Penobscot County received no bids on a $23 million loan to fund the county in 2026 by the set deadline, County Finance Director Brenda Palmer said on Tuesday.
The loan was sent out for bids on Jan. 3, 2025 and had a Jan. 12 deadline.
The $23 million loan is needed for the county to operate until municipalities pay their share of the county tax, Treasurer Glenn Mower said in a county commissioners meeting on Dec. 31.
Because the county runs on a calendar year instead of a fiscal year, its budget is set by Dec. 31 while the majority of municipalities decide their budgets in June. Municipalities do not pay into county taxes until their budgets are set, leaving the county without funds for the first six to nine months of the year depending on when tax bills are sent out.
This difference has required the county to take out tax anticipation note taxes to have cash on hand and pay bills before they receive the property taxes. These loans accrue interest, with a former county administrator saying this large of a loan may create roughly $1 million in additional costs.
Local officials across the county have called for Commissioners Dave Marshall, Andre Cushing and Dan Tremble to change the county’s budget year to a fiscal year to solve its problem of low cash flow and avoid adding an interest to the budget.
The loan proposal was sent to Machias Savings Bank, Camden National Bank, First National Bank and Katahdin Trust Company as well as being posted as a public bid, Mower said on Tuesday.
The note is meant to be issued “on or about Jan. 19,” according to the proposal.
It’s not clear what will happen if there are no bids for the loan. Mower did not respond to a request for additional information.
Former County Administrator Scott Adkins said he had to “convince” banks last year to bid on the loan because of questions they had on the county’s finances and only received bids because he told them the county was working on changes to the budget.
“I talked to banks last year, and I had to convince them. I put my own reputation at stake by saying ‘yes,’” Adkins said in an interview on Jan. 1. “They were asking the same question; ‘Scott, your TAN keeps growing, what are the commissioners going to do?’ And they would ask me questions about the fund balance, and they would ask me questions about the audit.”