FORT FAIRFIELD, Maine — Many residents have accused the town of spending too much over the past two years, but even they were unaware of just how dire Fort Fairfield’s financial situation has become.
A recent audit shows that as of June 30, 2022 — the end of the town’s fiscal year — Fort Fairfield had only $199,000 in the bank and $875,000 in outstanding short-term debt. On June 30, 2020, the town had $946,000 in the bank with no outstanding short-term debt. With another $400,000 borrowed in July 2022, the town’s short-term debt totals $1,275,000.
Details of the financial problems townspeople have suspected were there for months have come to light under the new interim town manager, who has made actual numbers public in the interest of transparency of government.
“The reason your taxes are going up is not because of the revaluation or the school budget,” Interim Town Manager Dan Foster said, while addressing residents Wednesday night. “The school budget has only gone up less than 6 percent in the last two years, but our town budget has gone up 76 percent [in that time].”
Transparency and bringing Fort Fairfield back on its feet are Foster’s biggest goals, he said.
Foster, who served as manager 15 years before retiring in 2013, stepped back into the role last week after the departure of former town manager Andrea Powers, who several councilors had accused of not providing them with accurate and timely budget information.
Though Foster said that he prefers not to place blame on anyone in particular, including Powers, he did attribute the town’s rising mill rate this year — from 19.5 to 26.5 per $1,000 of property value — to financial decisions she largely kept from the public and other town staff.
Fort Fairfield’s government had come under scrutiny long before its new interim manager made the town’s actual finances public. Faced with rising tax bills due to the town’s first revaluation in more than 20 years, some residents pointed to the new ambulance service as one department whose costs could be cut.
After feeling that town officials had dismissed their concerns, some residents formed a controversial citizen advisory committee to give councilors recommendations on the yearly budget. But after councilors passed a surprise budget in June, many committee members said that the town ignored their recommendations and was not being transparent about the town’s financial state.
But the core argument over the town’s finances kept circling back to the new ambulance service.
The fire department’s budget was $140,000 four years ago, long before the town started its own EMS service in 2020. In 2021 and 2022, that budget — which includes fire and EMS — has been $1.3 million and $1.7 million, respectively.
That same department’s revenue only totaled $400,000 in 2021 and $200,000 this year so far, Foster said.
The Fire/EMS department has begun to see an increase in revenue after switching providers for ambulance billing, Foster said. The town’s previous service had not been billing insurances in a timely manner, which resulted in the town losing even more money.
But the primary reason for the town’s increased taxes today is its excessive borrowing to make up for revenue that the EMS was not bringing in, though expenses kept rising, he said.
In late June, the council voted 3-2 in favor of a $5,258,950 municipal budget for the 2022-23 fiscal year, with a projected revenue of $6,494,535. When the county and school tax contributions of $277,209 and $2,203,432, respectively, are included, the total budget is $7,739,591, a $676,026 increase over last year’s of $7,063,565.
Foster also attributed the new 26.5-mill tax rate to an assessing error in which a calculation form was filled out incorrectly last year that Powers declined to address.
“The tax assessor added state revenue sharing of $170,000 twice. When the assessor found out [about the error] in April, he went to the town manager but she did not address it with anyone,” Foster said.
That error made it seem as though the town received more revenue than it actually did, thus justifying the 19.5 mill rate that councilors passed in 2021. In reality, that rate should have been 22.5 mills, Foster said.
At Wednesday’s council meeting, Foster promised the more than 50 residents attending that he would find strategies to reduce the town’s budget over the next year and reduce the tax burden on residents.
Councilors unanimously approved Foster’s recommended tax anticipation note of $800,000, which is money borrowed against the expected tax revenue to be collected. Fort Fairfield sends out tax bills every October after approving the mill rate in September.
The tax anticipation note will help the town avoid a revenue shortfall as it postpones certain payments, including county taxes, until early 2023, Foster said.
Though most residents at Wednesday’s meeting did not speak during the public comment period, Foster’s statements received strong applause and many praised the former manager for stepping up during the town’s time of need.
Gary Sirois, a Fort Fairfield resident for 58 years, said that Foster’s leadership is a step in the right direction, and encouraged those who can afford it to pay their tax bills in full as quickly as possible.
“Those of us who can need to do our part and make our small contribution to get our town budget on track,” Sirois said.