Hartland seeks solutions to financial crisis

Posted Sept. 21, 2008, at 8:45 p.m.

HARTLAND, Maine — Hartland is a small, rural town in Somerset County with a single major industry — a century-old tannery — in addition to a population of just 870 and an average income of $29,900.

The Pride Tannery, owned for decades by Irving Tanning Co., is a sprawling behemoth in the downtown of Hartland, spanning both sides of Main Street and providing hundreds of jobs.

But now, a handshake agreement with state officials that Hartland selectmen say was never kept, along with a failure to assess enough tax revenue, has helped toss the town into a financial crisis in which it is about $1.2 million in debt.

Compounding the situation is that the town is without its longtime manager, Peggy Morgan, who is on medical leave for a serious illness. It’s the first time in almost 32 years that Morgan is not at the helm.

Without its manager, the Board of Selectmen has been left to seek its own solutions.

One of the most immediate issues is that SAD 48 is threatening to sue the town for more than $400,000 in school payments the town owes, and town officials are banking on a pair of loans to get them out of the hole.

Selectmen are talking about selling off everything they can get their hands on, including the current town hall, a former school, wood and equipment, as well as laying off three town workers.

Selectman Greg Tasker told more than 50 residents gathered at the town hall last week, “We have to get lean and mean.”

First Selectman Harry Gould agreed. “If we have a building that we aren’t using, we’re going to sell it.”

And if the loan isn’t approved? “I really don’t know,” Gould said. “We might have to send out a supplemental tax bill.”

One resident shouted out, “Have you looked at all the gray heads here?” referring to the senior-citizen age of most of those in the audience, many of whom may be on fixed incomes.

In a frank and open question-and-answer session with residents, Gould explained that Morgan was not guilty of any wrongdoing or mismanagement. If anything, he said, she was too compassionate. Gould said that Morgan did not want to raise taxes too high and may have misjudged the town’s financial needs.

“Peggy always underestimated our taxes because of how much she cares for the people of this town,” Gould said.

“This town did not spend any money that was not appropriated,” Gould said. “We are conducting an audit but no money was spent illegally. I’ll bet on that.”

Gould explained that the town’s entire debt, including the $400,000 owed to SAD 48, the county tax and other debt, totals $1.2 million.

“But we have the money for everything else, just not for the school,” he said. “If we were current with the school right now, we would not have to borrow any money.”

Gould said that a number of factors contributed to the financial mess. Irving Tanning, the previous owners of the tannery, declared bankruptcy twice, and the first bankruptcy cost Hartland $380,000, Gould said. “In the second bankruptcy, we had to abate $90,000 a year in taxes when normal abatements run a couple of hundred bucks. We did this for three years and that’s nearly $300,000,” he said.

In addition, during the second bankruptcy, the town had to come up with an additional $100,000 to help pay for a booster station for the treatment plant. The original agreement was for the tannery to pay 94 percent of the cost and the town to pay 6 percent.

Also because of the bankruptcy, the town is not allowed to reassess the tannery’s property until 2010.

Gould said the town is trying to get the state to stand up for a handshake agreement it made with Morgan in 2005, during the tannery’s bankruptcy.

According to the selectmen, a state official whom selectmen did not name told Morgan that if Hartland signed off on the bankruptcy, a $300,000 loan associated with closing a sludge landfill would be forgiven. Gould said the tannery jobs were saved but the loan was never forgiven.

Gould said he has asked state Sen. Douglas Smith, R-Dover-Foxcroft, to look into the loan situation.

The selectmen are taking two weeks to gather all the financial information and have set another meeting for 4 p.m. Monday, Oct. 6.

“I hope we’ll have some better answers and some good news,” Gould said.

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