LINCOLN, Maine – A premature release of information about the town’s recent budgeting errors led to a $575,000 overstatement of the errors’ impact, interim Town Manager Bill Lawrence says.
In a weekly memo to residents called the Town of Lincoln Weekly News, Lawrence implicitly criticized former probationary Town Manager Bill Reed for releasing to the media information about the errors prior to the completion of an independent audit of town books by Mindy Cyr of Maine Municipal Audit Services. He also disclosed for the first time that problems with a mathematical formula used in town financial spreadsheets caused errors in the original 2012-13 budget.
In Friday’s edition, Lawrence restated two of the three errors Reed said had been discovered: a $200,000 overbudgeting of revenue due to the double-booking of Homestead Tax Exemption funds and what Reed described as an $809,000 underestimation of projected expenses in the town’s Tax Increment Financing accounts. Both errors occurred in the 2011-12 budget. That fiscal year ended June 30.
“We can only make decisions and take action after all the facts and evidence are gathered,” Lawrence wrote in Friday’s Weekly News. “We cannot work on rumors and newspaper reporting. Our decisions may not be popular, but they will be made.”
“Our budget issues were reported to the media before the auditor’s report was released, and thus incorrect information was reported because of the premature release,” Lawrence added.
During an informal newsconference also attended by Treasurer Gilberte Mayo and Assessor Ruth Birtz, Reed — whose name was not mentioned in Lawrence’s report — announced on Oct. 2 the two errors, which he said were found in the 2011-12 budget.
He, Birtz and Mayo also discussed a third — a $575,000 overestimation of projected revenues in the town’s four Tax Increment Financing accounts listed in the budget for the 2012-13 fiscal year, which will end June 30, 2013.
Cyr’s audit report was dated Oct. 9 and only addressed the 2011-12 fiscal year.
The Town Council voted 6-0 on Oct. 18 to fire Reed about 1½ before the end of his probationary period. He has since not responded to requests for comment.
Town officials, Lawrence said, also did not transfer about $1 million from the town’s undesignated fund balance to cover the errors, as Reed said on Oct. 2.
In his report, Lawrence disclosed the discovery of a new issue — a problem with the mathematical formula within the Excel Spreadsheet program “where the budget preparation was done.”
“This has resulted in errors that needed to be corrected to keep the mill rate the same as what was voted on by the [Town] Council in June 2012” as part of the passage of the budget for the 2012-13 budget year, which began July 1.
Lawrence’s report does not discuss the errors. The town’s new budget will not increase the town’s 19.86 mill rate, officials have said.