Sparse Turnout for Bond Hearing in Machias as Cuts Loom Either Way 

Paul Sylvain

“It’s like what you see on TV when someone hits the Megabucks and two years later, they’re broke. The county is the same way. They got that ARPA money, and a year and a half later we’re broke.”

That simple statement by Washington County District 1 Commissioner Billy Howard at the Oct. 14 public hearing on the upcoming county bond referendum summed up how the county blew through $6.1 million in federal American Rescue Plan Act (ARPA) money it received in 2021. The county has a brand-spanking new sheriff’s office building, but may be unable to pay to keep the lights on without a bailout from taxpayers. 

A disappointingly low turnout of about 40 citizens attended the hearing, held in the large third-floor courtroom in the county courthouse building in Machias. District 2 Commissioner and Chairman David Burns spent more than 20 minutes explaining how the county found itself virtually broke with no reserves to draw on to continue providing public services.

“This was started back in 2019, when the policy was put in by the former county commissioners that required that, anytime there was any money left over in a budget line, it was to be carried over in the same budget line the next year,” Burns said. “That continued until 2025. “They didn’t consider, at that time, that those lines [were] being overspent and they were being covered by funds that shouldn’t have been used.”

Continuing, Burns said, “And yet all I’ve heard about the ARPA money that came in for the new sheriff building, is during 2021 and ‘22, and thereafter, that the money was being used to cover those deficits, rather than as had been suggested. So that $6.1 million was used inappropriately, and covered deficits that should have been handled another way.”

Musical chairs with the TAN due date

Then Burns dropped an unexpected bombshell regarding the deadline the county must repay its $7.6 million tax anticipation note (TAN) in full to the lending institution or go into default.

“Every day, something changes, something new comes up,” began Burns. “We are back to the need for the bond. Right now we don’t have the income to pay the TAN back.” Then came the chairman’s unexpected revelation: “By the way, we learned today from the lending institution, that the maturity date on that [TAN] is, I think, mid February. So, we do have a little bit of a grace period there after Dec. 31.”  

Until last week’s public hearing commissions have said repeatedly that the TAN had to be paid in full, to include interest, no later than Dec. 31. That deadline was given as the main reason behind urging county voters to pass an $11 million bond on Nov. 4, and from which the bond would be repaid.

Investigations and possible repercussions

Jonesboro resident and Machias Finance Director Nick McDonald hinted that the county could be facing serious consequences for the misuse of the federal ARPA money. “All I know,” replied Burns, “is that because there were federal funds involved in this, the state attorney general office just contacted the U.S. Attorney’s Office to make them aware that the ARPA money was used for things other than what it was supposed to be used for, and that it was paid back.” 

He went on to say, “If they look at that and they find out that things that were done above and beyond [the allowed use of the money] there may be repercussions. Both those offices have the ability and resources to conduct forensic audits, if deemed appropriate.”

Though remote, one of those repurcussions if, in fact, the funds were misused could involve the federal government coming back on the county to return all or part of the federal ARPA money it received.

Asked if the commissioners had requested an investigation by the FBI into the management and use of the federal ARPA funds, Burns replied, “I have not considered that.” Pressed further, Burns was asked, “Don’t you think you might want to consider that?” Burns admitted, “The fact that the money was paid back fully should alleviate that possibility, but I don’t know.”

Washington County District Attorney Robert Granger said the previous week that conflict of interest rules prevented him from looking into possible criminal misuse or mismanagement of the ARPA funds. However, the DA announced, at the same time, that he had contacted the Maine Attorney General’s Office and U.S. Attorney for the district of Maine, And both entities agreed to look into possible criminal wrong-doing by previous county commissioners Vinton Cassidy, John Crowley, Chairman Chris Gardner, and recently resigned county treasurer Jill Holmes. However, as an investigative agency, the FBI is best equipped to follow federal money and its transfers through various bank accounts.

“I have no idea what they’re going to do,” continued Burns. “The way it was explained to me when you look at cases like the Unorganized Territory transfer, which was about $400,000, that’s a state concern. When you look at federal monies, that’s a federal concern. That’s why one office consults the other. I was told we were going to hear from both of those immediately, but haven’t heard from either one, so I guess that’s on the horizon.”

The chairman stressed, “We will cooperate in any way that we have to, to see whether or not there will be any repercussions. … The problem is that the [ARPA] money — while it was there — was misused.”

The commissioner also was asked if he believed the county was overcharged by Sheridan Construction of Fairfax, which was the general contractor for the new sheriff’s office building. “I guess if somebody comes forward with facts and figures that shows that something wasn’t appropriate, we have the authority to look at that, but I have no idea how much it would cost to build a building.”

Departments brace for personnel cuts

The commissioners were questioned at length about what they intended to cut to keep some level of services up and running if the bond failed at the polls. “We have asked each department to come up with cost savings and if necessary, reductions in staff,” Burns said, noting no suggestions have been offered by department heads. 

