MILLINOCKET, Maine — An attorney has advised the school board that the Town Council violated the Town Charter and state law when it dipped into the school system’s anticipated $512,000 budget surplus and allocating $250,000 from it to lower the town’s mill rate, the board’s chairman said Monday.
Robert P. Nadeau of the Bangor law firm Drummond Woodsum cited several sections of the charter in a three-page letter he wrote to Superintendent Sara Alberts on Oct. 27, the date the council officially voted 4-0 to move the money out of the school’s budget into the town’s undesignated balance fund.
“Another reason the council may not adopt an order amending the budget is that under state law the final validation of the school budget rests with the voters, not with the council,” Nadeau wrote. “The voters have validated the school budget at referendum held June 23, 2009. The council may not override the decision of the voters through council order.”
The school board will discuss the issue at its meeting at Stearns High School at 4 p.m. today, board Chairman Thomas Malcolm said.
“They can’t do it,” Malcolm said Monday of councilors’ reallocation of the funding. “That money had been set for school use, and that’s what it has to be used for.”
Nadeau’s letter and Malcolm’s statement mark the second time in two years that the council was accused of allocating funds it wasn’t authorized to take.
In 2008, East Millinocket and Medway leaders complained that Millinocket leaders had their town designated the Katahdin region’s new economic development agency, and received a $75,000 payment for it as part of an agreement with the owners of the town’s paper mill before the other towns knew of it, and without having discussed any plans for regional development.
State economic development officials ordered the money frozen until the three towns agreed to form a regional economic development board to ensure the proper allocation of the money, which happened several months later.
The council was aware of Nadeau’s opinion when it took its vote, Town Manager Eugene Conlogue said, but it had a verbal opinion given to it by Dean Beaupain, the town’s attorney, that such an allocation was legal.
“What was changed was the way the funds were budgeted, not the amount to be expended,” Conlogue said Monday. “There’s no [school] budget cut here. The money came out of the school department — not spending its authorized budget. My understanding is that the money belongs to the town of Millinocket.”
In his letter, Nadeau disagreed, saying that the money must remain under school board and department control regardless of whether it is used — a point made in two state statutes.
One statute, Nadeau said, reads “‘notwithstanding any other law, money allocated for school purposes may be expended only for school purposes,’” while the other states that school funding left unexpended at the end of a school year “‘shall be carried forward and credited to the [school] unit for educational programs for the en-suing year.’”
The $250,000, Nadeau wrote, could be used in the next fiscal year to pay school costs or to provide tax relief.
“Considering the dramatic reduction in state subsidy expected for the 2011 and 2012 fiscal years, it may be prudent to keep those funds to address school budget shortfalls in those fiscal years available,” Nadeau wrote.
Town Assessor Michael Noble set a new mill rate at 22.8 on Oct. 24, a drop in the town’s tax rate of 1.4 mills over last year’s rate. That means residents who own houses worth $100,000 would pay $2,280 in taxes on those properties this year, or $140 less than they paid last year, when the mill rate was 24.2 mills.
The first-half payments on the new tax year are due Nov. 20, town officials have said.