PITTSFIELD, Maine — A municipal auditor told the Town Council on Tuesday night that despite the sour economy, Pittsfield is in good financial shape.
A string of frugal budgets and the maintenance of a $900,000 reserve account have positioned the town well to ride out what auditor Ron Smith, managing partner of the firm RHR Smith and Co., predicted would be a harsh fiscal reality in the coming year.
Smith’s audit, which covered the 2009 calendar year, found that the town finished the year with a slight operational excess and enough money stored in reserve accounts to run the town for two or three months if need be.
“You do just about everything a town can do in this state to survive financially,” said Smith. “Pittsfield is a very frugal town. You have put yourself in a good position financially to weather the storm.”
However, the town’s fiscal health won’t spare it from a very difficult 2012 budget year, said Smith, who predicted that most sources of revenue — particularly those from state government — will continue to deteriorate. To improve the situation slightly, Smith recommended that the town consider refinancing some of its out-standing bonds to save money on interest over the long term. He said one weak spot is the town’s sewer district, which faces a daunting maintenance backlog and has some of the lowest rates per capita in all of Maine.
“You don’t have enough sewer surplus to answer the telephone if there’s a disaster,” he said. “That’s one area you could do better.”
Town councilors reacted happily to Smith’s report.
“It’s been very tough and we’ve had to make some hard decisions, but this is a good audit,” said Mayor Timothy Nichols.
In a separate but somewhat related move, the council decided not to apply $61,518 from the town’s unappropriated surplus to lower the tax rate, opting instead to use the money to replace lost revenues in the next budget cycle.
Town Manager Kathryn Ruth said the town’s tax rate likely won’t be set until sometime in August because county government has yet to set its budget. County commissioners are negotiating with the state over a provision that would save the county some $450,000 in the corrections budget, but the state is not scheduled to make a decision until later this month at the earliest.
As a worst-case scenario, Ruth estimated that the town’s new property tax rate would be set at $17.80 per $1,000 in valuation, which is an increase from the current mill rate of $16.30 per $1,000 of value. She said tax bills probably would be mailed to residents in late August.
In other business, the town awarded a $1.5 million sludge removal contract to Mobile Dredging and Pumping Co. of Chester, Pa. The project is necessary to remove some 30 years of sludge build-up in the town’s sewer system. Because of favorable rates offered by Mobile Dredging — $383 per dry ton — the council decided to expend the full amount that has been borrowed for the project, which would remove 3,500 tons of sludge. It is unclear how much sludge exists in the town’s two sludge lagoons, though some councilors were hopeful that this project would take care of all of it.