ISLE AU HAUT, Maine — With steep cliffs, crashing waves and mysterious spruce forests, Isle au Haut’s wild landscape long has caught the eyes and hearts of visitors to the island.
These days, the twists and turns of governing the island are as dramatic as its scenery. Like most Maine communities, Isle au Haut — with a year-round population of 40, and a summer population of 300 — has an annual town meeting.
Island residents traditionally meet on the last Monday in March to elect municipal officials, vote for the town budget and set the year’s property tax rate. Those who run the island government wear many hats in order to keep the town ticking. When someone doesn’t do his or her job, islanders said, it affects everyone.
But in 2015, there was no town meeting. There was no financial audit, no elections (unelected selectmen continued to call the shots) and no landowner received a property tax bill. This murky situation is distressing and perplexing to many who live on the island.
“We’re in a state of limbo,” said island tax collector Lisa Turner. “It brings up this weird stuff — people blaming people and other nasty stuff. It just makes hard feelings.”
While what is happening on Isle au Haut is not ordinary, the problem of rural Maine towns struggling to manage themselves is becoming more prevalent.
In 2014, the manager of Reed Plantation in southern Aroostook County, Mitch Lansky, wrote in the Maine Townsman that small, isolated, rural communities with dwindling, aging populations are having a hard time keeping their towns functional.
Some towns can be “months or even years late for town meetings or tax bills,” wrote Lansky, with town books in disarray and where few citizens are willing to take town positions.
“Once a town has passed the threshold where self-management becomes difficult, however, the currently available help is not adequate,” he wrote. Help could come, he said, from the state or organizations like the Maine Municipal Association.
On Isle au Haut, some residents said they are unsure of the help they can get. For the moment, they are watching the calendar and reflecting on how things are supposed to work.
‘Kind of snowballed’
In a normal year, Isle au Haut’s municipal books close on Jan. 31, the budget is set at the March town meeting and the property tax bills are mailed in July, with payment due in September. Why did none of that happen in 2015?
First Selectman Landon DeWitt, son of Third Selectman John DeWitt, was quoted in the Ellsworth American last July as saying that the situation developed because he and former town treasurer Kirsten Barter, his fiancee, “got behind in bookkeeping.”
“It kind of snowballed,” Landon DeWitt told residents at a special town meeting last summer. At that meeting, residents expressed concerns about Barter’s work. One man said there was a two-month delay before the town cashed his motor vehicle registration check, and Turner said she had sent Barter four months of tax deposits but hadn’t received any receipts.
Barter resigned last summer, though not before paying herself $6,000 for the work she did in 2014, according to a town official. Landon DeWitt remains the town’s first selectman, earning about $10,000 annually for his work, though he and other town officials have not received any compensation for 2015. Multiple efforts over the last two months to speak with Landon DeWitt and Kirsten Barter have been unsuccessful.
“She certainly hasn’t embezzled any money,” Turner said of Barter. “But she didn’t do her job.”
The island’s 2015 fiscal year began Feb. 1, 2014, and ended Jan. 31, 2015. But its annual audit for neither the 2014 nor the 2015 fiscal year was completed. Islanders still held an annual town meeting and set the budget as usual in March 2014, but this lack of audit caused the 2015 town meeting and elections to be indefinitely postponed.
The one-year terms of the three selectmen elected in March 2014 have long expired, but they remain in their posts.
“When you have this going on, there’s no other authority than the selectmen,” resident Matt Skolnikoff said. “When they let you down, there’s no other place you can go to for relief and action. You say we can have elections to vote them out. But we can’t even have elections.”
Endless audit
Isle au Haut’s budget in 2014 was roughly $640,000, with most raised through property taxes. That money pays for education, administration, health, sanitation and fire protection. It also heats the town hall and helps subsidize both the community-owned Island Store and Isle au Haut Boat Services, which ferries passengers and the mail.
According to the Maine Municipal Association, state law requires audits every year, so a public accountant can examine financial statements to ensure they fairly reflect the financial condition of the municipality.
After Barter resigned, the selectmen appointed Belvia MacDonald — the mother of Second Selectman Dan MacDonald — as treasurer. Belvia MacDonald and the selectmen began gathering bank deposit receipts, bank statements and other missing information necessary for both the 2014 and 2015 audits — a process that began last summer and is still ongoing.
“There ain’t too much to tell,” said Dan MacDonald of the situation. “We’re just trying to get our paperwork done. We’re trying to get the audit done. It’s been damn aggravating. We keep running into roadblocks. The auditor needs all the information the auditor needs to have. If you’re looking for receipts and you can’t find them, you’ve got to come at it from the back door. You’ve got to figure it out. We’ve got to wait for the audit to be done before we can have the annual town meeting.”
