Facing a 20% Tax Increase, Bar Harbor Council Makes No Changes: Yet
Council tackles "big and heavy and hard" budget
BAR HARBOR—The Bar Harbor Town Council quickly adopted a tentative municipal budget with expenditures of $28,023,0499 at its Monday night meeting, which (excluding an executive session) lasted approximately an hour.
For revenues, the tentative March 5 budget calls for $13,397,226 in “other revenues,” $411,712 in cruise ship funds, and $455,976 in parking funds.
The budget will go to public hearing on March 19. In Bar Harbor, the budget first goes to the Town Council and Warrant Committee. Recommendations are made. The voters will have final say on the budget at the June town meeting.
“I don’t want to go to the voters with a 20% tax increase if I can avoid it,” Councilor Earl Brechlin said.
The budget in discussion is FY2025, which runs from the beginning of July 2024 through June 30, 2025.
New Town Manager James Smith wrote in his memo to councilors and Warrant Committee members in January,
“The priority infrastructure bond, school architectural plans, solar array, and fiber buildout were all projects long overdue, and I am confident that the residents and taxpayers of Bar Harbor will be pleased with the end result of the work that will flow from these.”
In January, Smith said that he hoped to facilitate more conversation between the Warrant Committee and Town Council prior to the budget’s finalization. He said he saw himself as an arbitrator between the two groups to make a budget that the community can get behind.
At the March 4 meeting, Brechlin said, “When you look at the municipal portion of the budget which is about half the budget. It’s about $13 million vs $26 something and change for a total. We haven’t cut a percent out of it. What has the council cut out of it? We haven’t found a single thing? There has to be something there. I think it’s just a philosophy that we can throw our hands in the air and say we can’t do anything about this. True, that’s most of it, but I don’t believe that there’s nothing there that we can cut.”
“You can’t get blood from a stone. There may not be all the cuts we can make,” Councilor Matt Hochman said earlier about finding places to reduce the budget.
“We still have opportunity to look at, dig into, and change the budget,” Chair Valerie Peacock said. The library and cooperating agencies are added into this current draft budget. “This does not incorporate any of the Warrant Committee recommendations.”
Vice Chair Gary Friedmann wanted to talk about the Warrant Committee recommendations to increase some fees (such as parking fees, yacht docking fees) and cut some capital improvement expenditures as well as the Higgins Pit solar array project and criticized the committee’s work.
“I had some issues with the Warrant Committee’s recommendations,” he said.
He didn’t agree with 7% cuts to multiple CIP lines, particularly Glen Mary Pool and called the potential cut insensitive. Glen Mary has multiple line items in the town’s budget. Warrant Committee members had issues with paying for hypochlorite (water disinfectant) for a currently inactive pool, which is a $4,200 expense. There’s another Glen Mary line item for cleaning that the Warrant Committee questioned. That is $2,915.
Friedmann also didn’t think the town should add money for the Village Improvement Association, believing the $25,000 was an arbitrary sum.
The Warrant Committee had suggested increasing parking fees as well, and using that $1 suggested potential increase to fund the new Conners Emerson School. Some councilors worried about blanket increases. Others supported it with the stipulation that communication stating that “one dollar for every parking permit goes to building a new school” be prominently displayed.
The Warrant Committee’s suggestion to not fund the Higgins Pit solar array was derided by Friedmann. The Task Force on the Climate Emergency recently recommended that the town keep the recs for the downsized project rather than selling them.
“I think it was ill advised on their part to dive into anything that they didn’t know anything about,” Friedmann said of the Warrant Committee. “It wasn’t really part of the budget discussion that they should have been having.”
“The bond was sold; investors have purchased it. They are guaranteed their return on their investment for 10 years,” Smith said. “With Higgins Pit and that bond, it’s not cullable. We’re in that for ten years. It’s not a viable solution to save anything.”
“It was an unwarranted attack on a project,” Friedmann said, adding that the Higgins Pit suggestion felt like a “cheap shot” from the Warrant Committee. “To me, it just looks like a slap in the face. That doesn’t enhance the relationship between Warrant and Council.”
“Defaulting to an opinion of no ill intent, I think they were just looking at large line items,” Councilor Kyle Shank said, though he said he understood how Friedmann felt.
The bond’s original intent was to have no impact to the taxpayer, Friedmann said. “I felt it was rude.”
At this stage in the budget process, the Warrant Committee offers recommendations to the Council, places for the Council to explore and look at. These are not the Warrant Committee’s final recommendations on the budget. Hochman said that he appreciated the work that the Warrant Committee put in even if he didn’t agree with all the recommendations.
Friedmann, Hochman, and Councilor Maya Caines all expressed displeasure at the Warrant Committee’s suggestion to reduce multiple CIP accounts by 7%, which they said seemed like a blanket statement.
“Everything else felt very nit-picky and ridiculous for lack of a better word. I’m like the 7% across the board, I just don’t think we can do that. That’s not fair. That’s not equitable, which was the word that was thrown around,” Caines said of the Warrant Committee’s recommendations after its six and a half hour long meeting.
Hochman worried about using cruise ship revenues, which likely won’t be there next year because of the recent federal court decision upholding disembarkation limits, to reduce property tax burden. Friedmann agreed. “They’re destined to be cut dramatically.”
However, both Shank and Brechlin said that they appreciated what the Warrant Committee had tried to do.
