Millinocket town, school leaders pledge to work together to fill budget holes

Millinocket Town Council Chairman Richard Angotti Jr. listens to residents during a council meeting on Feb. 27, 2014.
Millinocket Town Council Chairman Richard Angotti Jr. listens to residents during a council meeting on Feb. 27, 2014. Buy Photo
Posted March 18, 2014, at 9:20 p.m.

MILLINOCKET, Maine — Town and school board leaders promised Tuesday to improve communication and cohesiveness as they prepare to shape “a different community” created by a shrinking town population and tax base.

Meeting in a special one-hour session, the Town Council and Millinocket School Committee reviewed Town Manager Peggy Daigle’s analysis of an expected $312,000 school budget shortfall. They pledged to take steps to keep town and school spending in line with revenues.

Council Chairman Richard Angotti Jr. and School Committee Chairman Michael Jewers expressed satisfaction with Daigle’s presentation. Daigle reviewed several school budget revenue and expenditure lines that caused her to declare a $187,000 deficit on Feb. 27 and a trend toward the $312,000 loss by the end of the school year. Her revelation sparked council calls for tighter school bookkeeping and a strong denial from Superintendent Kenneth Smith, who called Daigle’s analysis “superficial bookkeeping.”

“They see what our financial officer [Daigle] works from and what it takes to proceed. Everybody’s on the same page,” Angotti said after the meeting. “This is the first time we’ve ever done this and nobody disagreed with what she said. They didn’t say anything.”

“It wasn’t superficial bookkeeping,” Jewers said after the meeting.

Jewers explained that Daigle was using a state funding formula the State Legislature set for the 2013-14 fiscal year weeks after the School Committee set its $6.1 million budget for that year using a different formula. The differing formulas and the committee’s being forced to set its budget prior to the Legislature’s issuance of funding caused much of the problem, he said.

Smith and Daigle had different estimates Tuesday of the present shortfall. Smith said school officials were reducing spending by $142,000 to counter expected revenue shortfalls. Daigle placed her deficit estimate at about $109,000 but said she didn’t have all the figures Smith had.

The desire to reconcile and tackle together the town’s difficult finances threaded the two boards’ conversations. Although in the Millinocket town charter the school board is subordinate to the council in financial matters, the boards’ differing agendas and increasing financial stresses had driven them apart. They agreed that town and school finances had fallen so low that residents might have to start going without services rather than pay for them because the town’s mill rate is unacceptably high at $29.50 per $1,000 of valuation.

The boards promised to communicate often, to review the same sets of financial figures monthly and to begin talks on a strategic plan to shape the community in response to a vast drop in the town’s population over the last two decades.

In the last 40 years, Millinocket’s population plunged from 7,742 to 4,466 residents and the town has sold 54 tax-foreclosed properties since October to help bolster the town’s reserve account from an anemic $800,000 to about $2.1 million. Town officials plan to sell 25 more. Foreclosure notices went out on 62 properties that owe taxes for the 2011-12 fiscal year.

Both boards agreed that they might need to set a “disaster budget” in case Cate Street Capital, the town’s top taxpayer, continued to lag on its $2.3 million property tax payment to the town. The town nets about $1.1 million of that total annually after Cate Street gets its various tax breaks from the state, officials said.

“The first thing is, we have to stay on top of it [town and school finances] all the time. We can do our best effort to come out with a perfect budget, but the laws of nature are against it. We need to keep on top of everything spent all the time. That is our charge as school board members and councilors,” Angotti said.

Jewers said that the state government’s continual cutting of revenue-sharing with municipalities “is a huge impact on us. Midway through the year we may pick up some special-needs kids and you can’t plan for these things. And they just cause havoc with our budget,” he said.

“We all understand that, this community does, but this community is taxed to the limit. We have to back that down,” Angotti replied.

Jewers said that school officials had been prudently cutting their budget from $8 million to $6.3 million and $6.1 million over the last three years. He hinted that local schools might have to sue state government for the funding laws require, saying that municipalities in Kentucky had sued their state government under similar circumstances.

School officials have been discussing how to reshape the school system to meet Millinocket’s financial problems, Jewers said. That effort includes talks with Lee Academy about having that private institution run town schools with vast injections of international-student tuition money.

“We are considering some big changes,” Jewers said. “We know what is in front of us. It will be a different community.”

 

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