MACHIAS — More than 55 voters attended a special town meeting Wednesday, Dec. 3, where the majority approved a $314,152 loan to cover Machias’ share of Washington County’s tax anticipation note, along with a commercial solar ordinance, a wind energy ordinance and long-term lease agreements.
There was minimal discussion at the hourlong meeting, most of it focused on clarifying the town’s process for repaying its share of Washington County’s $8 million tax anticipation note, or TAN, due by year’s end.
Ben Edwards, vice chair of both the Machias Select Board and the Washington County Budget Advisory Committee, said the town must pay its share of the county TAN either now or next year through the county tax assessment. He said taking out a five‑year loan now will save taxpayers interest because the town’s rate will be lower than the county’s.
“And, so to be clear, if we don’t pass this, we are still going to pay this money in a month,” Edwards said. “It’s going to be rolled into our tax bill from the county.”
Machias Finance Director Nick McDonald said the plan is for the town to pay no interest by using money from its undesignated fund balance to retire the loan before the next tax commitment, eliminating any extra cost to taxpayers.
McDonald estimates the town’s fund balance at $2.8 million. He said he wants to wait until the 2024 and 2025 audits are complete before spending any of it.
The town is taking a loan out of “an abundance of caution,” Edwards said, to ensure the results of the audits confirm the expected healthy fund balance in Machias.
Years of financial mismanagement have left Washington County without funds and facing an $8 million tax anticipation note owed to Machias Savings Bank by Dec. 31.
To ease cash flow, the Washington County Commissioners have asked the county’s 44 municipalities to pay their share of the TAN early if they are willing and able.
Washington County voters rejected a proposal Nov. 4 for the county to borrow up to $11 million to pay off the TAN by year’s end. As a result, each municipality’s share of the TAN will be added to its tax assessment in the next budget cycle unless it pays the county early.
Edwards explained how the county fell into such a deep hole, stressing that many people — including himself — have reviewed the finances and found no indication of fraud or willful misuse of funds.
“No money got lost,” he said.
In 2018, the county adopted an accounting procedure that carried unexpended funds from specific budget line items into the next year. But those carryover amounts were often also recorded as revenue at the bottom of each department, “so essentially they double counted unexpended funds,” Edwards said.
“It sounds unusual, and it is,” he said.
Edwards said a long string of “negligence” over five or six years added up “little by little,” while an influx of COVID-era American Rescue Plan Act, or ARPA, funds was used for cash flow, further masking the county’s $8 million shortfall.
The ARPA funds were nominally earmarked for construction of the new $6.5 million Washington County Sheriff’s Office building. When the bill came due, the county had to pay the contractors, Edwards said.
“Of course, the building was built and had to be paid for,” Edwards said. “That’s how we end up with this $8 million deficit.”
Machias’ share of the proposed county tax anticipation note, based on 2025 property valuations, is 3.93 percent, or an estimated $314,152.41, which is the amount voters approved the Select Board to borrow.
Edwards also discussed the county services from which Machias residents benefit, including the Washington County Sheriff’s Office, Jail, Regional Communications Center for emergency dispatch, Registry of Deeds, Probate Office and District Attorney’s Office.
At the special town meeting, voters also approved a commercial solar energy systems ordinance and a separate wind energy systems ordinance, and authorized the Select Board to enter into long-term lease agreements.
Town Manager Sarah Craighead Dedmon said the solar ordinance is relatively conservative compared with other Maine towns, requiring a 150-foot setback for large-scale commercial solar projects, with a waiver option to reduce it to 100 feet if all abutting landowners agree.
As drafted, the wind ordinance sets requirements and enforcement for construction and operation of wind energy facilities, including a municipal review process for procedures and performance standards.
Craighead Dedmon said consideration for solar and wind projects involve a “very lengthy public process,” including public hearings and Planning Board review before final approval.
She said that if the town does not have its own ordinances for solar or wind systems, the projects would have to comply with state regulations.
“The goal is to give the town some regulatory voice in the process, by having an ordinance” to govern these types of projects, Craighead Dedmon said.
She said most municipalities include an article each year at annual town meeting asking voters to authorize the select board to enter into long-term lease agreements.
The Machias Select Board realized it did not have the authorization when preparing to enter into long-term leases for land at Machias Valley Airport, where aviators can build hangars.
“That’s the purpose of this article,” Craighead Dedmon said.
The projected revenue from one lease is about $500 a year, but the town would see most of the benefit from increased tax revenue on the hangars and the high-value airplanes kept there.
