Town committee continues 2013 budget review process

By Joseph Cyr
Staff Writer
    HOULTON — If the current municipal budget is approved as presented, a tax hike is imminent, according to Houlton Town Manager Eugene Conlogue. But the exact extent of that increase remains a mystery at this point.
    The town’s Board of Budget Review is expected to sign off on the $9.47 million spending plan during its final session, Wednesday (today) at 6:30 p.m. From there, the document goes to the town council for their input. That review is slated to take place Monday, Dec. 17 at 6:30 p.m.
    During last week’s budget committee meeting, Conlogue presented a scenario that might help lessen the tax blow.
    “We had a good discussion about our fund balance and how it is a good idea to build that up, because it is too low,” Conlogue said. “If we can project a surplus for the end of the year, what would happen if we recommended using a percentage of the surplus, if there is any, from this year?”
    Typically, any unspent funds go into the town’s undesignated fund balance. Houlton currently has $473,780 in that fund, but is trying to grow that account so it can be used in the event of an emergency. In its last audit, however, the auditor suggested the town should have more than $1 million in its undesignated fund balance.
    “Maybe we commit a third of any surplus to lower taxes, or maybe it is some other figure,” Conlogue said. “You would still be moving money into the fund balance, but you would also have some money offsetting this potential tax increase.”
    Budget committee members were receptive to Conlogue’s suggestion and asked him to come back with more concrete numbers at the group’s final meeting.
    Committee chairman Walter Goodrich reminded the group that if a tax increase were to happen, it was likely due to the projected increase in the SAD 29 budget.
    “A big part of the possible tax increase is the school,” he said. “That is where it is all coming from. There is negligible amount of money we can take out of here (municipal budget) without hurting services or laying off people. People need to decide if they want to vote for the school budget or vote it down to make them go back and reassess.”
    Board member Dale Flewelling agreed.
    “The school can make some difficult adjustments too,” he said. “The voters have to voice their opinions and the school needs to show some due diligence. I am not saying they are or they aren’t. We need the support of our school district to help us through this tough time.”
    Because the town and school operate on different fiscal cycles, the town must estimate how much money will be required for SAD 29. That figure is currently estimated at $2,215,030, which is an increase of $164,191 (8.3 percent). SAD 29 does not compile its budget until early spring for the fiscal year that runs July 1, 2012 to June 30, 2013.
    At the Dec. 5 session, which was attended by 12 members of the public and four town councilors, the committee reviewed the departments of tax assessor, tax abatements, community development, code enforcement, police and public works.
    In the review of the assessors’ department, Laureen Bither, town assessor, informed the group that the town of Houlton is currently assessing property at about 92 percent of its market value.
    “Between real estate and personal property, we have about 4,500 accounts in Houlton,” Bither said. “We have to do a sales ratio study in my office every year that determines what our assessed values are compared to market value.”
    State law requires a minimum of 70 percent assessed values, but the goal is to be as close to 100 percent as possible, Bither said. The ratio comes into play when determining how much of a discount residents get for their Homestead Exemptions and the Veterans Exemptions.
    “If I keep our assessed values over 90 percent of market value, we can declare to the state we are at 100 percent,” Bither said. “That allows us to give 100 percent of both the Homestead and Veterans exemptions.”
    The issue of the 2 percent raises for employees and department heads was also revisited at the request of committee.
    “In southern Maine, they are talking about a 3-5 percent increase, while Madawaska is battling the school district because they can’t pay the school teachers,” Flewelling said. “We are somewhere in the middle of all that. Aren’t our contracts really good faith agreements?”
    According to Conlogue, the union contracts were more than just “good faith agreements,” and that the town was bound by law to uphold them. The only way the raise for employees could be revisited was if the negotiating union agreed to return to the bargaining table to discuss a reduction.”
    Committee member Phil Bernaiche said he did not think the town’s department heads should be given the same 2 percent raise as the union employees.
    “We are having a difficult time to run the town, and here we are thinking about dishing out raises,” Bernaiche said. “I don’t think we should be giving any Christmas presents until the town is in better (financial) shape.”