Lincoln Paper's layoff of 200 workers at its Lincoln, Maine, paper mill a factor as town considers up to about 15% cut in municipal services budget; officials expect mill to apply for reduced valuation due to destroyed boiler, two idled paper machines

Debra Garcia

LINCOLN, Maine , January 29, 2014 (Bangor Daily News) – The 200 layoffs at the local paper mill last month are among the forces compelling leaders to push for up to a $600,000 cut in the town government budget they hope to approve by July 1, officials said Wednesday.

Town Manager William Lawrence described the $600,000 as a goal that he informed town department heads of during a recent meeting. They have until the end of February to see if or how close they can come to achieving it, he said.

If achieved, the $600,000 cut would represent about 15 percent of the town's $4.3 million municipal services budget, Lawrence said. He described the reactions of town officials as "lots of long faces."

"That's a lot to cut from a $4.3 million budget but right now we are in good financial shape," Lawrence said. "We don't want to get in danger so we shall make appropriate moves now to prevent it."

RSU 67 Superintendent Ray Freve has discussed the situation with Lawrence and agreed to limit school expenses as much as possible, Lawrence said.

Lincoln Paper and Tissue LLC co-owner Keith Van Scotter announced in early December that an explosion of a recovery boiler at the mill on Nov. 2 forced the indefinite but not permanent layoffs. He and other company officials have said they will not seek to replace the boiler, a key element to the papermaking components of their mill, until market conditions improve. Such boilers can cost as much as $100 million to replace.

The mill's three tissue machines continue to run, company workers have said.

In a petition the company filed on Dec. 16 with the U.S. Department of Labor seeking job retraining and employment services for the 200 affected workers, company officials also disclosed that the loss of a tissue contract to an Indonesian firm caused the job loss. The petition did not mention the explosion. The last of the layoffs was due to occur by Dec. 19. The federal government approved retraining program funding for Lincoln on Jan. 17.

Another factor motivating the cut is very early word from state leaders that state government revenue sharing with municipalities would be cut drastically in the next fiscal year, Town Council Chairman Steve Clay said.

"The state is saying they will cut revenue sharing this year. We don't know by how much. That was the problem last year. We were going to cut it [the town's budget] last year but there were five to 10 proposals on the [state revenue sharing] budget and we didn't know what they were going to do," Clay said Wednesday.

Town leaders expect Lincoln Paper to eventually apply for a reduced mill valuation that takes into account the destroyed boiler and unused paper machines, Clay said. How much that would affect the town's budget is undetermined.

Town officials already have been ordered to keep expenses as low as possible. Tax Assessor Ruth Birtz in October raised the town's mill rate from $19.86 per $1,000 of valuation to $22.96 -- about $155 on properties worth $50,000 -- in response to declines in the town's total valuation and an increase in the town's budget, she said.

Town leaders opted to hire Public Safety Director Dan Summers in August to replace Fire Chief Phil Dawson when he resigned and Lawrence when he was promoted to town manager. They plan to create a fire captain's position by July 1 to assist Summers in that department's administration. Overall, the creation of Summers' position is expect to save the town about $36,000, they have said.

They increased the town's transfer station fees and are in talks with Maine Department of Transportation officials to see about widening a significant portion of West Broadway, which they believe would add significantly to the number of businesses there. Construction of a natural gas pipeline to the mill and West Broadway businesses is due to start by summer.

The town's budget committee usually starts its reviews in late February or early March, Clay said. The budget is usually approved by June. The fiscal year ends June 30.

Clay complimented Lawrence for displaying what he called good crisis-prevention skills.

"It is going to be difficult anytime you cut anything but we have to be reasonable on what the future might bring," Clay said. "When it gets to a point where you have to make that big a cut there will be some services that suffer. We will see how it turns out when we get the first budget in a month or two and take it from there."

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