HERMON, Maine — A recent controversy over the transfer of economic development revenues into the town’s checking account to meet payroll costs has prompted town officials to look at changes in the way the town handles tax billing.
Town Manager Clinton Deschene said last month that in order to address a cash flow problem related to the town’s April 1 due date for property tax payment — which comes at nearly the end of its fiscal year on June 30 — he transferred more than $500,000 in revenues from the town’s tax-increment financing district into the town’s checking account.
He said he did so because it appeared that the town did not have enough money in its checking account to meet payroll obligations. As it turned out, the funds were not used because enough cash came in to cover expenses.
“We ran short on cash. We made a transfer from one account to another. There was some concern it was a reserve fund. In the end, we [determined] it was not a reserve,” Council Chairman Timothy McCluskey said during a council meeting Thursday night.
The difference proved to be a big one. State law and the town charter both require that town councilors authorize transfers from reserve accounts, though not from revenue accounts.
Councilor Tony Reynolds was among those who questioned the move and asked that the council take a closer look at it.
“When I put this on the agenda, I thought this was a reserve fund because Clint and [economic development consultant] Ron [Harriman] and all the councilors, including myself, had called it the [tax-increment financing, or TIF] reserve for probably the 6½ or so years that I’ve been on the council,” Reynolds said.
“Well, it’s not a TIF reserve. It’s a TIF revenue, which I found out after a letter was written to the [town’s] lawyer,” Reynolds said.
Muddying the waters, he said, were “conflicting” and “confusing” statements Deschene made during the council’s March 15 meeting.
“I wasn’t accusing [the manager] of spending the money on his own but we definitely need a policy in place so everybody’s covered,” he said, adding, “We still need to know and not two or three weeks after the fact.”
Resident Timothy Richardson also questioned the transfer.
“The impression was given at the time of the [March 15] discussion that [the money] was being spent … and now it has come to light that it wasn’t spent,” he said. “That’s troubling because it seems as though [there is] a definite lack of communication between the town manager and the council.”
McCluskey disagreed, noting that Deschene informed the council last year that he likely would run short on funds because of the timing of tax payments.
Richardson also was displeased that some councilors want to revisit the concept of two tax due dates.
“You can’t seem to understand what the people said. The people said that they didn’t want two tax dates, so work with it. Work with it,” he said. “Don’t criticize, don’t condemn, don’t put the fault on me. You’ve got to come up with another way of paying your bills. Have the town manager work a little closer and you won’t have these problems.”
McCluskey said that to ensure the town doesn’t run into the same problem in the future, council members will consider policy measures for dealing with cash flow problems.
Councilor Sharon Nickerson suggested the town consider putting the tax due date matter out to referendum, noting that last year’s vote against it involved “very few people.”
McCluskey agreed, noting that turnout in November will be strong because of the presidential election.
Deschene and several Town Council members have said splitting property tax payments over two dates would smooth out peaks and valleys in the town’s cash flow. Last year, however, voters rejected a warrant article that would have done so.
Councilors learned of the transfer through a memo dated March 5, according to memos and council meeting video footage related to the issue. That Deschene did not seek council approval before transferring the funds generated some heartburn in town.
McCluskey said last week that the the council would have been informed on March 1 but a meeting scheduled for that date was canceled because of a storm.
So, Hermon residents opposed the warrant vote, and now to referendum? Remember the first new school vote did not pass, then by some trick another vote came into play, and it turned out to be YEA!
Same thing here?
Richarson and Tony always drag out there “40 voters on demand” anytime they want something opposed
It was over 150 voters at the annual meeting who were opposed to the split tax date and the turnout was one of the highest in Hermon history. This was all orchestrated by Clint to force this issue and give him access to more money for pet projects. Hampden dodged a bullet by not hiring this clown.
Oh ,does hampden have 13 mil taxes ,cue the laughter,Hermon is one of the most well run towns in the state ,rolling in money,you obviously dont know whats going on ,the state refused to repave Billings rd ,their road, towns people said screw it we will ,at a cost of 1.4 million ,700,000 put into Annis rd last year, all by voter approval, name another town of this size that could do that on their own,their arent any, low taxes, great roads and all the needed services, the most popular town in the area to move to,check with Ron Harriman on that ,it isnt even close when you compare Hermon to anyone , ALL under Clint’s leadership !! get a clue,Hampden should be so lucky.
Yes, the Town paved the Annis Road, which clearly needed it bad. The problem is that by the State authorizing the Town to pave the road, the Town accepted full responsibility for the road indefinitely. So by Clint grandstanding on this issue, the town now has a greater liability that must be added to the budget every year instead of making the state pay for the upkeep.
not true , as a matter of fact the state put Hermon at the top of the list on another project because they did this ,the Hermon corner project.Oh an there aint no making the state do it, they dont have the money they dont do it period.
Funny, The state was in the process of doing the Levant side as Clint took over the Hermon side! You’re only ONE person pal! Quit speaking for the entire town!
O and they were against moving the monument too same people
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150 people did not vote against split taxes. 150 attended the meeting and it was by no means a lop sided vote against it. Better to go to the booths in November and do like Tony always says “let the people decide” a small bunch of trouble makers should not speak for all us. Tony sure likes to use that line when it works for him by bringing out a handfull of problems to vote! Its time for town meeting to go away simply based upon a small number of people deciding what happens to a town with a population of 5500+.
The Council thinks a referendum would better represent the town (i.e 2000 residents voicing their opinion) instead of 150 people controlling the whole issue. And, the Council has the authority, by charter, to change the tax date to whatever they want, without voter approval. They prefer to let the people decide.
Tony Reynolds appear to be little more than a rabble-rouser who wants to keep Hermon in the Dark Ages. I’m all for low property taxes, which Hermon has developed a well-deserved reputation for, but there are a few things that need to be upgraded in Hermon that Reynolds always seems to oppose.
The only heartburn was in Richardson,anti everything ,always personal and vindictive, who through his surrogate Tony brought it up, doesnt matter whether the meeting was cancelled, read your packet Tony,then you will see the memo . who BTW ,should resign for feeding Richardson info thats private.see archived meeting video when avail,.and questions to Richardson, which he refused to answer, regarding whether he had viewed town checking account info.Attorney’s should look into this !!!!
Maybe the BDN should run a story about conflicts of interest in this town. How about this – a plow contractor submits a bid, is awarded the contract because he is the lowest qualified bidder but then is asked to step down from the council due to a perceived conflict of interest because he opposes Clint’s spending of taxpayer money. On the other hand, Bill Scott’s wife works directly for Clint and Bill benefits every time the budget is approved and his wife gets a raise. Or how about this grand-daddy – Candidate for Council Don Pelletier opposes Clint’s spending policies, runs for Council and wins. A recount is requested and surprisingly additional votes are found for his opponent after the votes are stored in Clint’s office.
oh nothing like the plow contractor who cant plow for crap, who has it now and his daddy is the one who is the rabble rouser ,dont go there dreamer ! Oh and Pelletire is another buddy of Ricardson and Tony, its all personal nothing else.
The Council has no direct say in who gets what for a raise. They approve the budget as a whole. The decision of raises is done by Clint only. Please stick to the topic being discussed.
It’s amazing how ignorant some people are. The votes are sealed the night of the election and then stored in the vault at the town office. They were not opened again until the recount.
Hey everyone, this sounds like Newburgh.
Except this town mgr is top notch and honest