Work continues on 2015-16 finances

Selectmen to meet tonight at 6 p.m.

By Stuart Hedstrom 
Staff Writer

    MILO — A possible vote by the selectmen on the 2015-16 budget was scheduled for a Jan, 20 meeting, two weeks before the Feb. 3 deadline to send the spending plan to the March 9 town meeting, but no action was taken due to a lack of a formal vote on a recommendation by the budget committee and with several other questions still looming. Instead both the committee and selectmen are scheduled to meet on Wednesday, Jan. 28 — at 5 and 6 p.m. respectively — to examine the budget and possibly take votes to move the spending plan forward.

    Town Manager David Maynard presented those in attendance on Jan. 20 with a copy of the 2016 fiscal year budget, which included a 4.5-page budget message. Reading the message aloud, Maynard said, “There are a number of notable facts that must be taken into account if we are to look fairly at the needs of the residents, voters and taxpayers of our community.” He said the budgeting must be looked at fairly but also realistically in recognizing both revenues and expenditures, with some costs beyond the town’s control.
    Maynard said municipal revenue sharing, which began nearly 40 decades ago with many of the local revenues collected by municipalities being paid to the state before being redistributed in what Maynard called a “deal with the devil” and “by ‘deal with the devil’ I am not saying that lightly,’” has never been funded at the intended 70 percent level. “Now the proposal is to phase it out entirely,” Maynard said. “If the municipal revenue sharing programs are phased out, many of our smaller municipalities (including the town of Milo) will no longer be able to make ends meet.”
    He later said, “I refuse to be held hostage every year to what the governor proposes to do to cut municipal revenue sharing. I am recognizing the municipal revenue sharing as it currently stands, and looking forward to a refusal to quietly knuckle under to the new demands to reduce and eliminate it all together.” Maynard said about $24,000 in revenue may be at risk.
    The budget message also said how school funding is beyond local control, removed with the school consolidations of the second half of the 20th century. “Please do not misunderstand or misquote me, the school district needs to be fairly and properly funded,” Maynard said. “However, the town service functions do as well. To shift from one to the other, and then remove one of the principal sources of local revenues, is a travesty and an injustice to all. It is one that can only be fairly addressed by reasonable restraint by both parties.”
    “The town of Milo has taken numerous steps over the years to try to keep its tax rate as close to level as possible,” Maynard said. “There are times when it is possible and reasonable. There are other times when it is barely possible, and not likely reasonable. 2015 may well be one of those years.” He said the goal is to keep the tax rate level, but a near $1.0 mil rate increase was likely with the town’s assessed value of nearly $107 million in 2014.
    Maynard said last year the town crossed the line on its assessed value to fair market value ratio, used by the state to determine when “our assessed values are too far out of line with reality.” He said when the rate is at 115 percent, the state requires an adjustment or revaluation of all properties in town. “We are at 120 percent in 2014, and we are anticipating that we will be very close to 125 percent in 2015.”
    Later in the evening the selectmen approved an across the board factoring, by Hamlin Associates of Parkman, to address the situation. “This means that everybody’s property tax bill will remain essentially the same as 2014, modified by whatever change is approved in the budget, even though the property tax mil rate will increase significantly,” Maynard said. “This does not mean the town of Milo has devalued your property, it does mean that state statute the town of Milo has to recognize for assessment purposes that your property has lost value.”
    Saying he could not reasonably deliver a 2015-16 budget without a request for the close to $1 mil increase, Maynard said last year the selectmen recommended voters approve taking $50,000 from surplus to reduce the tax rate — by about half — and the same will need to be considered at this year’s town meeting. “However the proposed budget has had nearly every penny of cushion removed from each of the major functions of the town,” Maynard said. “The only exceptions are for paving and equipment purchases, and putting in place the ordinances needed to try to stop the further spiral of property decay.”
    Several reasons for a budget increase were explained, including technology and energy costs for the town hall and the replacement of equipment. “In public works, we are struggling with the question of whether a bonding issue will give us the means to legitimately clear the backlog of paving projects that have failed to be completed, year after year in recent years,” Maynard said.
    He said the current proposed budget includes $100,000 for paving and funds for short-term borrowing for the replacement of the trash truck and trackless sidewalk machine. Maynard said a 1-ton plow truck and another larger plow truck both need to be replaced. “These cost figures I don’t have available to put into this year’s budget, at this time, and will need to be added before the select board finalizes the budget in preparation for voters at town meeting,” Maynard said, adding the fire department will be looking to replace its aging main pumper truck and the ladder truck.
    “The end result is a proposed budget of $3,168,251 with offsetting revenues of $3,107,207, for a total budget increase of $94,044 or a $0.88 mil tax increase,” Maynard said, as this figure can still be subject to change prior as it is readied for town meeting. “Should the select board choose to recommend taking a similar $50,000 from surplus to reduce the tax rate again this year, the final property tax increase would be $44,044 or $0.41 mil.”
    A bond is being considered for the public works equipment (four total items), two fire department trucks, road projects, another project in conjunction with the Milo Water District, a number of building improvements and one new building. Maynard said a bond proposal is being prepared for the Feb. 3 meeting.
    “I am already aware of the extent of the limitations on the fiscal viability of such a bond proposal,” he said. “If it is humanly possible to come up with a viable way to do it, I will find it. However, at this time, you should be aware that it is a very difficult, even daunting, task indeed. If it is viable, it would take at least $125,000 out of the 2015 budget, reducing the budget below a net increase for 2015. However, in future years it would add back a significant amount to the budget, likely to exceed the amount saved in the short term. Any significant cost savings would not be realized until after the bond is paid off at the end of the 10-year life of the bond.”
    The budget message said $750,000 would be needed solely to catch up on paving due for 2015. The rest of Milo’s roads would cost at least $1.8 million over the next 15 years. “In simple English, even at the level of $100,000 per year, we are falling farther behind every year,” Maynard said. “$75,000, $50,000 or nothing at all for a year or two, only guarantees that sooner of later we will be faced with costs so far out of control that we cannot avoid a bond issue.”
    The equipment replacement costs are an estimated additional $1 million, which Maynard said could not be covered by what the town has been putting away. “To keep ahead of these costs requires approximately $300,000 per year, about what we have lost in state revenue sharing when it is all over with,” he said. He said at the moment town officials are considering doing a bond at 2 percent at the present time or risking a future bond with higher interest rates that may be beyond the town’s reach.
    After the presentation, Select Chair Lee McMannus thanked Maynard and said about the Jan. 28 session discussion, “I think the board needs the information from that meeting and then to sit down and make a decision.”
    When asked about their lack of a formal vote, Budget Committee Chair Izzy Warren said the group was looking for more cuts to the spending plan and sent the budget back to Maynard to make these possible adjustments. The budget committee makes its recommendations on the various articles for the town meeting, either yes or no, as do the selectmen so citizens can consider this when making their decisions.