HARTLAND, Maine — The town’s financial crisis has reached a level where bankruptcy is a real option and town officials will meet with Gov. John Baldacci today to seek help.
At the annual town meeting Saturday, more than 100 voters approved $1.3 million in spending to keep operating for another year, but also learned that efforts to restructure the town’s overwhelming debt are hinging on backing from the state.
Hartland is more than $864,000 in debt and attempting to borrow an additional $650,000 over a 10-year period to fix budget errors. The debt was incurred because Hartland officials failed to budget enough revenue to cover expenses.
Over the past year the town has eliminated five town positions, moved its operations back into the former town office building, put the Hartland Academy building up for sale, sent out a supplemental tax bill, and sold wood from the town’s land to try to offset the debt.
Town Manager Larry Post said Saturday one bank has agreed to provide the town with a loan but is requiring a state guarantee because of the seriousness of the town’s financial situation.
The meeting with Baldacci is also needed to obtain the “state guarantee” as requested by the bank, Post said. He said that he was optimistic about the loan proposal and that tax increases would be the last resort.
Town officials recently discussed the possibility of bankruptcy, according to selectmen, but were unsure if the action was legal.
Selectman Chris Littlefield warned voters Saturday that the proposed budget did not include the town’s debt. “We’ve got some real tough decisions to make,” he said.
Littlefield said that when Irving Tannery — now Prime Tanning — went bankrupt in 2005, the town absorbed a great deal of debt.
“I feel it is unfair,” he said. “Hopefully, we can get some concessions from the governor.”
One bright spot at the meeting came when voters learned the proposed $1 million in school assessment taxes was dropped to $805,000. This one move meant there would be no tax increase in the municipal budget, Post said.
For the most part, Hartland voters opted to go with the budget committee recommendations, which were about $10,000 below those offered by the Board of Selectmen. In the end, the overall budget accepted was about 5.5 percent higher than last year’s.
The five largest expenditure areas included severance pay for former Town Manager Peggy Morgan, who was at the helm when the revenue miscalculations were made. Morgan, who served as Hartland’s town manager for three decades, has been seriously ill and was on a medical leave of absence when the revenue errors were discovered.
To help find their way out of the financial crisis, selectmen hired Larry Post, former St. Albans town manager, first on an interim basis and then as town manager.