Budget crisis in Old Town may be easing

OLD TOWN – With the shutdown and restart of portions of Georgia-Pacific Corp.’s Old Town mill, city officials have spent more than a month juggling numbers in an effort to nail down a final budget for the year.

The Old Town City Council reviewed its budget for this fiscal year on Monday, and it appears that residents and businesses will make out better than expected.

“We really owe the governor’s office a debt of gratitude through working to bring about a partial reversal” at the mill, said City Manager John Lord. “The numbers you see before you are the assessed valuation of the fiscal year 2004 budget. Obviously, this is a much better assessment.”

The city expects the property value to be around $380 million, down from the $391,449,420 assessed value of a year ago, which is mostly because of G-P’s curtailing its Brawny towel production and displacing 160 workers.

Changes at the G-P mill in early April, which were projected to drop the assessed value by more than $67 million, threatened to cause a substantial shortfall in the Old Town city budget and raise the tax rate from 23 mills to 25 mills. Under the worst-case scenario, the city expected to be short by about $750,000.

Lord admitted the final valuation would not be available until mid-June but presented the council with two budget plans. Final budgets for both the city and school department must be adopted by July 1.

The first plan calls for a mill rate of 25 and would result in a gain of $7,222 for the city. The second plan calls for a mill rate of 24.5 and would result in a shortfall of $182,778, which would be split 50-50 between municipal and school departments. The higher mill rate would produce an expected $190,000 in revenues.

Councilors Jeff Plourde and Scott Cates each said they preferred the option that called for a lower mill rate.

“If we can make a little bit of a reduction and keep that mill rate down, business will stay in town and hopefully we can get some growth,” said Cates.

Cates went on to say he hoped the city “learned a lesson from this scare.”

He said a goal of the community should be to diversify to avoid relying on any one business for the majority of its tax revenues.

At the May 1 meeting of the council, officials directed municipal departments and the school department to cut $370,000 each from their proposed budgets.

“Ninety thousand sounds better than $370,000,” said Plourde.

The chairman of the Old Town school board, Jim Dill, said so many numbers have been flying around that he’s unsure what the $182,000 shortfall means to the school department.

He said the school board already chopped its proposed budget by $456,009. Then the council asked for additional cuts.

“It’s certainly better than $370,000, but it’s still something to look at,” he said. “Originally we reduced our budget by $270,000, then $300,000, and last week we were asked to reduce it by $370,000. That put us up to the $800,000 mark.”

The school board will meet at 7 p.m. today for a budget workshop at the Herbert Sargent Elementary School, 83 Bennoch Road.