Attorney general asked to rule whether LePage can withhold money from Millinocket

MILLINOCKET, Maine — Maine Attorney General William Schneider has been asked to determine whether Gov. Paul LePage can legally withhold $216,000 in Sudden and Severe Impact funds from Millinocket.

Rep. Herbert Clark, D-Millinocket, said he is challenging LePage’s actions on behalf of the School Department and Town Council.

“I am requesting an official legal opinion from your office as to whether the governor has the legal authority to intervene in the distribution of SIS funds if all of the other conditions specified in 36 MRSA 208-A are met,” Clark wrote in a letter to Schneider dated Thursday. “Additionally, why isn’t the governor required to follow the law and what legal recourse does the town of Millinocket have in order to get the remaining SIS funds released?”

Brenda Kielty, spokeswoman for the Maine Attorney General’s office, said the letter is being reviewed. She declined to comment further.

In a move she acknowledged as “hardball,” LePage spokeswoman Adrienne Bennett said Wednesday that LePage was allocating to East Millinocket and Millinocket $504,000 each in Sudden and Severe Impact funds, not the $720,000 Millinocket is entitled to, because Millinocket leaders broke an agreement to contribute $50,000 annually to the maintenance of the Dolby Landfill in East Millinocket.

A state check for $504,000 arrived in Millinocket by certified mail the next day.

Under state law, the state government is required to provide Sudden and Severe Impact funds to towns that suffer drastic losses to their tax base. Millinocket and East Millinocket are eligible for such funds because of the significant loss of taxable value the towns suffered with the sale of the two Katahdin region paper mills to the new Great Northern Paper Co. last year.

Millinocket councilors said Thursday they agreed only to a one-year $50,000 payment and that LePage lied in claiming otherwise as part of an attempt to bully them out of funds the town deserves.

They had the $504,000 check stored in the town vault and said they have asked Clark to submit a bill seeking the Legislature’s permission to sue the LePage administration. Under Maine law, the Legislature must agree that a municipality has grounds to sue the state.

During Thursday’s council meeting, Town Manager Eugene Conlogue released more than 20 pages of correspondence between state and town officials that he said proved Millinocket agreed only to a one-time $50,000 payment toward the landfill. In none of the documents do town officials speak of a partnership requiring annual payments.

On Friday, Bennett said state officials are assembling a timeline of documents to illustrate their side of the town-state Dolby negotiations. Bennett said she regretted that Millinocket’s leaders had called LePage a bully and said that he had lied.

“It was unfortunate that Mr. Conlogue and council members had to resort to name-calling when it has been clear that this governor has fought for the Katahdin region for more than a year now,” Bennett said.

Bennett declined to comment on whether the governor has the legal authority to change Millinocket’s Sudden and Severe Impact payout.

LePage, Bennett said, believes the $504,000 allocation to Millinocket is fair because town officials had given that town’s paper mill an unrealistically high assessment. They said the mill was worth $184 million in the years since its August 2009 closure and did not account for depreciation, according to Bennett.

“The governor believes that this is the crux of the issue,” Bennett said Friday. “That is where we are playing hardball.”

The state’s agreement to assume ownership of the landfill last spring was a key element in the sale of the two Katahdin region paper mills and the restart of the East Millinocket mill in October. Engineered partly by LePage administration officials, the restart returned 216 jobs to the region.

But the Legislature’s agreement to assume ownership of the landfill provided no money or management for continuing landfill operations.

Since then, LePage administration officials and leaders of East Millinocket and Millinocket have wrestled over who would manage the landfill. All sides essentially have claimed that they couldn’t spare the money, about $250,000 annually, to operate the landfill, which takes refuse from the East Millinocket mill.

Clint Linscott, chairman of East Millinocket’s Board of Selectmen, declined to comment Thursday on whether his town’s leaders believed they were making a multiyear agreement to manage Dolby. Unlike Millinocket’s leaders, East Millinocket officials never have disclosed their terms for helping the state manage the landfill.

Bennett said Wednesday that the state would contribute $150,000 per year. Millinocket would pay $50,000 a year and East Millinocket would contribute $50,000 worth of funding and in-kind maintenance services annually, Bennett said.

According to Bennett and Conlogue, there is no written contract or summary of terms regarding landfill funding or operations. Instead, essential points were discussed in meetings and letters. By Conlogue’s count, Millinocket and state officials met four times.

Conlogue conceded that the lack of a contract might appear strange, but he said creating one was the state’s responsibility, not the towns’.

“It is such a unique situation, I don’t have anything to compare it to,” Conlogue said Friday. “Typically you would have some kind of written agreement of the terms or conditions of what you would need to do, and we have never even discussed such a thing, never mind actually seen such a document.”

If the controversy is a miscommunication and not negotiating tactics between Millinocket leaders and LePage, the misunderstanding apparently occurred during what Bennett called two hectic time periods.

The first was May 2011, a month after LePage persuaded former mill owner Brookfield Asset Management to extend the decommissioning date of the two mills by 90 days. The second was September 2011, when town and state officials were scrambling to close a sale deal with the mills’ new owners.

Bennett said that May was when state and town officials met and formed what state officials thought was a partnership over the Dolby landfill. The first meeting occurred on May 3. Others followed. She announced the first meeting in a press release several days before, she said.

“These were closed-door meetings where dealings or dialogue about Dolby occurred. It was clearly communicated that all parties need to be onboard in solving this stuff,” Bennett said. “They agreed to work with the state.”

Conlogue said he thought LePage misinterpreted events to believe that the working relationship Millinocket leaders had with the state was a partnership, and that the partnership continued into the Dolby talks.

He placed the first real town-state discussion regarding Dolby in September and said that a Sept. 20 letter was the only time the word “partnership” was used in the correspondence — by state officials.

“I interpreted that as trying to work cooperatively, as [toward] some kind of a common goal, though maybe they felt differently,” Conlogue said.

LePage discussed an open-ended Dolby management agreement, with Millinocket paying $50,000 annually, at a meeting in Augusta on Feb. 1, Conlogue said. LePage was the first to mention the towns making more than a one-time payment, Conlogue said.

“He discussed an open-ended commitment from the towns and he thought we had some kind of a partnership to do that,” Conlogue said. “I said that we didn’t, basically, but he was of the opinion that we had this.”

“It was like, wow. That’s not where we are,” Conlogue added.

Town and state leaders might seem to be in a standoff over the landfill, but they have several options. State officials are seeking proposals from private firms to run the landfill as a commercial operation and a bill that would have the state fund landfill operations entirely is under review.

Millinocket’s council will discuss on March 22 whether to rescind its Dec. 20 resolve to make a one-time $50,000 payment for landfill operations, Conlogue said.