OLD TOWN, Maine — The loss of hundreds of thousands in tax revenues with the exit of the Expera Old Town mill has City Manager Bill Mayo asking the city council what they want to do. City leaders answered Monday by saying they should do whatever it takes to keep the tax increase low.
“We want 3 percent. Make it happen,” Councilor Linda McLeod told city officials.
Based on projected budget figures, the proposed fiscal year 2016-17 budget is $15,361,616, a decrease of $1.68 million or 9.87 percent compared to this year’s $17,043,568 budget.
The decrease is not enough to offset the loss in mill revenue. The result is a projected property tax rate that is nearly $2 more per $1,000 of assessed value than the city’s current property tax rate of $21.16.
The project tax rate is “$23.01, which would be about 8.7 percent more,” Mayo said. “That’s with no fund balance or allocations for capital [project expenses] or TIFs [tax increment financing].
“I’m certainly open to hearing any suggestions,” the city manager said.
McLeod and council president David Mahan both suggested using a portion of the fund balance to offset costs to keep taxes from rising by more than 3 percent, and directed Mayo and Finance Director Miles Greenacre to research whether any programs, such as economic development, can be paid for using tax increment financing.
“Everyone I’ve spoken with knows there is going to be a tax increase. They know that because of the mill [closure],” Mahan said. “But 8 percent is a big number.”
Town leaders are wrestling with the numbers as an abatement request for the defunct mill’s taxes still hangs over their heads, City Assessor Travis Roy said after the meeting.
Expera Specialty Solutions of Kaukauna, Wisconsin, acquired the assets of the former Old Town Fuel and Fiber pulp mill for $10.5 million on Dec. 5, 2014, out of a bankruptcy auction. The mill was restarted but Expera announced in late September that it would close the facility at the end of 2015, displacing about 195 millworkers.
Shortly after restarting the pulp mill, the owners of the Expera Old Town mill requested an abatement in the taxes of the 40-acre mill property’s value and it was decreased last year by an estimated $25 million, down to just over $19 million, Roy said. Expera is asking for another $9 million reduction in the property value, which would result in a $600,000 reduction in its tax bill, he said. The first abatement hearing isn’t until later this summer.
Equipment and items within the closed mill, and the former Lincoln Pulp and Tissue in Lincoln, were sold at auction in April.
“This gives me the goal,” Mayo said at the end of the budget discussion.
He said he would have new, retooled figures for the council to look at next week.