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MACHIAS, Maine — Machias Town Manager Sarah Craighead Dedmon is planning to draft a warrant article seeking voter approval for a $314,000 loan to cover the town’s share of Washington County’s tax anticipation note, which is due by year’s end.
A public hearing is set for 5 p.m. on Nov. 19, followed by a special town meeting at 5 p.m. on Dec. 3, when voters will consider authorizing the loan.
Solar and wind ordinances, along with a proposal to allow the Machias Select Board to enter long-term leases, are also to be discussed and put to a vote at the special town meeting.
The Washington County Commissioners have asked the county’s 44 municipalities to pay their share of a tax anticipation note, or TAN, early, if willing and able, to help with cash flow.
Years of financial mismanagement have left Washington County without funds and facing an $8 million TAN due to Machias Savings Bank by Dec. 31.
Washington County voters rejected a proposal Tuesday to borrow up to $11 million to pay off the TAN by the end of the year.
At the Machias Select Board’s Nov. 5 meeting, Vice Chair Ben Edwards, who also serves as vice chair of the Washington County Budget Advisory Committee, recommended the town explore a five-year loan to cover its share of the tax anticipation note, citing delays in completing audits.
Machias’ share of the proposed county TAN, based on 2025 property valuations, is 3.93%, or an estimated $314,152.41.
Machias Finance Director Nicholas McDonald sent a memorandum to the Select Board outlining financing options.
A five-year loan at 4.2% interest would carry annual payments of $70,964.10 and total interest of $40,668.09. A 10-year option at 5.6% interest would reduce annual payments to $41,878.04, but increase total interest to $104,628.02.
“The 5-year option results in significantly lower total interest, though with higher annual payments. The 10-year option provides more flexibility in annual budgeting but at a substantially higher long-term cost,” McDonald wrote.
McDonald recommended the five-year loan as the preferred option, citing “the uncertainty surrounding Washington County’s financial position and the ongoing budget and audit issues.”
Once the audits are complete and the town confirms its undesignated fund balance, or surplus, a final decision can be made to “pull it from surplus or move forward with the loan,” Edwards said at the meeting.
At the December special town meeting, voters will have a chance to ask questions and weigh in on how Machias should pay its share of Washington County’s TAN. Since the county’s bond proposal was rejected, the Washington County Budget Advisory Committee has discussed adding the amount to next year’s county budget and tax assessment to recover the funds.
If a municipality pays its share of the TAN before year’s end, Washington County will exclude that amount from next year’s tax assessment.
Before Washington County accepts early payments, the county attorney must confirm their legality, because they could be considered a second tax assessment, which would be illegal, according to Edwards.
“I feel good about it, as far as having a prepared voter base,” Select Board Chair Jacob “Jake” Patryn said of the upcoming public hearing and special town meeting.
Edwards said he is also seeking input from residents on whether they are satisfied with the level of service now provided by Washington County, or if they support deeper cuts, which would likely mean layoffs in departments that are already understaffed and underpaid compared with other counties, particularly among patrol deputies in the sheriff’s office.
“These are the tough decisions everyone is going to face,” he said. “That is a direct effect on public safety.”
The total county budget will need to be between $14 million and $14.5 million “just to hold the line with county services,” Edwards said, representing an estimated 20 to 25% increase over last year.
The county’s budget was cut to about $12 million last year only because required expenses, such as health insurance, were removed as line items, making the budget appear smaller even though those costs were still paid, Edwards said.
“Effectively, what we’d be doing is correcting the mistakes from last year and actually creating a budget that’s sustainable,” Edwards said. “It was reckless what was done with the budget last year.”
Personnel policy amendment
The Select Board also approved an amendment to Machias’ personnel policy allowing the town to pay regularly scheduled part-time employees — those working more than 20 hours per week — for days when holidays or storms close their workplace.
The amendment would apply only to the transfer station, Craighead Dedmon said.
“I anticipate next to no budgetary impact,” she said. “This is not an uncommon practice.”
“I think this is great,” Patryn said.
The Machias Select Board is scheduled to meet next on Nov. 19, following a public hearing at 5 p.m.
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