‘The town needs a new heart’: Millinocket starts facing loss of paper machine revenues

Millinocket Town Manager Peggy Daigle discussed the town's financial woes at a special town meeting at Stearns High School Tuesday.
Nick Sambides Jr. | BDN
Millinocket Town Manager Peggy Daigle discussed the town's financial woes at a special town meeting at Stearns High School Tuesday. Buy Photo
Posted May 27, 2014, at 8:49 p.m.
Last modified May 28, 2014, at 8:36 a.m.

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Millinocket Town Manager Peggy Daigle discussed the town's financial woes at a special town meeting at Stearns High School Tuesday.
Nick Sambides Jr. | BDN
Millinocket Town Manager Peggy Daigle discussed the town's financial woes at a special town meeting at Stearns High School Tuesday. Buy Photo

MILLINOCKET, Maine — The belt-tightening forced by the loss of the town’s biggest taxpayer – and its $2.3 million in annual tax payments — will squeeze Millinocket like never before, town leaders said during a special meeting Tuesday.

The town council and school committee called the meeting after they learned last week Great Northern Paper Co. LLC will put its No. 11 paper machine and other papermaking equipment up for auction next month. That loss would impact the 2015-16 fiscal year. Town officials proposed to cut $3 million from town and school budgets over the next two years to compensate.

The tone of the two-hour meeting at the Stearns High School auditorium was mostly amicable. About 250 people attended. Several said they realized Millinocket, which was one of Maine’s most prosperous towns for several decades, needs to change dramatically to remain liveable.

“We don’t want to see the library go away. We don’t want to see the police and fire departments be cut. We don’t want to see the schools be degraded. But we have a seriously abnormal situation going on here,” resident Woody McCafferty said.

“We are not going to be able to have what we want,” he added. “We are going to have what we can afford.”

“The mill is dead,” one resident said, comparing Millinocket to an elderly patient in need of a heart transplant. “The town needs a new heart.”

The $3 million will be cut from about $6.5 million in local tax revenues by the 2015-16 fiscal year to offset the loss. Millinocket’s total school budget for the 2013-14 fiscal year, which ends June 30, is $6.5 million. The municipal budget town leaders approved for that year is $6.2 million.

Town Manager Peggy Daigle proposed the school board and council each cut $300,000 from their proposed 2014-15 budgets to help cushion the shock of the revenue loss. Daigle called her recommendations a first step. Her proposal eliminates town crossing guards, retiree health insurance and Drug Abuse Resistance Education supplies. The cuts would include a third of the town library’s $155,000 budget and $80,000 from the town’s $130,000 capital projects budget.

The $300,000 cut might not be enough for next year. Millinocket filed a lien last week seeking about $2.24 million in delinquent taxes from GNP, Daigle said before the meeting. Another lien seeking the remainder of the approximately $2.3 million will be filed in about 30 days, she said.

GNP and Cate Street Capital, the New Hampshire investor that created GNP when it bought the East Millinocket and Millinocket paper mills in 2011, have given no indication when they will pay the overdue taxes.

Nearly 450 delinquent tax notices were mailed last week to residents for portions of the 2012-13 fiscal year. As of last month, town officials had generated more than $120,449 in sales of 54 properties as part of efforts to recoup $262,798 in defaulted property taxes, sewer fees and legal expenses since last fall. The town is pursuing foreclosures on 62 more properties for the 2011-12 fiscal year.

Speakers dealt wryly with the town’s financial woes. Before speaking, several identified themselves and their addresses and noted they didn’t owe the town money. But the foreclosures underlined a grim reality about the town’s 28.95 mill rate, councilor Michael Madore said.

“It is a matter of people not being able to meet the number [to pay property taxes] now,” Madore said. “I think the answer is pretty plain that they can’t. We have to look at what is best for the entire community, what this community can sustain.”

School board members will meet at Stearns High School at 4 p.m. Wednesday to begin plotting their next moves to address the crisis.

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