With repayment of a $2 million bond used to fund the withdrawal from RSU 12 due Jan. 15, 2016, the Wiscasset Board of Selectmen considered refinancing it at the board’s Tuesday, Dec. 1 meeting, and braced for the beginning of a budget season which, selectmen said, would be “brutal.”
The 10-year refinancing option presented at the meeting would single-handedly result in a 3 percent budget increase in 2016 to 2017, Chair Ben Rines said, and may require a special town meeting if payments begin before the annual June town meeting.
Wiscasset residents overwhelmingly voted to withdraw from RSU 12 in November 2013 and authorized selectmen to take out a $2 million bond to fund payments to RSU 12 associated with the withdrawal agreement. No payments on the bond have been made, approximately $1.75 million has been used, and total repayment is due Jan. 15, 2016, Treasurer Shari Fredette said.
An additional payment of $268,000 to RSU 12 is still outstanding, Fredette said. The town’s auditor advised the town to refinance the bond, Town Manager Marian Anderson said, and a 10-year repayment option from The First Bancorp at $240,000 a year was presented. The plan would cost the town approximately $375,000 in interest.
If monthly payments of $19,000 are made on the 10-year repayment plan, selectmen may need to hold a special town meeting to authorize $120,000 in payments before the annual June town meeting, they said. Repayment of the bond was not incorporated into the 2015 to 2016 budget, selectmen said.
The warrant article that authorized payment of the bond gave selectmen, “the discretion to fix the date, maturity, interest rate … and other details of said security,” language which may not necessitate a special town meeting if the funds were allocated from surplus, Anderson said.
The terms of repayment on refinancing are negotiable, however, and can be made monthly, quarterly, biannually, or annually, she said.
Selectmen requested additional repayment options, such as a 15-year or 20-year repayment plan, and more information before voting on how to proceed with refinancing; additional options will be presented at the Dec. 15 meeting. “We need to move pretty quickly on this,” Fredette said.
Payment for sewer system upgrades on Federal Street, approved by voters at the same Nov. 13 town meeting that authorized the withdrawal from RSU 12, is also due in January 2016, Fredette said.
A U.S. Department of Agriculture grant provided Wiscasset $226,000 in government funds for the project, which began over the summer, and is nearing completion. Wiscasset must pay the remaining $748,000, which has been accounted for in the 2015 to 2016 budget, town officials said.
With the proposed refinancing already pushing the 2016 to 2017 budget up 3 percent and the Wiscasset School Department also anticipating an increase, Rines said residents are facing a tax hike of at least 5 percent next year.
Selectmen continued to hear proposals which would require expenditures. David Anthony and Darryl Joudrey, of Siemens Industry Inc., presented the results of Siemens’ site assessment summary of the heating and ventilation systems in Wiscasset town buildings, and found several deficiencies.
Outdated equipment, non-operational ventilation systems, and systems no longer up to code were among the problems identified in Wiscasset buildings. Siemens developed a proposal for a service maintenance agreement for the town office, the Wiscasset Community Center, and the wastewater treatment plant.
The proposal will be discussed with town department heads and time will be needed to digest the results of the report before further action is taken, Anderson said.
Sun Cats Co-chair Susan van Alsenoy addressed selectmen during public comment to urge the town to move forward on the proposal to install a solar energy system on the town office and public works building.
According to Anderson, the town is working with ReVision Energy on the development of an energy agreement. The proposal to go solar would have to go through the budget committee before it could be added to the warrant for the annual town meeting, she said.
In addition, several nonprofits have contacted the town about placing funding requests on the warrant for the annual town meeting, Anderson said. With the exception of the library, Wiscasset has not placed funding requests from nonprofits on the warrant in the past couple of years, selectmen said.
The process of whittling down nonprofit requests began when selectmen determined previously voted-down nonprofit requests would not reappear on the warrant, Selectman Jeff Slack said.
With an increased need for food and shelter in the community, Slack said he would support learning about nonprofits and their services to Wiscasset residents.
Selectman Judy Flanagan made a motion to authorize Anderson to collect information from nonprofits, which passed in a 3-2 vote. Rines and Judy Colby opposed the motion out of concern for the burden increased expenditures to nonprofits would place on taxpayers if they were added to the warrant and approved.
Selectman decided the annual June town meeting will be held by referendum in a 4-1 vote, with Flanagan opposed.