OXFORD — Increases in the SAD 17 budget and expenses at the Waste Water Treatment Facility are being blamed for this fiscal year’s $1.50 tax rate increase.
The Board of Selectmen unanimously set the new tax rate at $14.70 per $1,000 of assessed property value at its Thursday, Sept. 7 meeting.
That means a $150 increase on a home valued at $100,000.
It is the highest tax increase of any of the eight SAD 17 district towns for fiscal 2018 and more than Norway and Paris tax rate increases combined.
Last year the board set the tax rate at $13.20 per $1,000 of assessed property. It was the town’s first tax increase in 12 years.
Town Manager Butch Asselin told the Advertiser Democrat that the increase was the direct result of the two issues – a $170,417 increase in the SAD 17 budget and an increase the expense line for the Waste Water Treatment Facility (WWTF) by $752,714 to pay for interest, principal and operating costs.
Asselin said the treatment facility budget in 2016 was $520,068, which was for bond interest payments. Only $176,000 was budgeted in 2015. The $28.5 million facility formally opened in October 2016.
More customers are needed to help lower costs, said Asselin. In addition to interest, the town is now paying on the principal and operating costs for the WWTF.
“The more businesses, homes and other users that get hooked up to the WWTF, the more revenues it will generate,” he said.
An attempt by officials to garner more tie ins through an incentive program outlined at an informational meeting in June only resulted in another half a dozen or so users, according to officials. At that time only 22 customers were hooked into the treatment plant.
While residents are not mandated to hook into the new sewer system if their system is operating properly, the town offered the incentive to save them substantial hook up costs if their system fails.
At this year’s annual town meeting, voters OK’d raising and appropriating $1.27 million for the treatment account, mostly to pay part of a 20-year bond that financed construction of the plant.
Asselin said other factors were involved in establishing this year’s tax rate including a $8,871 increase for the town’s portion to county taxes and an increase of $1,217,336 in the town’s budget that was approved by annual town meeting voters in June.
Asselin said revenue projections were revised and increased by $376,082 but this still wasn’t enough to match expenditures.
“The options for the Board of Selectmen were to raise the mil rate or transfer funds out of the undesignated fund balance to reduce the increase in the mil rate,” he explained.
Selectmen said at the Sept. 7 meeting that this fiscal year’s tax rate increase was offset by transferring $445,000 from the Fund Balance, which officials describe as similar to a savings account for the town.
“It benefits taxpayers but doesn’t hurt the town financially,” Asselin explained to residents last week.
Asselin said there is good news for qualifying homeowners who this year will see a reduction in their tax bill by $73.50 as a result of the $5,000 increase in the homestead exemption.
“However,” he cautioned, “because the state is only reimbursing the municipality 50 percent of the exemption, the town lost $9,019,950 in valuation or $132,593.27 in additional tax revenue.”
School money return
While many towns are blaming increased school budgets on its tax rate hikes, SAD 17 was able to return more than $1 million to the district towns this summer when the state approved addiitonal school funding.
On July 4, the Legislature enacted a budget bill with additional fiscal 2018 state funding. SAD 17 saw a return of $1,049,027. The legislation authorized school districts statewide to use 50 percent of the additional funding to lower the district’s local contributions to the total cost of funding K-12 education, unless the district had restricted the use of the anticipated funding, which SAD 17 directors did.
Oxford received the highest return of the overall $524,513.57 additional school funds. The town’s assessment was reduced by $99,447.77 or 19.16 percent of its annual bill.
The revised warrant assessment for the eight district towns covers the period of July 1, 2017 through June 30, 2018, which is the state’s fiscal year. Many, but not all, of the eight district towns also run on the same fiscal year.
Oxford’s reduced assessment was the highest of all eight district towns. It was followed closely by Norway which saw a $99,342.87 or 19.15 percent in its assessments.
Only Oxford officials were able to use the reduced assessment as part of its tax rate setting deliberations because the other towns had already set their tax rates.
SAD 17 Board of Directors Chairman Ron Kugell, who is also an Oxford resident and taxpayer, asked selectmen at their Sept. 7 meeting if the recent school district assessment return was part of the deliberation in offsetting a tax rate increase. Selectmen said that money was considered in the calculations.
