Mount Desert board weighs tapping reserve to blunt $775,000 rise in school and town debt service

The Mount Desert select board received a detailed review of the town’s capital improvement plan and debt-service outlook, and staff recommended drawing $173,000 from a debt-service reserve to blunt a projected $775,000 increase in combined town and school debt service.

Alex, a town staff member who led the presentation, said the recent $7.6 million bond included about $6 million for Mount Desert Elementary School and $1.6 million for the town. He said the town side of the new debt service is roughly $167,000 while the school side will add a little over $600,000, producing about $775,000 in new annual debt service the town must cover through property taxes.

Alex argued that using the $173,000 debt-service reserve this year would reduce the immediate tax impact and that the town could replenish the reserve over time — for example, by restoring it in small annual increments. "This is the year," Alex said in the presentation, explaining the recommendation to apply reserve funds now and resume annual contributions thereafter.

Board members pressed for clarity about which portions of the bond hit which budgets and asked whether tapping the reserve would create a recurring burden. Staff responded that the majority of the bond principal and interest obligation sits with the school and that, although the reserve use would lower the one-year spike, it does not eliminate the longer-term debt-service pressure.

No formal vote to expend the debt-service reserve is recorded in the transcript excerpt; the item was presented and discussed in detail. The board indicated it would continue to consider the presenter’s recommendation as it finalizes the FY2027 budget and related CIP allocations.