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Fort Fairfield Faces a $2 Million Shortfall With 22/23 Proposed Budget
By: David Deschesne
Fort Fairfield Journal, May 4, 2022
The Fort Fairfield town council held their first hearing on the proposed 2022/23 municipal budget on April 28. The budget features a $2 million deficit, twice as much as the previous year’s budget.
The total expenses projected for the town’s upcoming fiscal year are $8,345,134 with total income only projected to be $6,325,908 which means the town has to figure out how to either cut expenses, or raise its income revenue by a little more than $2 million in order to balance their budget.
“The proposed budget presented tonight provides for a deficit of $2 million,” Gary Sirois said during the public comment period. “That calculates out to a tax rate of 31 mils. From 19.5 to 31 mils, if you adopt this budget. I don't know who wants to pay that kind of money, but I sure don't. Total expenditures on this proposed budget is $1 million more than last year. That's a lot of money. I'm not going to go into different departments because some departments are fairly close, some departments are way off. And, of course, the revenue is down the other million dollars. We're talking $2 million [shortfall] here for a small community. Personally, I don't think we can afford that
Town manager, Andrea Powers then tried to bring some context and clarity to the $2 million budget deficit. “It gets very confusing if you do not understand municipal budgets, and you do not understand where these numbers come from or what they're for. But if you read on the left hand side of the back page of consolidated expenses, you will see the County tax and the school administrative district is also in there. And you have to subtract those from the actual final budget for what the municipality is actual responsible for.”
Ms. Powers was referring to the tax that has to be paid to Aroostook County ($277,000) and the estimated amount that will need to be paid to the school ($2.41 million), both of which are out of the town council's control.
The grand total that you see of $8,345,134, that includes the school and county tax. So, if you remove those two from there to get that number [the budget just for the town departments alone].
Councilman Mitch Butler then sought greater clarity from the town manager by asking; “So if you remove the $277,000 and $2.41 million then that would be off the $8 million, right?
“Yes,” Ms. Powers responded.
“So it's not that we're $2 million in the hole on this budget,” said Butler.
“Well, the municipality is because we have to pay for whatever they give us for a bill,” said Ms. Powers. “If we were just doing the municipality and didn't have the school, or county tax, you would have $5,925,540 that I was talking about earlier when we first started, and that is what we are asking for as a municipality in order to provide the services that we provide for our citizens and if you take our income which is the $6,325,908 and you subtract what we are asking for - $5,925,540 you actually have an overlay of $400,316.”
Gary Sirois then spoke up to help clear the developing smokescreen; “But you still have to pay the school and the county tax. I don't care how you slice it, you got to pay for it. So, take it out all you want to, but it's there. It's a bill, you got to pay it.”
David Dorsey then rose to speak about the current trend of the town spending more money than it receives. “You've got to remember, three of you [councilors] the last two years, when you're talking about budgets to actual you overspent your budget $1.3 million. It's right in your annual report. Last year, you spent over a million dollars, so you've lost $2.2 million out of our capital - the value - and it's in your report,” said Dorsey. “I've been getting sticky about your budgets and stuff because when I got this budget today, and the increase, I didn't know if someone was either smoking something wrong or drinking water. But, I'm a banker, 40 years on budgets. Nobody's going to put that [past me].
Sirois then reminded the council, “ You five, as councilors have a responsibility to the rest of us citizens to hold that so our taxes don't go up dramatically, and I hope you can do that. I have suggested to some of you that you charge the town manager with the responsibility of bringing this budget in line with a percentage increase of whatever you think is reasonable. Only she can do that, she has charge of all the department heads. When I look at the different department heads, I see substantial increases in this budget. I'm not smart enough to know which is right and which is wrong, all I know is the total expenditures exceed expenses and income by two million dollars. This is a small town, 2 million is a lot of money and I implore you, as councilors, to charge your manager with the responsibility to bring that budget back in line.”
Dorsey also made not of a large outstanding tax bill for ReEnergy amounting to nearly half a million dollars. A couple years ago, ReEnergy closed its power plant on Cheney Grove and raized the entire infrastructure to ground level, returning the area to the grassy field it once was. Since the town now owns that land and there are no structures to place liens against, the town is placed in an impossible position of trying to collect a vast sum of money against a company that is no longer in town, has no property to lien and thus no leverage to force them to pay. “Our largest taxpayer, ReEnergy, hasn't paid its tax bill for three or four years,” Dorsey noted. “It amounts to about $462,000 and I suppose if we add the fines it would be probably $25,000 or $30,000 a year, anyway. I talked to Ella about it and they don't seem to be too interested in accepting some kind of compromise payment with them. [ReEnergy] merged with another company last April, they kind of changed their program around a little bit, so my question is what do we do? We're carrying $462,000 on accounts receivable - current accounts receivable. Accounts receivable on current are cash, like deposits and so forth. When you get into a credit problem, it's no longer a quick assett. It's got to be out of there. Now, I don't know if they're going to make arrangements for this year and I don't know what effect it will have on your budgets. But it represents a hell of a chunk of money.”
Ms. Powers then noted that ReEnergy isn't the only large outstanding tax bill the town is trying to collect. “This council - not this particular council - but the Fort Fairfield town council has carried an over $100,000 debt on FARM Park for a very long time. I've asked to have it resolved.”
Dorsey retorted, “When we start looking at bottom lines on what you need to run this place, we better start looking at a lot of other IOUs. Look at the people in this town, we're not a commercial town. We don't have manufacturing. It's a retirement bedroom community. A lot of people on fixed incomes and now they're [getting hit] with all kinds of expenses. Maybe I'm getting a little testy when I see somebody up here with a big increase in a department head and I'm saying, maybe they ought to be able to get along without it.”
The MSAD #20 school board has yet to adopt their budget but it is estimated to remain around the $2.1 million mark - which is the amount of money the town of Fort Fairfield does not have in tax income after the operating expenses for the town and County tax are paid. The MSAD #20 school board does hold a public vote on its budget in June of every year, but the only people who typically show up to vote are the teachers, staff and administrators who draw their salaries from the school system. Historically, very few townspeople outside of an affiliation with the school system bother to show up to vote on the budget, which makes the whole voting process academic since there are never a significant enough number of voters on hand to put up any meaningful resistance to the school's budget vote which the town (and by extension the local taxpayers) are forced by law to pay.
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