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Rumford mill asking town to lower paper company's taxes
Mill to take its case to Board of Assessors
RUMFORD -- "Dec. 22, I think, is when we officially emerged (from bankruptcy). We felt really good about that. And less than a month later, we didn't feel very good at all because of some of the initiatives that came out with new ownership."
Those were the words spoken by Tony Lyons, mill fiber supply director and spokesman for the Rumford Paper Co., to Rumford town officials and about 30 citizens in a meeting last Wednesday. On most everyone's mind these days is the potential that NewPage will shut down its Rumford Paper Co. subsidiary.
Lyons, mill manager Jerry LeClaire, and mill controller Kelly Berry sat down with the Board of Selectmen and Town Manager Carlo Puiia for 75 minutes asking for a reduction in the paper mill's taxes and that the board reduce spending in the coming year.
LeClaire said, "NewPage and Rumford Paper Co. are both are going through some current cost-reduction programs. What we're facing as a business is a declining market. What we have to do as a result of that is to improve our costs. NewPage announced a 5 percent reduction across the board, about 300 positions. Rumford was at about that same level, with approximately 45 positions."
"In addition to that, there was about a $20 million across the board spending reduction for NewPage. In trying to improve our competitive profile, we do a lot of internal benchmarking with the other seven paper mills. It was through that process that we identified that our property taxes are quite a bit more than even the mills that are bigger than us. So that became an area of interest," he said.
"As part of the bankruptcy process that we went through last year and just came out of recently, the mill went through an evaluation process by an outside auditor. As a result of that audit, the value of the Rumford facility has decreased dramatically. That's why we wanted to have some conversations, basically to give you a heads up that we will be going through the process, similar to what we went through in 2009, with the more recent information that we have," said LeClaire.
Puiia, referring to a correspondance from Berry, said Rumford Paper Co. pays $4.3 million in property taxes. So even with the $1 million reimbursement from the state for Maine's BETR program, the local mill still pays net taxes of $3.4 million, which is a million dollars higher than the next highest tax bill, which is in Escanaba, MI.
He noted, "I want everyone to be made aware that the town did work with the mill's management to adjust their valuation back in 2009 and 10, and that helped drop their property value tax burden from $5.8 million to today's levy of $4.3 million. This represents a reduction to them of over $1.5 million of property taxes from that time.
"I think everyone in this room shares the same concern, and that concern being that our number one employer and taxpayer has the opportunity to remain as an integral part of our area, providing us with better than average paying jobs and benefits, and continue to generate an economy that most rural communities like ours do not enjoy," said Puiia.
"The mill currently pays one-third of all the property taxes here in Rumford. This means that unless cuts were made to the education budget, in order to reduce their tax burden by $2 million, it would mean that our $8 million proposed budget would need to reduced by $6 million. That would leave the town $2 million to operate on," he said.
"It's been said to me, 'Can't the town give the mill a tax break?' They (Board of Selectmen) do not have that authority, by state law," said Puiia.
Selectmen said that is handled by the Board of Assessors through an abatement request. They also cannot cut the proposed town budget for 2013-14 without calling a special town meeting.
Berry indicated that that that information will be submitted to the Rumford assessor's office by the end of April.
Puiia said he met with Berry and LeClaire on Feb. 20 to discuss the mill's tax bill and ways the town could help lower it.
Puiia shared that information with selectmen during a budget workshop seven days later and at the March 7 public hearing.
In a followup letter to Puiia on March 8, Berry said, "We shared with our employees that our strategy involves taking deeper cuts across the board -- to the tune of $33 million-plus. We asked for their help in identifying and overtunring any rock they see as an opportunity to drive costs out. Some of these cuts will be painful, but they are imperative."
"I urge you to use this information when working through your budget this year and keep in mind the 850 remaining mill employees fighting for every nickel and dime to keep this mill running," she said.