Asselin said the money helped reduce Oxford’s local share, but the town’s share of the school budget is still high.
“Even with the reduced assessment, the town’s share of the school budget increased by $170,417. Had it not been for the additional monies from the state, the town’s local share would have increased $269,865,” he said.
The reductions are not received as a “check in the mail” but rather as a reduction in the monthly bills sent to the treasurers in each town around the 20th of each month. The reductions will begin in the September round of billings.
So in the case of Oxford, for example, September’s bill will be reduced from $329,868.68 to $319,923.90 and that reduction will continue through the June 2018 bill until the overall assessment is reduced from $3,958,424 to $3,858,976, according to school documents.
Other towns react
While all eight SAD 17 district towns will see a reductions in their school assessment ranging from a low of $19,564 in the town of Hebron to a high of $99,448 in Oxford, each town – with the exception of Oxford and Hebron – the notice of the reduced assessments came in too late to consider offsetting the tax rate for fiscal 2018.
In Paris, Town Manager Vic Hodgkins said the tax rate will remain flat at $16.80 per $1,000 of assessed property value. The savings from the reduced school assessment will be put into unassigned surplus.
In Norway, taxpayers saw an increase in their taxes of 70 cents from $16.50 to $17.20 per $1,000 of valuation. Town Manager Dennis Lajoie said he assumes the money will go back toward reducing next fiscal year’s taxes.
Norway’s Assessor Natalie Andrews, who is also a member of the SAD 17 Board of Directors representing West Pairs, told Norway selectmen at their Aug. 17 meeting that the municipal budget was flat compared to the previous year, and that “without the SAD 17 budget and the loss of personal property, we’ve remained consistent with where we were last year.”
In Harrison, Town Manager George “Bud” Finch said the Board of Assessors set the tax year 2017 mil rate on Aug. 15 at $10.65, down $.30 or 2.7 percent from the 2016 tax year mil rate of $10.95.
The new tax rate results in a reduction of $30 per $100,000 of assessed property value. The five-year average for the mil rate is $10.88 with a low of $10.69 in tax year 2013 and a high of $11.15 in tax year 2015, he said.
Finch, who has often expressed his dissatisfaction with the school district in terms of Harrison’s share of the budget, said he felt it was important to give credit to both the state (for added educational revenue) and the school board (for sharing a portion of it with taxpayers).
In Harrison’s case the fiscal year 2018 assessment for education has been reduced by $88,328, or 2.6 percent, from $3,417,357 to $3,329,029. Selectmen are expected to carry the funds forward into the next fiscal year, he said.
In Otisfield, selectmen said at their Aug. 17 meeting that the town’s mil rate for fiscal 2018 will increase 6.3 percent, or 85 cents, from the previous year, Chairman Hal Ferguson said. The tax rate would increase from $13.40 per $1,000 of valuation to $14.25, he said.
The increase in the town’s mil rate was “not the town’s fault” and could be attributed to an increase in the SAD 17 budget and an increase in the state’s Homestead Exemption, he said.
Ferguson said the municipal budget actually went down $2,000 this year and if it were not for other factors such as the school budget, the tax rate would be flat this year.
Otisfield’s share of the SAD 17 budget went up $141,000 and Homestead Exemptions went up from $15,000 to $20,000, which cost the town $2 million, though some of that will be reimbursed from the state, Ferguson said.
In Waterford following the March annual town meeting, selectmen said they expected the tax rate to remain at $15.25 per $1,000 of assessed value. It is the same rate as 2016.
West Paris Town Manager Wade Rainey said taxes have increased $1.35 to $18.80 per $1,000 of assessed property value. Because West Paris runs on a calendar year and not the state’s fiscal year, which runs from July 1 through June 30, Rainey said he believes the money will be used to reduce taxes during the next fiscal year.
In Hebron, Selectmboard Chairman Richard Deans said the board expects to set the new tax rate for fiscal 2018 at its next meeting in two weeks.
Because the rate has not yet been set, Deans said he is able to use the refunded $19,564 SAD 17 money in the calculations. He said, at this point, he does not expect taxpayers will see an increase in their taxes.