AUBURN — An assessing error at City Hall — to the tune of almost $1 million — is putting new tension on Auburn’s budget process just days before the City Council is set to vote on the school budget.
According to a memo from City Manager Peter Crichton to city and school officials, a recent review of assessing records found a shortfall in revenues for this fiscal year, which ends June 30, as well as fiscal year 2018-19, which begins July 1.
The shortfall, Crichton’s memo states, is $900,000 each year, which represents 1 percent of the overall budget.
“Last year’s tax rate was calculated based on revenues that we just didn’t have,” the memo said.
Crichton said Friday that in response to the error, each department will tighten its expenses for the rest of the fiscal year. Also, $900,000 in cuts will need to be identified in the proposed budget for the next year.
The School Committee held a special meeting Thursday and voted unanimously to trim its proposed budget for the coming year by roughly $380,000, bringing the department’s expected increase to taxpayers to zero percent — a figure originally demanded by some members of the City Council.
According to Crichton, the error was found at the end of last week, during a routine review of assessing records. He said revenues from one of the city’s tax increment financing accounts was double-counted, meaning the business included in the TIF received two tax bills for $900,000 instead of one. Both the city and the business subsequently realized the error before the business paid the extra bill.
Crichton declined to name the TIF district or the business involved.
He insisted that, for residents, the shortfall will not impact city services for the remainder of this budget year. However, he said each department has been asked to control expenses and save money from now until June 30.
He said he will also review all expenditures “to see if they are absolutely necessary before making them, and the city will leave several positions vacant “unless there is a critical need — and budgetary justification — for filling them.”
While Crichton said the shortfall “is obviously not a good thing,” he said finding $900,000 in cuts in a roughly $80 million budget “will be manageable, with everyone working together.”
Asked Friday, Mayor Jason Levesque had similar thoughts.
He said the reaction from the school and city departments has been positive, and has caused everyone to “work toward a common goal.”
Levesque said he wanted to give “a significant thank you” to the School Committee, who he said recognized the problem and is “proportionately doing their part to help with this.”
The School Department’s budget cuts made Thursday represent about 40 percent of the total cuts the city needs to come up with.
The City Council is still set to vote on the proposed school budget during a special meeting at 5:30 p.m. Monday, May 14.
Levesque said the error should also send a more pointed message and more urgency that Auburn “needs more valuation.” He said a record number of building permits were pulled this year in Auburn, meaning the city should expect more valuation in coming years, adding, “Auburn is built for growth.”
“Every organization, private and public, goes through errors,” he said. “I’m pleased, though, that it was discovered internally and it was fixed. We have a firm commitment to address our spending so that there’s no negative impact to the taxpayer.”
Going forward, Crichton said the city is reviewing its assessing practices.
His memo said: “I have also asked for the assistance of the Maine Revenue Services, which oversees municipal assessing in the state of Maine, to review the city’s assessing records. In addition, we will be taking other steps to ensure that this type of assessing mistake does not happen again.”
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