A Sagadahoc County demand for reimbursement of a proportional share of the fiscal year 2008 budget has generated a potential legal battle facing the multi-county Jail Authority.
Sagadahoc County commissioners have also made a demand for the Jail Authority, which oversees operation of Two Bridges Regional Jail in Wiscasset, to freeze all expenditures except those specifically outlined in the current budget.
However, the Authority’s legal counsel objects to their assessment and instead believes the Authority must decline Sagadahoc’s demand for reimbursement of a proportional share of the fiscal year 2008 surplus.
The disagreement between the Authority and Sagadahoc commissioners and their respective legal counsels on the matter became a focus of the monthly Jail Authority meeting March 11.
The issue arose after Sagadahoc’s legal counsel, John Loyd Jr. of Eaton Peabody, wrote a letter dated March 4 complaining about the authority’s use of its budget surpluses at the end of fiscal years 2006-2007 and 2007-2008.
Loyd cited three options enumerated in the legislative act establishing the Jail Authority that the Authority can choose for allocation of its budget surpluses,
He determined the Authority used none of the options allowed under the statute, but in a letter dated March 9, the Authority’s counsel, Jeffrey Peters of Preti Flaherty, disagreed with the assessment.
“The Sagadahoc County Commissioners approved the Jail Authority’s fiscal year 2009 budget, including the use of a surplus to reduce the net cost impact of the fiscal year 2009 budget on the counties last spring,” Peters said. “As a result of their vote, more than eight months ago, they waived their ability to now disapprove of that budget.”
Peters added the Authority has been operating the jail in accordance with the budget and relying on Sagadahoc’s approval of the fiscal year 2009 budget. Therefore, he found it too late for Sagadahoc to challenge the budget now.
“Certainly, since we are more than eight months into the fiscal year 2009 budget year, at least two-thirds of the fiscal year 2008 budget surplus applied to the fiscal year 2009 budget has already been spent and could not be refunded without significant impact on jail operations,” Peters said.
Peters stated the Authority has not violated any statute and in fact its use of the 2008 budget surplus to reduce the impact of the 2009 budget on the counties complies with the relative statute.
“Furthermore, Sagadahoc County waived any right to demand reimbursement of the surplus when it approved the budget more than eight months ago,” Peters said.
In his written statement to the Authority, Loyd said the Authority ended fiscal years 2006-2007 and 2007-2008 with “sizeable surpluses” of $892,600 and $1.03 million, respectively.
The three options for use of the surplus in the statute he mentioned, include applying it the following fiscal year to reduce the rates, fees, rents or other charges the Authority established for services; applying it to reduce its outstanding capital debt or put it in a reserve account for that purpose if the financing documents do not allow debt reduction or, finally, using the surplus to make a proportional refund to the counties.
In Loyd’s opinion, the authority used none of the three options to determine the use of the surpluses for those particular fiscal years.
Authority members were in a quandary as to whether and how it should correspond with the Sagadahoc commissioners and decided to authorize Authority Chairman Sheridan Bond and alternate member Charles Leadbetter to compose a letter incorporating thoughts expressed during the discussion.
