“This is the largest increase in my tenure as chair of the county budget advisory committee," said Lewis Pinkham, who has served on the committee for 24 years. On November 21 the committee voted 5-4 to approve next year's Washington County budget, with a 22% increase in the amount raised by county taxes. The vote was preceded by a meeting that went for over three hours, with the session in the county courthouse being standing room only and with public participation taking place throughout the morning. This was the latest the budget committee has convened before submitting a county budget.
      As the discussion progressed, the public heard how a budget at first projected to be 37% was lowered to 27% with the removal of a new IT department and some use of opioid settlement funds for the jail. County Manager Renee Gray added that the budgeted 10% cost for health insurance was lowered to the actual number of 7% for health and 1% for dental coverage.
      A last minute motion from Calais Finance Director Crystal Gallina that was unanimously approved was to combine the reserve money allocated by all departments -- totaling $456,000 -- and remove it from the budget, lowering the tax increase to 21.99% for fiscal year 2025. The end result remains the largest increase the county has had to make on county taxpayers.
      Gray said that the reserve she budgeted with regards to county buildings is a necessary item, and zeroing out those funds does cause her some concern. "These buildings are very old, and the heating systems, elevators and roofs are unpredictable," said Gray. "When they fail, they will need to be fixed and paid for."
      Eastport City Manager Brian Schuth then made the motion to accept the budget, with the motion passing by a 5-4 vote. Voting in favor were Schuth, David Davis, Wendy Schoppee, Harry Fish and Nancy Harrison. Voting against accepting the budget were Lewis Pinkham, Meghan Dennison, Chris Loughlin and Crystal Gallina.

A lengthy process with no surplus
      Early in the meeting, Chris Gardner, chair of the Washington County commissioners, explained that what the county has typically done in the past was lessen the tax burden by offsetting some of it by utilizing county surplus funds. "What we thought we had in surplus was incorrect, as a recent audit has indicated," said Gardner.
      He pointed out that this year's budget increase does not equate to a 22% increase in spending but rather that there are no monies available to offset costs, as previously has been done. While it was believed that there was an undesignated fund balance of perhaps $1.6 million, it was discovered that those funds were actually reserved for capital accounts. Using the undesignated fund balance to reduce the county tax increase would mean counting the money twice. Those at the meeting then discussed whether to make it all up in one year or spread it out over the next few years.
      The process of budgeting $12 million for the county's day to day operations, public safety and services starts in August and is typically wrapped up in October, for the following fiscal year. During that time, the various departments submit their separate budgets. The committee then goes line item by line item to determine avenues to strengthen services while containing costs.
      "We have been through this budget line by line many times now," said Pinkham. "Quite frankly, doing so again at this meeting, after a series of very long meetings, I am not so sure what if anything we will find differently."
      Two patrol positions for the sheriff's office, slated to begin in January, were briefly broached as potential cuts that could be made to further reduce the tax burden. "Those positions the budget committee deemed were necessary months ago," said Gardner. "Now they are not needed -- is that the position the committee is considering? The only remaining cost savings would be achieved if we cut positions, and that is the reality of the situation."

Lack of timely audits
      “The reality is that this budget is what it will cost to operate and provide the services the county provides," said Gardner. "Our problem is that, with audits moving as slow as they have been, what we thought was a surplus of funds in reality is not. This problem was discovered when we changed auditors."
      "We have a completed 2020 audit, the fieldwork for the 2021 audit has been completed and questions are being worked on," said Washington County Treasurer Jill Holmes. "Stephen Hopkins is the current auditor who discovered the practice with surplus that needed to be adjusted."
      According to information offered earlier by Gardner, the budget committee had previously decided to change the county's accounting practices so that funds were assigned to reserve account lines for particular needs, rather than being placed in the undesignated fund balance, as it would be a better way of tracking funds until audits were completed. However, it appears that those funds "were counted as cash on hand," even though they were earmarked as a reserve line. "That's why audits matter. You could be double-counting your money here," Gardner said.
      Hopkins advises that, from a financial statement point of view, prior year surpluses cannot be shown as current year revenues. "When a municipality budgets to use a portion of its fund balance in one fiscal year, they are in effect budgeting for a loss," says Hopkins.
      Since the county budget committee, along with many other municipalities, is conducting next year's budget process while still completing its current fiscal year amidst playing catchup with audits, Hopkins says the situation requires a continual internal estimation process. "In this situation, the municipality would want to have a way to estimate what their current fiscal year results are and in turn what their estimated current fiscal year fund balance amount will be if they anticipate including a portion of fund balance to offset the amount to be raised by taxes," he says. "This internal estimation process would be continued forward in situations where a municipality may not be current with its annual audits."

Shortage of auditing firms
      The shortage of auditing firms in Maine has created a backlog that's affecting many municipalities, school districts and county governments throughout the state.
      Concerning the significant shortage of auditors in the state, Ellsworth CPA James Wadman says he was told by the Department of Education that 10 years ago there were about 65 firms conducting audits in Maine. Now there are only 19 firms, and some towns are having their audits done by companies located as far away as California.
      According to Wadman, among the reasons for the decrease are a number of retirements during the pandemic; the elimination of high school accounting courses, so fewer students go on to study accounting in college; and a difficult peer review process, which is required of firms every three years. "It's not worth it if they're only doing a few audits," says Wadman. "You have to be in it in a big way or not do it at all."
      Hopkins, who practices out of Scarborough, confirms he has seen a dramatic rise in requests for auditing services. "I have seen it in my practice, as normally I will receive maybe one or two unsolicited requests for proposals during a calendar year, though this year I probably received 10 to 15," says Hopkins.

Public safety remains a concern
      Many in attendance at the final county budget meeting expressed public safety concerns, with a number of people spoke offering gratitude and support for law enforcement and emergency response for the county.
      Emotional stories were shared by some of parking lots where cars rotate through for drug purchases, playgrounds with discarded needles and a frightened sense that things are dramatically changing Downeast. "Things are changing rapidly here," one resident stated. "And we need to change, too, and support those that provide for our public safety."
      Gardner steered his oft-repeated concern directly to the state legislature. "This legislature has not given one dime more to the state police since 1977 and in doing so has essentially ignored rural Maine and the growing problems that we are now faced with when it comes to law enforcement and emergency services," said Gardner. "It is not the state police directly at fault for lack of rural patrols but the legislature not funding that need. So we at the county level are left to deal with that."
      To support both emergency services and the sheriff's department in addressing the changing dynamic the area has been dealing with, the county has added six patrol officers and four emergency dispatchers to answer the surge in calls.
      A budget of $11,804,111, with a $9,879,014 portion being that raised by county taxes, now moves to the commissioners for their December 12 meeting, when it is likely to be approved. "As we have done in the past, we will support the decision of the budget committee; we always have," said Gardner. "Barring any unforeseen last minute piece of new news, I am of the opinion this budget will be accepted, and we will move forward."
      Gardner, too, is moving forward and will be in a different setting come next year. After 20 years serving the county as a commissioner, Gardner made the decision to not seek reelection this past November. "It has been a pleasure serving this county, but the time is right after 20 years to focus on some other things in my life."
      One thing Gardner did express at his very last budget committee meeting was a desire to not tarnish his time as commissioner by leaving the position knowing that public safety was cut in order to save money. "I will not do that," said Gardner.