LINCOLN, Maine — Town leaders will have to save or cut $1.2 million from the town’s $6.6 million budget by June 30 to keep a series of recently discovered errors from increasing the town’s 19.86 mill rate, officials said Tuesday.
The Town Council reviewed the errors and their effect on the budget with town staff, attorneys and hired consultants on Monday night. One consultant, attorney P. Andrew Hamilton, warned that the errors will make a tax increase more likely in the 2013-14 fiscal year, which begins July 1.
“We will make it through this year. I think everybody should use this as an example of how to move through a dynamic and get through this year because next year will be tougher,” Hamilton said Monday. “It can be managed so long as people put their shoulder to the wheel the way they have been as I have seen in the last week.”
Councilors have set an executive session meeting on Thursday in which they might discuss probationary Town Manager Bill Reed’s performance. Councilors specified, at Reed’s request, that they would not discuss his performance during another executive session at Monday night’s meeting, Reed said.
Reed, council Chairman Steve Clay and Councilor Curt Ring declined to discuss Thursday’s executive session, which Ring requested at the end of Monday’s meeting. Thursday’s meeting will start at 7 p.m. The meeting’s agenda wasn’t written as of Tuesday afternoon, Reed said.
Reed said he would wait until Thursday to comment. He referred comment on his job performance or any councilors’ opinion of it to Clay. Reed said he looked forward to seeing the agenda.
“I think it is better to receive written documentation [of what will happen] because some people say things in haste,” Reed said Tuesday.
His six-month probation ends in late November, Reed said, and the council can dismiss him during the probation largely at its pleasure.
“If a council is ever unhappy with the management style [of its town manager], it is pretty much built into most contracts that they have discretion on resolving that,” Reed said. “Discretion is whatever they determine discretion to be.”
“There are a variety of things you can do,” he added.
In a memo to town leaders dated Oct. 9, Maine Municipal Auditor Services’ Mindy J. Cyr confirmed a $200,000 double-booking of revenues from the state Business Equipment Tax Exemption and the Maine Homestead Exemption program accounts in the 2011-2012 budget and an $809,000 underestimation of projected expenses in the town’s Tax Increment Financing accounts in the 2011-12 budget.
A memo from Reed to the council on Oct. 2 was the first public disclosure of the errors. Under questioning from Councilor Rod Carr, Cyr said she was the first person to discover an error, the $200,000 double-booking.
Cyr’s report did not disclose a $575,000 overestimation of projected revenues that town workers discovered in the town’s four TIF accounts in the 2012-13 fiscal budget. The town has not yet committed its state tax for this year’s budget, though that usually happens this month. Cyr’s audit focuses only on the 2011-12 fiscal year.
Acting on Hamilton’s advice, councilors elected Tuesday to restart the budget process they followed last spring. They will hold a public hearing on the budget at 6 p.m. Oct. 24 and work to adopt a budget on Nov. 5.
Councilors will commit taxes to the state on Nov. 6, but allow prepayment this month. Under their tentative schedule, new tax bills will be issued Nov. 8-9 and will come due on Dec. 15 and May 15, the schedule states.
Among the things councilors will consider is a list of $501,433 in budget cuts that Treasurer Gilberte Mayo outlined to Reed in a memo. Officials believe the cuts would have minimal effect on town services while almost halving the $1.2 million shortfall.
Another $366,882 in expenditures could be saved by expending Tax Increment Finance money instead of tax funds, though Reed said that as much as 20 percent of the proposed savings might not qualify as acceptable under TIF fund-use regulations.
Ring and Hamilton praised town workers’ performance during the last two weeks, saying that Assessor Ruth Birtz, Treasurer Gilberte Mayo and Reed had performed diligently and with great integrity in finding the errors and devising solutions.
“You have a community with a low mill rate,” Hamilton said. “Arguably, there should have been a year earlier than now that you should have collected more from taxpayers. The flip side of that is that taxpayers actually got a break in terms of the amount of tax they paid so this is not a bad situation and it has also been subject to the light of day early on.”
“This process resulted in the community knowing that this was an issue to be addressed early on, so it could have been addressed,” Hamilton said.
Hamilton said he had no doubt that the errors resulted simply from human fallibility. There is no indication, he said, of incompetence, corruption or the violation of any laws arising from the errors.
Clay agreed with Hamilton, saying that Lincoln’s financial position, and personnel, are very good.
“The auditor caught the mistake at the only time the auditor could catch the mistake — after the fiscal year was done. That’s why you have an audit,” said Clay.
This happens a lot.people paid good money to do simple math,can’t do the job,yet continued to be employed.
As long as you have human beings doing the recordkeeping mistakes will occur whether the records are kept electronically or by hand(which almost noone does today).
That’s why it’s always good to have a second set of eyes to double check.
As long as you have no accountability in government (but I repeat myself), you’ll have continued errors occurring. Usually by the same incompetent drones again and again.
Does anyone else ever wonder why these errors NEVER go the other way and it is discovered that government agency has MORE money than they thought they had?
In my experience, government agencies or departments almost never turn back surpluses(usually required by law/ordinance) at the end of their budget year to the general funds. The reason that I’ve seen given is [legislative to agency/department]: you asked for X funding last year and you didn’t use it all. You’re asking for more funding in the coming year but you didn’t spend everything that you were given last year, so how can you justify your request for more funding in the coming fiscal year?
So it’s easier to spend up to their funded limit than to try to justify a request for increased funding. And that’s what 99% of them do.
If the mistakes were really random mistakes then you would expect as many errors resulting in too much money being found as too little. I was merely pointing out that we NEVER see the former. I wonder why.
Oh, I see what you’re saying…I suspect that public expectations likely play a role in what’s reported in the media and what’s not. For example, it’s not reported after a holiday weekend how many motorists safely reached their destinations because people generally expect that holiday travel will occur safely(the norm), but rather how many weekend motor vehicle accidents get reported because they’re the anomaly. How bored would you be after reading how many government agencies were within budget at the end of the fiscal year?
State revenues as compared with budget projections reported by Sawin Millett are another matter because there’s some general uncertainty about the accuracy of projections because of the dynamics of the economy. A short while ago, Millett reported a surplus in State revenues and only this week reported revenues in the red.
Not in Lincoln
Wow. This is just crazy.
I would say that a $1.2 million dollar budget error is, in itself, evidence of incompetence. It would be absurd if someone weren’t fired over this.
Certainly seems like someone should.
Reed has done a good job protecting himself with public disclosure of this sordid affair.
Exposure of the shenanigans that prevailed from TIF misappropriation attempts from First Wind is needed. Interim town manager Birtz , 2008 (who was also the clerk with Lisa Goodwin in the First Wind fiasco in the town) , must be investigated.
Sorry , This town should be checked for any spending over 10k, not under 100K.Of course, on Nov 6th, they will try again to change the charter to allow a freer hand in keeping the public out of the fiscal process, again. This is a BIG No Go for sure.
Lincoln should not be trusted with a small piggy bank, let alone any purchase of significance.
Sorry Lincoln, every penny will now be counted, and audited.
Now remove lobbyist Carr,the Clay(s), Phinney and Ireland(of the planning board) and other self-servers from any involvement in town affairs. Boot Birtz for good measure.
As needed , get rid of the superintendant of RSU-67 by demand with the other self-servers on the school-board.