Casco borrows from bank

By Dawn De Busk

Staff Writer

CASCO — For the second autumn in a row, the Town of Casco must borrow money from the bank in order to pay bills before property tax payments occur.

The amount that must be borrowed is $1 million; and the interest rate is 1.6% or about $4,000 — both of which must be paid back within 90 days, Town Manager Dave Morton told the Casco Board of Selectmen on Tuesday.

“We made our last school payment, and we are cash poor right now,” Morton said.

The monthly payments to School Administrative District (SAD) 61 are $500,000, he said. Also, the town’s first payment on its wintertime road maintenance contract is due in September, he said. Plus, there are other day-to-day and week-to-week expenses involved in operating a municipality, he said.

Another thing that factors into the need to borrow money from the bank is that the fall-time tax bills — revenue that the town counts on to operate — have been mailed out a little bit later than usual, he said.

“To stay solvent for next 90 days, we need a tax anticipation note, or TAN,” Morton said.

He explained that this summer the selectmen switched assessors, hiring the County of Cumberland Assessing office.

The tax commitment for 2014 was 60 days earlier than last year. However, that time frame is running behind the date for which the town tries to aim: early to mid-August.

“In defense of our current assessor, they had a lot of work to do to clean up the revaluation,” he said.

Two years ago, the property revaluation began after it was passed during a ballot vote. The referendum ended up on the ballot through the citizen’s signatures process.

The company, which ultimately received the revaluation bid, Vision Government Solutions, ended up getting behind during the second summer of property valuations. That resulted in a late tax commitment, and the town was forced to take out a TAN until tax payments were made.

According to Morton, the town should maintain an Undesignated Fund Balance amount that is equal to three months of the municipality’s operating costs. For Casco, that amount would be $2.25 million, he said.

“We have had a couple setbacks with the (Undesignated) Fund Balance,” he said, citing the citizen initiative referendum, which took money from that account to cover the cost of the revaluation.

In the future, “increasing our Undesignated Fund Balance will help carry the town through” situations like this, he said.

“In 90 days, we will be able to pay that TAN back and be able to continue to fund the town,” Morton said.

“Next year, with an early August commitment date, we will be able to function without a TAN,” he said.

 

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