’re putting the town in jeopardy for a lawsuit unless we lift the moratorium.”

Council Chairman Val Scott disagreed.

“I think personally that extending this another three months … is not unreasonable,” she said.

The council voted 3-2 against extending the moratorium.

Councilors did vote to place amended land use ordinances on the warrant for the June special town meeting on topics that include weekly rentals, regulation of wetlands and vernal pools, planned unit development for the village and outlying areas, and dimensional controls.

In other business, after a public hearing on the budget, the council voted to adopt the proposed budget, which will be recommended to the warrant committee.

The budget, if passed by the warrant committee and voters at the annual town meeting, would spend a total of $14.9 million for assessments, municipal expenditures and education. This would entail a tax rate increase of 8.1 percent over the 2006 fiscal year, which had a budget of $14.01 million.

“I think that the town of Bar Harbor is selling itself short,” Loren Hubbard said during the public hearing. “We at some point are going to have to dig our heels in and say that we have to get funding from the state.”

The council also voted unanimously to table for two meetings the issue of whether to split the planning board into two committees, in order to let planning director Anne Krieg gather more data from other communities.