2015-04-17 / Front Page

Annual warrant taking shape

Kennebunkport article features $8 million budget
By Duke Harrington Staff Writer

KENNEBUNKPORT — Selectmen and budget board members in Kennebunkport put the wraps on their final recommendations for a $7.87 million annual operating budget during a joint session April 9, but the final look at how the proposal might affect local tax bills remains to be seen.

That’s due in part to a decision reached unanimously by selectmen at that meeting to take a $458,236 credit to the town from the Maine Public Employers Retirement System (PERS) and stash it into a reserve fund, rather than apply the full amount to the local assessment for education, as anticipated by the school board.

Town Manager Laurie Smith said at the April 9 meeting that the final budget recommendations on the municipal side, plus the town’s share of the $40.19 million RSU 21 budget — due for final approval by the school board April 27 — would add 14 cents to the mil rate, hiking the local tax rate to $7.77 per $1,000 of valuation.

However, RSU 21 Business Manager Bruce Rudolph wrote in an email Tuesday that the Maine retirement system credit is already baked into the cake so far as the school budget is concerned.

If the entire credit is not applied to Kennebunkport’s share of the RSU 21 budget, that same $458,236 will have to be raised in local taxes, he said, which would push the mil rate up another 24 cents per $1,000 of valuation, pegging the tax rate above $8 per $1,000 of valuation for the first time since the last town-wide revaluation in fiscal year 2009.

The Maine retirement system credit comes from a $1.2 million fund initially created from local overpayments to the retirement system in the 1990s before Arundel joined the school district, then augmented by interest and investment income.

The RSU 21 board had been using interest and investment gains on that fund to make its annual retirement fund payments. The state, however, has recently cast a dim view on this practice due to re- vised accounting standards, and ordered the $1.2 million account rolled into the school district’s regular budget.

For their part, Kennebunkport selectmen feared a funding cliff should they apply the entire credit to this year’s bill from the school department.

“It’s a very odd circumstance,” Smith said. “We’ve already appropriated the funds and had the funds to send to Maine PERS (public employers retirement system) to develop the credit, and now we’re taking it back. So, it’s not your normal course of action.

“The thing about taking a one-time decrease is that it’s nice that year, but then you are going to see an even bigger increase the following year,” Smith said. “Our mil rate could go up $1.50 in one year.”

Selectmen plan to use the new reserve fund as needed to smooth out future bumps in the mil rate, Smith said.

In other last minute adjustments to the municipal budget April 9, selectmen and budget board members each gave some ground. Selectmen agreed to add in $2,500 they had previously cut from the $5,000 increase requested this year by the Graves Library, while budget members agreed to donate $1,000 to the chamber of commerce.

“The reason I was in favor of cutting the library request is that the town does not run the library,” Selectman Sheila Matthews Bull said. “The library has its own endowment and I find it odd that they come back to the town for more money.”

“I like the library as much as anyone, but for me, I’m a fiscal conservative and my No. 1 job in this town is to keep taxes under control,” Selectman Edward Hutchins agreed. “Not everyone in this town is wealthy. I’ve seen people taxed out of this town.”

However, selectmen soon relented in the face of library support from the budget board, and the revelation that, over the past five years, the inflation adjusted annual rate of increase in library funds has been about half the balance of the town government.

Meanwhile, the budget board gave in to strong support among selectmen for the chamber, even though few saw a direct benefit to the town, which they said does well at attracting tourism on its own.

“I don’t think it’s right to give tax money to somebody else’s operating budget when they can handle that through their fee-for-membership structure,” said budget member Kathryn Leffler.

“What a lot of people are concerned about is this becoming a foot in the door to future funding requests” said budget member David Betses, who noted that the town of Kennebunkport is not even a member of the chamber.

“Why not become a member?” he asked. “I would be far more inclined to that. That makes a lot more sense to me than a donation.”

By the time the budgeting decisions were over, selectmen agreed that they had spent a fair amount of time beating up a relative pittance in the pot.

“We’re very fortunate that these are the biggest concerns we have this evening,” Hutchins said, as the two groups prepared to confirm the balance of the $7.8 million municipal budget.

“And now we’re going to go through millions of dollars in a matter of moments,” Selectman Stuart Barwise said.

And so they did.

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