“If they are not willing to make that decision on their own, then we will have to make the decision,” said Burns. “They know better about the resources they have than we do, and it would be better if they cooperated with us and found areas that they could make cuts in services without endangering the welfare of people. We’ll cut what is necessary in order to pay our TAN and to keep  [essential] services going in this county, whether it’s police, the jail, the RCC [Regional Communications Center].”

A member of the audience demanded, and Howard agreed, that the commissioners would have to be more assertive if department heads came up with no cuts -- regardless of whether the $11 million bond passed or failed. 

“We don’t know what needs to be cut,” District 3 Commissioner Courtney Hammond said, breaking with Howard, who has pushed for cuts now.  “If the bond passes … then we can move forward and make the changes that we need to make to continue to operate the services at the level that they’re being offered. If the bond doesn’t pass — and this is the question that everybody keeps asking — what is your Plan B? We don’t know. We know that we’re going to run out of money in February or March, if the bond doesn’t pass.”

Continued Hammond, “If the bond doesn’t pass, we can’t wait till we run out of money. We have to do something. The state bailing us out? I don’t look at that as being even remotely possible. We are in uncharted territory.”

Hammond noted that the county is statutorily on the hook to provide certain services, related to such things as the jail and emergency dispatching services. “If there is no money, how are we supposed to do that?” asked Hammond. “So, yes, there’s going to have to be some changes made if the bond doesn’t pass.”

According to Commissioner Howard, it costs approximately three-quarters of a million dollars a month to operate the county government and its departments at the current level. In July, County Manager Renee Gray reported the county’s payroll amounts to about $200,000 every two weeks.

 Pressured by repeated questioning by one county employee, asking where would any cuts come from, Commissioner Howard spoke up, saying, “The sheriff will disagree, but patrol is the only place that we can cut right now, which will be the least amount of hurt to the citizens.”

Howard suggested that cutting the RCC is not an option. “We may not be able to get a patrol [unit] there,” said Howard, “but we can at least get a fire department or ambulance out. I’ve tried to weigh out which is going to affect the public the least, and [cutting patrol positions] is all we can do that will have the least effect on services.”

Howard went even further, saying that the cuts “may even happen if the bond passes, because the bond is only going to pay the TAN. That’s not giving us any money to operate on.” 

“Right now, we are in full limp mode because nothing was fixed with that ARPA money,” an angry, outspoken Howard said concerning crumbling county buildings. “We’ve got tons of issues with these main [county] buildings, but nothing was taken care of. They didn’t fix anything. That’s how I see the issues.”

He stressed, “There was total negligence on what that ARPA money was used for. We could’ve fixed the majority of issues in the county complex, and then reviewed what money we had left to go forward with on the new building, if there was any money left. But that’s my opinion only.”

Rep. Strout grills commissioners 

Maine House District 11 Rep. Tiffany Strout (R-Harrington) argued that it didn’t matter what the ARPA money was ultimately spent on, the simple fact remains that it was spent inappropriately..

“Whether we built the [sheriff’s] building, a homeless shelter, or an arena, it wasn’t appropriated correctly,” Strout. said. “The point is we need to stop crying about the sheriff's office. It’s time to move on. Even if we had spent the money on several projects, we’d still be where we are today. The funds were misappropriated from where they should have been.”

Burns agreed, with the lawmaker, yet again stated, “But that’s what got us into this predicament, because it had to be paid back.” Strout responded by reminding the chairman, “but it wouldn’t have mattered what it was spent on.”

“I didn’t see the guidelines,” added Commissioner Hammond, “but I knew it was for infrastructure purposes.” 

Noting that the county was in the hole for about $8 million in the TAN and interest, plus at least an additional $2.6 million budget deficit resulting from the 2019 reserve fund transfer policy change enacted by the previous board of commissioners, Burns again emphasized, “The point is, the [ARPA] money was used inappropriately and paid back.”

Strout maintained, “The money was misappropriated.” She ended her remarks by making a distinction between two key words. “It wasn’t applied to infrastructure,” said Strout, “it was spent on infrastructure. My understanding is they moved it out of infrastructure to operate, so you couldn’t pay for infrastructure.”

Burns conceded, saying, “Do you know how much interest we lost by that money being transferred into [a] general account? That’s what happened, and that is a fact.”

Citizens continued to press the commissioners on the previous board’s mistakes, with Pembroke resident Robin Hadlock Seeley questioning if the current board had taken to heart nine pages of “red flags” raised in the 2019 audit, which was not completed until 2022. 

Burns also reminded voters that the board had pledged to lower the initial ask of $11 million to $8 million at their Oct. 9 meeting. 

Later in the week, Washington County Budget Advisory Committee vice chair Ben Edwards notified the MVNO that the advisory committee had voted unanimously to endorse the bond. Edwards confirmed that the BAC would begin making “hard decisions” about the upcoming budget at their meeting this week. A final budget will not be ratified before voters head to the polls on Nov. 4, but Edwards hopes to give residents a sense of where things are headed, he said.