Millinocket rejects settling $216,000 dispute with LePage

Posted May 10, 2012, at 8:34 p.m.
Last modified May 11, 2012, at 5:57 p.m.
Paul LePage
AP
Paul LePage

MILLINOCKET, Maine — More than an hour of torturous debate ended when the Town Council voted Thursday not to settle a dispute with Gov. Paul LePage over $216,000 in withheld state funds.

With the vote, the council decided to not yet accept $504,000 in Sudden and Severe Impact funds, which are paid to communities to help them offset severe property tax losses. Councilors again put on hold a decision to sue the state, which they have been considering since early March.

If the measure had passed, councilors would have agreed to forego the legal pursuit of the total payment of $720,000, which LePage said he ordered withheld because he believed town officials had broken their word on a $50,000 payment to help with operations of the Dolby landfill in East Millinocket.

But confusion marked several issues. Councilors wondered whether the $720,000 payment would recur in the 2012-13 fiscal year, which begins July 1, and whether the school board would agree with dropping the proposed lawsuit. They didn’t know if town government would have to pay the schools the missing $216,000.

Council Chairman John Davis said he wants to meet with the school board and the town’s attorney, Dean Beaupain, to settle those questions before deciding whether to sue the state.

“The school board has to agree with it, because we’re fighting over school money,” Davis said after the meeting, calling a lawsuit “contingent upon a few stipulations.”

Councilor Jimmy Busque would rather see the matter dropped.

“We have beat this enough. I want to move forward,” said Busque, who with Councilor Gilda Stratton voted to accept settling for $504,000. “We don’t know how much more this will drag on, how much this will cost us.”

“I want to put this to rest,” Stratton said. “The governor didn’t do the right thing by us. I understand that, but I don’t want to spend all this on lawyer’s fees and have to come up with the money” that the schools weren’t appropriated.

Councilors Richard Angotti Jr., Michael Madore and John Raymond voted against settling for the $504,000. Davis and Councilor Bryant Davis, who are distant relatives, abstained because key issues remain unclear to them, they said.

Madore and Town Manager Eugene Conlogue said LePage violated the law in a totally unprecedented move. The governor ignored state guidelines for the distribution of the funds on the mistaken belief that town officials had overvalued the Katahdin Avenue paper mill for years before its revaluation last year created the need for Sudden and Severe Impact funds, they said.

LePage also wrongly supposed that Millinocket officials had agreed to fund landfill operations at $50,000 annually, they said. Conlogue has produced a string of correspondence with state officials that showed, he and councilors believe, that Millinocket only had agreed to a one-time payment. East Millinocket officials also said theirs is a one-time arrangement.

LePage “has traded education for a dump. Nobody is disputing the legality of that. They are disputing why nobody has called him on this,” Madore said. “If it [the $216,000] is something that belongs to the community, why don’t we pursue it?

“If we accept the $504,000 then basically we are expunging the misappropriation. I think $216,000 owed to the town is something worth fighting over,” Madore added.

Councilors also voted 7-0 Thursday to rescind the offer to the state of $50,000 for a one-time payment toward operation of the landfill, the state’s assuming ownership of which last year was a crucial element to Cate Street Capital of New Hampshire’s purchase of the two Katahdin region mills last September. Investors shied from the mills because of fears that the landfill, used for decades by the mills, was an enormous potential liability.

The mills’ purchase allowed the East Millinocket mill’s restart in October, employing about 225 workers, and Cate Street’s plans to place a torrefied wood factory at the Millinocket mill, which Cate Street representatives discussed at Thursday’s meeting.

Rep. Herb Clark, D-Millinocket, cautioned councilors against believing that paperwork state officials provided showing $720,000 in Sudden and Severe Impact funds allocated to the town next year proved the money would arrive.

“If you think that something is going to stay there from year from year, you got another thing coming,” Clark said.

Councilors need a special meeting with the school board for clarity and to ensure that the town speaks with one voice, Clark said.

“If the seven of you people don’t know what going on, then nobody knows what is going on,” Clark said.

CORRECTION:

A previous version of this story said he governor ignored state guidelines for the distribution of the funds on the mistaken belief that town officials had undervalued the Katahdin Avenue paper mill for years. The story should have said town officials had overvalued the mill.

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