May 18, 2024
The city of Bangor, Maine has transferred $14,280,000 in surplus funds from its Unassigned Fund balance in the last 3 years all while raising taxes.

Each year, Bangor’s City Council makes a transfer of money from the city’s Unassigned Fund balance to various reserve funds the Council have established. When the city budgets less than actually needed, it makes appropriations from reserves to cover the unexpected expenses. On the flip side, if more revenues come in through the course of a fiscal year than was budgeted for, those monies end up as unassigned.

The transfer order typically takes place in April.

DateYearUnassigned Transfer AmountOrder
06/08/20152015$1,000,00015-213
04/25/20162016$1,100,00016-170
02/13/20172017$1,600,00017-085
04/23/20182018$1,520,00018-182
04/08/20192019$1,625,00019-148

2020 was a tipping point.

When the COVID-19 pandemic happened in 2020, the city took a cautious approach and didn’t transfer any funds from the unassigned fund into reserves. The following year the city transferred $2,500,000.

04/26/20212021$2,500,00021-169

2021’s transfer wasn’t a surprising amount, as it was making up for no money having been appropriated in 2020. In the Order, it stated: “Due to the financial uncertainty surrounding the pandemic, no funds were transferred to capital reserve fund balances at the end of the prior fiscal year.” This was 100% accurate at the time.

But then something incredible happened in 2022.

04/25/20222022$8,000,00022-169

An eye-opening and record breaking $8,000,000 was transferred. Not only the amount was staggering, but the order for the transfer itself. It was using the exact same justification in 2022 as it did for the transfer in 2021. The Order stated: “Due to the financial uncertainty surrounding the pandemic, no funds were transferred to capital reserve fund balances at the end of the prior fiscal year.

Now wait a minute. The City Council ordered funds transferred to capital reserve fund balances almost a year ago to the day. If you had read 2022’s Order without any context, you’d take this justification at face value. With the context, you can see it’s false. And when you’re using false statements as justification for government business, that’s bad news and it breaks the public’s trust. Even worse, when you see that this is a pattern of deceiving the public:

If only the City, who is blaming the City, had the power to make the City sufficiently budget for the City.

The language evolved over time. 2015 was accurate. But starting with that year they were putting aside over $1 million a year. But the tune never changed until 2021. It went from “not budgeted sufficient funds” to “not part of the annual budget process for nearly a decade.” Interesting word choice, especially when looking at the proposed budget books for Fiscal Years 2023, 2024, and 2025.

The truth is, 2021 & 2022 were financially fantastic years for the city of Bangor’s books. Per the 2021 Annual Report, the city ended up with nearly $10 million more in revenue than it budgeted for. And then in 2022 expenses came in at $4.3 million UNDER budget.

The money keeps piling up…

City Council transferred $1,780,000 from the unassigned balance into reserves in 2023. But then another shocking large amount was transferred just this month: $4,500,000. In the years 2022, 2023, and 2024, the City Council transferred a total of $14,280,000. That’s nearly $5 million MORE than the previous 7 years COMBINED.

04/24/20232023$1,780,00023-130
04/22/20242024$4,500,00024-133

…yet taxes are still rising?

Property values in Bangor have been reassessed and they’ve gone up. To compensate, the city reduced the tax rate. Even with the lowered tax rate, the net change still results in an increase for everyone. No matter how the City attempts to spin it, an increase is still an increase. That’s difficult for taxpayers to swallow while watching Bangor City Council deal with more money than they know what to do with. Taxpayers want to know where all this extra money is coming from and why aren’t they feeling any relief because of it?

It’s not the school’s fault taxes are going up.

City Council, for its part, is trying to paint the School Committee’s budget as the culprit for the tax increase. At a meeting on April 24th, Councilors took turns pointing out the increase in taxes and how much of that increase was because of education. It makes sense since the school budget increased by $3,956,768 this year over last fiscal year. Costs are going up and school budgets are increased across the state of Maine.

But that finger pointing becomes an empty gesture when you realize that the City Council ordered another $4,500,000 to be transferred to reserves before they held a meeting with the School Committee about their budget. Not only that, some of the surplus the city saw in the past few years came into the general budget through intergovernmental revenue aimed at funding schools.

The charter of Bangor, Maine requires the yearly audit to be used… but the City doesn’t have the audit yet.

In order to calculate the unassigned fund balance, the city is supposed to be using the audit of last fiscal year, which it still does not have. Fiscal Year 2023 closed on June 30, 2023. Typically the audit and annual report is presented in December later that same year. For the third year in a row the audit and annual report is late.

Fiscal YearPresentation DateFiscal YearPresentation Date
2000December 26, 20002012December 21, 2012
2001December 26, 20012013December 20, 2013
2002December 26, 20022014January 26, 2015
2003December 31, 20032015December 23, 2015
2004December 30, 20042016December 28, 2016
2005December 14, 20052017January 30, 2018
2006December 18, 20062018December 27, 2018
2007December 21, 20072019December 27, 2019
2008December 18, 20082020December 28, 2020
2009December 21, 20092021March 21, 2022
2010December 10, 20102022March 27, 2023
2011December 22, 20112023(Still Missing as of April)

Even in the deepest part of the COVID pandemic (Late 2020) the report and audit was completed on time. 2021 and 2022 didn’t come out until March of the following year. 2023 still hasn’t been presented as of April 25th.

The city asserts the audits and reports are late because of staffing issues. That might fly for the Annual Report, but for the audit? That’s an outside firm coming in and looking at your books. I also have a hard time reconciling this when no financial ask specific to a staffing plan was put forward to correct this during the proposed budgets for Fiscal Years 2022, 2023, or 2024.

So when might we get the audit an annual report? Maybe at the end of April. Maybe sometime in May. Here’s what the Finance Director had to say when asked about it:

Another official Order, another incorrect statement.

In order 24-133, it states, “The audit for fiscal year ending 2023 indicates that the City has an unassigned fund balance of approximately $19.9 million which represents 16.84% of the prior year expenditures.” But if you watch the exchange in the YouTube video above, you’ll note that the City acknowledges the audit is not complete. The order is justifying itself with documentation that does not exist yet.

The City Council should not be approving orders with blatant misstatements of fact, to put it kindly. And there needs to be some kind of accountability for making sure these orders get it right before they come up for an official and binding vote.

Another example would be order 23-230 from last year, when the order claimed an item was reviewed and discussed at a meeting that never actually took place. The citizens of Bangor put their trust into the City’s government and we deserve better.

It’s not adding up for taxpayers.

3 years of late audits and annual reports.
3 years of record transfers from the Unassigned Fund balance.
Another year of higher tax bills in spite of the surpluses.

When I ran for City Council myself in the fall, I heard from a lot of taxpayers who said they’re already feeling squeezed with last year’s last tax hike. And here we go again with another tax hike coming this year. It’s a bitter pill to swallow that taxpayers have to juggle their finances to work in another increase this year while watching City Council sweep $14,280,000 in excess revenue into rainy day funds over the course of 3 years.

The city of Bangor, and City Council, has a lot of explaining to do. Maybe they’ll do a better job of communicating all of this in the Annual Report for Fiscal Year 2023… whenever it gets completed.