Shank said, “In our discussions, we have cut nothing on expenses. We’ve added expenses in the two things we voted for.” One of the Council’s stated goals has been to try to decrease expenses and they have not done that, he said. The places with the most impact that the Council can control, he said, are decreasing waste costs and increasing parking revenue. “Either some revenue has to go up or some expense has to go down,” he said.
“That 7% makes such a small dent, my real question to Seth is, is it really worth it?” Canes asked. “Seth” refers to Warrant Committee Chair Seth Libby. While Libby chairs the committee and brings forward the recommendations to the Council, he did not necessarily vote in favor of each recommendation.
Smith said the CIP decrease is a stop-gap measure. “Yes, you can avoid it in the short run, but it will still come due.” Taking the measure today will compound future problems, he said. “There needs to be some real thought in what that’s going to look like to kick the can down the road.”
However, Shank suggested that the CIP decrease is not that much in the bigger budget picture.
“Of the 1.2 million, 80% is from parking and killing the solar pit,” Shank said of the Warrant Committee recommendations. “The total impact of the CIP decrease is like $160 grand.”
Smith also cautioned against a large jump in parking fees rather than an incremental one. When creating more revenue or fees within the budget, he stressed, the town has to make sure that revenue will be there or else the town will have a structural deficit.
Smith said he asked the Warrant Committee for supporting documents for its choices. Peacock stressed that the parking revenue is about having a parking program. Thinking about the impacts of parking and what the town is trying to accomplish and how it impacts people and the goals of the community is more than a revenue goal, she said.
“That’s the number one thing that my friends feel in their heart. They have to pay for parking when they come into town,” she said.
Shank said that he feels the Warrant Committee were looking for large line items that could help reduce the property tax burden.
“I appreciate the Warrant Committee for the work they tried to do, but it is hard to shave budgets,” Councilor Joe Minutolo said. “We’ve taken so many big infrastructure bites in the last few years. It’s tough.”
Smith said that he had probably cut approximately $750,000 before presenting the first draft budget to the Council. He thought the proposed budget pretty lean and very demanding on the staff to do more with less. He hopes to have some options for some fees to offset the budget increases at the Council’s March 19 meeting.
People voted for the school bond and the sewer bond in recent years, which has increased the overall budget. Minutolo called it a tight rope, a balancing act.
Caines suggested in the future doing a better job of educating voters when a bond comes out about what that means financially. Peacock said that she feels like the town did educate the voters.
“This is where you actually feel it,” Peacock said with inflation and compound costs and bonds.
“I am now feeling the weight of the work that we have. The budget is big and heavy and hard. Housing is big and heavy and hard. Managing tourism and the cruise ship issue that we have in front of us is big and heavy and hard,” Peacock said. She appreciates the staff, council, the committee members, and volunteers for the work they’ve put into it.
OTHER BUSINESS
The Council also approved two taxi permits. The first was for WGR Transportation. The second was a new taxi license for Coastal Compass Taxi. The council approved the renewal of special amusement permits for Atlantic Brewing/Mainely Meat BBQ and Atlantic Brewing Midtown.
COUNCIL COMMENTS
Smith said that the town received a grant for public works, but didn’t have the numbers available. He said he’d talk about it at the next Council meeting. He said there is a report on the town pier, which he thinks is positive on the first review. He hasn’t yet digested the report.
During the Council comments, Brechlin said he’d like an auto reply on emails since they weren’t supposed to individually reply to emails. He also wanted to thank the town’s attorney for his work on the cruise ship case. “That was one of the most entertaining decisions by a judge I’ve ever read.”
Hochman wished that the MDI Drama Department members break a leg in the drama festival. He also asked that people when they react to stories about issues going on in town to be kinder. “Some of the comments directed toward the Council were pretty nasty. I don’t think there’s any need for that.”
“I would hope that when we discuss things, we give a certain amount of respect,” he said.
Friedmann said he’d like for the town to require any businesses who are in the hospitality sector that require new employees and put pressure on employee housing to have build the units to house employees for their new establishments. Houses in residential areas being bought for employee housing is “driving people out of town” and increasing the cost of housing, he said.
Shank asked Smith to look into the commercial real estate listing period and vacation rental-2 licenses. If a commercial property has a VR-2 permit and sells, then that permit does not transfer.
Peacock mentioned a March 25 forum about the local options lodging tax at the Jesup Memorial Library. The public is encouraged to attend. It will be from 5-7 p.m.
Minutolo and Caines had no comments.
LINKS TO LEARN MORE
The Town Council’s page on the Bar Harbor website
The latest packet.
The town’s budget documents.
To watch the meeting.
Disclosure: Shaun Farrar of the Bar Harbor Story was elected to the Warrant Committee last year.
Perhaps it is time, past time, to demand full transparency in Town Council/Manager spending on legal fees. What are the protocols by which individuals or the group consult with lawyers. How much did APPL cost the town? How much did it cost the town to settle Leonard Leo instigating an officer to violate a resident's rights? ( It would've been two settlements if police leadership had not resisted pressure from Leo and the former Town Manager Sutherland in another instance.)
And then, there was the sweetheart deal given disgraced former Town Manager Kevin Sutherland to spend more time with his family after he was caught on tape colluding with APPL and to keep mum on where the Town Council skeletons are buried. That $80,000 or so could've gone to better uses.