HARTLAND – With more than 80 residents on hand to hear bad news, selectmen painted a dire picture Wednesday night of the state of the town’s finances.

“This town is in trouble,” First Selectmen Harry Gould said.

He and Third Selectman Mike Brown explained that not only does the town owe SAD 48 about $400,000 in overdue school payments, it owes $70,000 to Consumers Water for hydrant rental. There also is the possibility Hartland owes an outstanding fine of $18,000 to the Maine Department of Environmental Protection.

All this happened, Gould said, because the town failed over the past five years to set its mill rate high enough. “We voted [in town meeting] to spend the money but we never raised the money,” he said.

He said the town had proposed an agreement to SAD 48 to pay the $400,000 back at 6 percent interest. Four payments would be made: October 2008, $75,000; April 2009, $125,000; October 2009, $75,000; and April 2010, $125,000. SAD 48 has yet to vote on accepting the payment arrangement. Gould said the interest, which would total about $24,000, would have to be raised in next year’s budget.

Gould said that in order to save as much money as possible, some of the expenditures approved by voters this year were not going to be made, including $5,000 to the Irving Tanning Community Center and $560 to Kennebec Valley Community Action Program. He said only emergency road repairs will be made and on Nov. 17, the town office will move from the Hartland Academy building back into the former town hall. The academy then will be listed for sale.

“There is not a whole lot left to cut,” Gould said. “We are down to the bare minimum in personnel. We don’t even have anyone to do the sidewalks this winter.” At least three town employees were laid off and all the wood on the town wood lots was sold.

Gould said town residents “have been great in paying their taxes,” which were due this month. “They are paying November’s and April’s [2009] taxes.” Residents have already paid $160,000 toward April’s taxes, he said.

Gould also told the residents that there “never, never was any question that our kids were not going to be able to go to the Hartland school. Our town owes the money, not the kids.”

Gould also read a resignation letter from Second Selectman Greg Tasker, but tabled any action, hoping Tasker would change his mind.

Although the board has refused to let veteran town manager Peggy Morgan, who had been out of the office on medical leave, return to work, citing the financial situation, some residents are laying the blame for the money woes on the selectmen.

While the board was out of the room in executive session discussing hiring attorney Erik Stumpfel of Bangor to represent the town, residents were circulating two petitions to remove Gould and Brown from office.

“Peggy isn’t going to be blamed for all this,” one resident commented. “The entire board must shoulder the responsibility. She worked for them. They were the final say.”

Shortly after coming out of executive session and voting to hire Stumpfel, Gould was asked about the petition. He told residents in attendance, “No one will drive me out of this position, but you have the right to vote me out.”

The board fired Morgan earlier this month in what Gould later admitted was an illegal meeting. The selectmen rescinded that action but Morgan’s status with the community remains in limbo.

The board set the next meeting for 6 p.m. Tuesday, Nov. 18, at the town hall.

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