Searsmont approves borrowing up to $1 million, adjusts tax due date
Searsmont — Searsmont residents voted to allow the town to borrow up to $1 million for municipal operations while officials wait for a school budget to be passed before sending out tax bills.
The town has been unable to send out tax commitment bills due to the fact that Regional School Unit 20 has yet to pass a budget for the 2013-2014 school year. Selectman Bruce Brierley previously told the Republican Journal the money would be used as needed and paid off as soon as taxes are received.
On Tuesday, Sept. 10, Brierley said the town could borrow the money at an interest rate of less than 1 percent. He said because the town will only use the money as it needed, the full $1 million amount may not be necessary.
He continued by saying the town had encouraged residents to pay their taxes based on what they paid last year, which a number of residents have done. As a result, he said the taxes that have been received so far have helped the town's cash flows.
If a school budget fails to pass Sept. 17, Brierley said the town will still send out the tax commitment bills, but they will be based on last year's budget. He said if residents pays more than they need to they will receive a credit on next year's tax bill. If they don't pay enough then they would need to pay the town the difference.
In addition to borrowing money, residents also voted to change the date taxes are due and when interest begins to accrue on unpaid taxes.
Taxes will be due Oct. 31 and interest will be charged on any taxes that are not paid beginning Nov. 1.
The City of Belfast was also considering issuing a tax anticipation in an amount up to $3 million to maintain its cash flows. During a council meeting Tuesday, Aug. 20, City Manager Joseph Slocum told officials the city was making monthly payments to RSU 20 of $765,000.
Slocum told councilors the city could borrow the money at an interest rate of less than 1 percent.
The city was using its undesignated funds to make the payments. Slocum told councilors on Aug. 20 about a $1.9 million balance remained in the undesignated fund account and he didn't want the reserves to be depleted too much.
However, during a Sept. 3 meeting, Slocum said the city would not borrow any money to continue making payments to the district because the district could borrow its own money to pay its operating costs.
Republican Journal reporter Ben Holbrook can be reached at 338-3333 or at firstname.lastname@example.org.
Ben Holbrook is a reporter for The Republican Journal covering general news.
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