Belvia MacDonald said organizing the town’s books has been a challenge.
“It’s been difficult,” she said. “There have been times when I thought, ‘Oh good, we’re close,’ but then something else will pop up.”
She also wasn’t sure why the audit wasn’t done for 2014 or 2015.
“I think the people in charge didn’t understand how it worked,” she said. “There’s a lot to it, and if you don’t understand it, it can get very confusing.”
In the meantime, this delay is costing Isle au Haut taxpayers. By last November, the island was supposed to pay Knox County $82,000 for its share of county services. By the third week of January, Isle au Haut owed the county an extra $1,300 in interest, which will keep growing as long as the town doesn’t pay.
“Isle au Haut is the only town in Knox County that hasn’t yet paid their 2015 taxes,” said Andrew Hart, the Knox County administrator. “I reached out to see if there was anything we could do. But there isn’t a lot, really, the county can do … To have it go this long is unusual. Most communities, if they forget to pay it, they might pay a few days of interest. Maybe a week. But we never see more than that.”
James Wadman, a certified public accountant based in Ellsworth, has served as the auditor for many Maine municipalities over the years, including Isle au Haut. He said small towns can have big challenges when it comes to managing the books.
“It can be difficult, especially in these small communities, to get people to take office,” he said. “There’s not a lot of people to choose from, number one. And a lot of times, people find themselves in these positions and they don’t have the training, they don’t really know what they’re doing, and sometimes, unfortunately, they don’t ask for help. And that’s what happened here.”
Wadman said other towns have lagged with their annual audits. Years ago, officials from a small town plunked six years of financial records on his desk and asked him to catch them up.
But a town not even issuing property tax bills for a year is a new scenario to him.
“I’ve never seen this situation, where they’ve never sent out tax bills,” he said. “They’ve got to get these tax bills out so they can get up to speed again.”
This summer, Wadman worked on the island’s 2014 audit, which he said was completed a year and a half later than usual. He’s now working on the 2015 audit, and by Friday, Jan. 29, had finally received the last documents he needed from the town selectmen and expected it would be wrapped up as soon.
What’s known is from the audit for 2014, which showed on Jan. 31, 2014, the town had $292,821 in various funds.
“It’s likely that these numbers have been depleted substantially. They’re kind of living off these balances,” Wadman said.
It raises a critical question: Is Isle au Haut solvent?
“I can’t answer that,” he said. “Right now, we’re almost a year beyond the year we’re trying to finish.”
‘Are we going to run out of money?’
Jennifer Greenlaw, a summer island resident who lives in Portland the rest of the year, said she really wants to see a solution to the financial turmoil on Isle au Haut.
“When this was all brought to our attention last spring, I contacted the state and basically tried to educate myself about small-town government,” she said. “In a situation when there’s an island with a very small population of year-rounders, what sort of option do the summer people have? I found out, basically not much.”
Greenlaw, who has a 30-year-background in finance, said she offered to audit the books or work with the auditor on her own time, but was turned down by town officials. She also said that summer residents don’t have any voting rights at town meetings and have to be invited to speak by a voting member.
“It’s frustrating,” she said. “Summer residents do make up the majority of the tax base, and we don’t get much of a voice.”
Longtime island resident Peggi Stevens called the special town meeting last summer. She said what is happening is without precedent.
“I’ve heard people say, ‘Oh, that’s happened before,’” she said. “Well, it’s never happened before, in all the years I’ve been here. We would have had a town meeting, if town officials had been competent. Nobody knows what we’ve been running on.”
At the moment, the town may be running on “voluntary” property taxes paid even though no tax bills have been sent, with some residents sending in a check for some or all of what they figure they owe. Turner said she received about $70,000 from these payments in December, which she called remarkable, but a drop in the bucket compared to what Isle au Haut needs to pay its bills.
“Now that we’re almost a whole year behind, are we going to run out of money?” she said. “It seems like there’s got to be some limit as to how long we can keep going without running out of funds.”
Turner said she expects Isle au Haut is likely to send out two years’ worth of tax bills in 2016.
Turner normally is paid $5,000 as tax collector, but hasn’t been paid for 2015, along with the rest of the town officials who earn a stipend. She has been paid for her full-time work as the teacher’s aide at the island school, where she and the lone full-time teacher have two students.
The town has paid tuition to send two other students to an off-island high school. The town hall is heated and the roads are being plowed, she said, but the island’s predicament remains a talk of the region — even at Turner’s mainland knitting group.
“No matter where you go, people ask if you’ve heard when they’re going to have town meeting,” she said. “I have this 93-year-old lady in my knitting group and that’s her question every time she sees me. She’s fascinated with the idea that we haven’t had town meeting.”