Finance staff: $5.2 million reserve, TAN repaid; audit pending and legal fees tracked by department

Nate, a finance staff member, told the Finance Committee that the city currently has about $5.2 million in the bank and that a previously issued tax anticipation note has been repaid with interest. He said the department expects to finish its memo and send a final budget package to council members early next week.

The report matters because staff said the final budget will include negotiated elements such as the police union settlement and an estimate for the clerks’ union, and because the audit remains incomplete. Nate and Ashley, both finance staff, said they are continuing daily work with the auditors and expect more definitive answers soon; the manager also discussed setting an end-of-month deadline for the auditor and scheduling a follow-up meeting if needed.

Finance staff briefed the committee on new budget-versus-actual sheets covering year-to-date results through April. Ashley said the packet includes department-level expense breakdowns and color coding to show where departments are running below or above the 83.3 percent fiscal-year threshold. She and Nate noted some items — for example, county tax payments — will naturally appear high because timing caused a full-year charge early in the year.

Committee members asked for explanations of large variances. Staff said capital improvements showed nearly 200 percent of budget largely because of an unplanned Redbridge Road culvert payment of roughly $1 million; staff said the city received the cash reimbursement for that work but the timing of encumbrances and receipts made the fiscal-year accounting appear over budget. Staff also cited roughly $809,000 in reimbursements from DEP that were recorded this year.

Several council members pressed staff about rising legal fees. Steve (council member) asked whether there is any limit or approval process at city hall for departments to engage outside counsel. Nate and others said the finance team has begun tracking legal services by department, which they expect will clarify which departments are driving the overage and allow better budgeting next year. Staff named specific recent drivers, including contract and land negotiations and work related to Maine Organic matters and some human-resources issues; they also recommended increased use of MMA legal where appropriate because that service is covered by a flat fee the city already pays.

On next steps, staff said they will circulate a change log and the final data, finalize the manager’s memo over the weekend, and present a final overview to council at the upcoming meeting. If audit items are not resolved by the stated deadline, staff said they will convene a follow-up meeting to press the auditor for details.