Audit shows slower than normal tax payments

By Dan West | Mar 11, 2014

Searsport — The town of Searsport is facing "a little bit of a cash crunch" according to its independent auditor.

The Board of Selectman accepted the annual town audit at their March 4 meeting. Independent auditor Fred Brewer presented the selectmen with the audit and gave them an overview of the town's financial situation.

The biggest problem facing the town, Brewer said was that tax collections were running behind where they had been in previous years. Searsport had collected around 88-percent of the property taxes it is due, while in previous years it had collected more than 90-percent at the same point in the year.

Brewer told the selectmen it would need to increase the amount it borrowed in the form of a tax-anticipation note from $1.2 million to $1.5 million to bridge the "cash crunch" they were facing.

Town Manager James Gillway said the town's interest rate for tax-anticipation notes is low, which makes them a good option for managing the town's cash flow.

Municipalities use tax-anticipation notes to borrow money, typically for one year or less and at a low interest rate, in order to finance its operations before tax revenue is received.

Brewer also noted that Searsport valuation has remained consistent over the last few years, and on a positive note its excise taxes were increasing. Brewer said this was likely due to an improving economy where residents can afford to purchase newer vehicles.

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