BELFAST, Maine — City officials are scrambling to figure out the next steps for the long-planned-for $1.5 million Belfast Harbor Walk project after learning late last week that Gov. Paul LePage has frozen their part of a $25 million bond that was approved in 2010 by Maine voters.
“My hope is that the governor’s office is rethinking this,” City Manager Joe Slocum said Friday. “What’s unfortunate is that Belfast and other communities went ahead and planned like they had the money, because they were told that they did.”
Belfast officials had applied for and received a $400,000 Communities for Maine’s Future matching grant last year, the maximum amount available, and officials incorporated that sum as they budgeted for the waterfront walkway, which will go out to bid in August.
But as of now, the funds have been stalled for two years, which means that 11 communities around the state need to figure out how to approach their projects.
Last month, LePage wrote a letter to affected state agencies that explained why they shouldn’t budget for bond revenue without clear approval from him.
“It is our duty as public servants to ensure each taxpayer dollar is spent appropriately to earn the highest return at the lowest cost,” the letter reads. “That is especially true when we are spending borrowed money — money that has to be paid back by future taxpayers, with interest.”
The decision by the LePage administration affects a total of $40 million in bonds that voters have approved in recent years but that the state treasurer’s office has not yet sold at market, including $25 million for the 2010 bond initiative that includes the Communities for Maine’s Future grants.
The competitive grants were given to projects that would help revitalize downtowns. Altogether, the affected funds add up to $3.05 million, according to George Gervais, the commissioner of the Maine Department of Economic and Community Development.
The municipalities that applied for and received the grants are Belfast, Skowhegan, Bath, Dover-Foxcroft, Eastport, Monmouth, Rockland, Unity, Winthrop, Norway and Livermore Falls.
“I think the governor’s message was clear,” the commissioner said Friday. “He really didn’t feel it was fiscally responsible for the state to take on more debt now. The soonest that will be is 2014. He has the best interest of the taxpayers in mind.”
Gervais said state officials have been working to find other solutions to the cash-flow conundrum.
“I lean on the side of optimism,” he said. “We’re exploring our options. Maybe by this time next week, we’ll be delivering some good news.”
That would be a happy solution for communities such as Skowhegan, where Town Manager John Doucette said Friday afternoon that his town’s $400,000 grant is to be used to renovate a downtown parking lot that is a key component of the town’s economic development plan. Skowhegan planners want to bring in more buses and create white-water rafting opportunities on the Kennebec River and the Commercial Street parking lot is crucial to those ideas.
“We understand where the governor is coming from,” he said. “But in 2014, the cost of this project is going to be a lot higher.”
Andrew Deci, Bath director of planning and development, said his city’s grant for $70,718 would be used for a window restoration project at the Customs House Building, which he described as an “exceptionally important building to the community.”
He said he did not know if the city now intends to delay the project.
Gervais said all of the projects are different and at different stages of development. Some towns, such as Belfast, don’t want to wait to complete their projects. Other towns say they will.
“What it boils down to is timing,” he said. “The question remains if they have to fill in a gap in time.”
According to Slocum, Belfast likely will make up for the $400,000 shortfall with a municipal bond.
“I’m not really sure how that makes it better for anybody,” he said. “It really becomes a shift in interest from the state taxpayer to the Belfast property taxpayer.”
Belfast City Planner Wayne Marshall said the Harbor Walk is the community’s No. 1 capital project priority for the year. So far, Belfast has spent about $220,000 on engineering and design for the Harbor Walk and officials still intend to go to bid for the construction phase on Aug. 3.
“We’ve committed a lot of energy, a lot of thought and a lot of taxpayer funds,” he said. “We’re anxious to have this project be able to go forward.”
Learning about the frozen funding was troubling, according to Marshall and Doucette.
“We’re concerned,” Marshall said. “This is the exact type of project that we hope would be supported because of the types of benefit it provides to the local, regional and state economies.”
Doucette said the news came as a big, unwelcome surprise to Skowhegan.
“We knew [the governor] was freezing bonds, but there was nothing saying he was going to freeze ones that had been approved a year ago,” he said. “I don’t think I’m against what he’s doing — but this has been approved. The money’s there. Let us do our projects.”