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A "Good Idea Book" for Maine municipalities.

In Maine, what may be "innovations" to some are thought of by others as nothing more than good old Yankee ingenuity. By any name, the process of innovation is alive and well as local government officials in Maine seek solutions to the problems besetting them. Exhibit A: The Good Idea Book: A Directory of Municipal Innovations.

Prepared as a resource for the Maine Municipal Association's 1991 convention, The Good Idea Book is based on responses to the association's letter to city and town officials requesting that they share their innovations with their colleagues from other parts of the state. Submissions from 45 communities are included in the directory. The good ideas were applied to areas of finance, public works, economic development and the total scope of government administration: they ranged from developing a computer program to keep track of the census in Veazie to the construction of a "Take It Or Leave It" building at the recycling center in Deer Isle.

While some of this good old Yankee ingenuity may be standard operating procedure to others, for the innovator and the community, these ideas represent a more efficient way of conducting the town's business, an increase in productivity, a reduction in costs, improved public relations, or, perhaps, all of the above.

Small governments in other parts of the nation may find some cost-cutting measures and some new perspectives on government operations among the selections from The Good Idea Book presented below.

Tax Bill Tells All. They tell it like it is in Bar Harbor (population--4,443), where the tax bill not only notes the positive impact of state subsidies on the tax rate, as required by state law, but also notes how much higher property taxes are because of state mandates. "If it were not for state subsidies, the tax bill would be 5 percent higher; if it were not for the mandates it would be 12 percent lower," reads the bill. The town included 28 "mandated" items to come up with its figures. They range from the salary of the superintendent of schools to the cost of property tax revaluations.

Raffle Improves Response. Given the fact that residents of Raymond (population--3,311) had a poor history of responding to surveys or attending public meetings, the town's comprehensive planning committee created an incentive to answer their 39-question, seven-page survey that they were mailing to all residents. In lieu of an addressed stamped envelope for returning the questionnaire, the committee offered a $250 prize (what the stamps would have cost). Along with the questionnaire, the committee included two numbered tickets: residents were asked to keep one and return the other with the completed questionnaire. Seven hundred and twenty-nine out of 2,100 residents returned their questionnaires. That's a 35 percent response rate, compared to the average 20 percent response rate for mail surveys.

Formula-based Budgeting. Frustrated by the inadequacies of the traditional budget process, officials in Windham (population --13,020) adopted what is known as "Expenditure Control Budgeting" (ECB). Under the system a joint finance committee consisting of the town council and the school finance committee determine a formula for setting a property tax target for the year. The target is based on the past year's property tax level adjusted by the regional consumer price index plus changes in school enrollment and state aid to education. Once the target is set, for the municipal side of the budget, the council determines the distribution of revenues among departments. Once a department's allocation is determined, the department is allowed to retain 100 percent of any cost savings and 75 percent of any new non-property tax revenues it institutes. This encourages finding new sources of funding. Although ECB has only been in place for a few months in Windham, positive results already are being experienced. For the first time, both the council and school board finance committee are meeting on a regular basis to set town priorities and cooperatively solve mutual problems.

Speeding Up the Cash Flow I. Taxes were coming in at a slower rate than usual in Berwick (population--6,000). The town had recently switched its fiscal year and residents were being hit with a tax bill six months earlier than usual, albeit, only half the regular amount. Following a discussion with department heads, it was agreed that the town would offer its 24 employees a property tax payroll deduction. There was no obligation on the part of the employee and no pressure from management. The offer was presented merely as another way of paying taxes. About half of the employees responded to the offer; their deductions ranged from $25 to $50 a week. The idea was so popular, that two town employees who lived in neighboring towns asked that their taxes be deducted from their paycheck regularly and sent to their town office. Berwick agreed to do so. Currently, a private employer in town is reported to be considering joining the project. The town also has recently created a "Tax Club" which they describe as similar to a Christmas Club; to date 30 residents are members, making monthly payments on their taxes.

Speeding Up the Cash Flow Il. An $848,000 deficit. A revaluation that wasn't done on time so the tax bills were mailed out 60 days later than usual. Put them all together and one has a cash flow problem. To solve it, the Town of Old Orchard Beach (population--7,789) decided to advance the collection of the second half of its tax bills by two months from February to December. Town staff did so by bulk-mailing 5,000 red and white 4 x 6-inch postcards decorated with a dove carrying a candy cane and the words "Seasons Greetings." It read in part as follows: "The Town Council, Manager and Staff extend thanks to you for your participation in the financial recovery plan for the town ... If you pay any amount full or partial toward the second half of your tax bill by December 31, 1990, you will be able to take the deduction on your income taxes for the current year. You will be helping the town recover from the financial situation of the past years and you will be helping yourself. WARM WISHES FOR THE HOLIDAYS. THE TOWN OF OLD ORCHARD BEACH." As a result of the mailing, the town was able to collect about $640,000 of the $6 million due in February. The cost of the bulk mailing which came to about $2,000 was easily covered by the $6,000 in interest the town earned on the early payments. Now, out of the red, the town plans to continue the practice because it is a win-win situation for both the taxpayer and the town, say officials.

Deferring Debt Payments. Westbrook (population--16,121) was faced with high debt service payments for the next three years and was in the process of incurring $11 million in new debt. There was concern over how the city could absorb the additional debt payments in future budgets. In response to the foreseeable problem, the city structured its new debt payment so that a portion of the principle payments would be deferred for three years. At that point, several existing bond issues would be retired and the city's debt service would be declining. By using this method, the city avoided large spikes in debt service payments which would have occurred under a conventionally structured debt service plan. Instead, the city has gradually decreasing debt service payments over the next few years. Before proceeding with the new debt service plan, the city obtained the approval of the bond rating agencies.

Employee Safety Program. Lost-time injuries were increasing; workers' compensation costs were increasing. In response, the City of Old Town (population--8,317) began a safety program that provided incentives for individual employees as well as whole departments to become more conscious of workplace safety. Individual employees are rewarded for working a set period of time (month and year) without a lost-time injury. Each month carries its own reward, ranging from a day off with pay to a gift certificate at a local shop. The purpose of the department incentive program is to have employees work together and look out for each other. Departments which do not have a lost-time injury for a year receive a plaque at an annual Safety Christmas party. Departments also receive cash prizes for working without lost-time injuries. Total cost of the successful program is about $5,000 a year. The program has worked so well that the city reports that during one 367-day period, none of its 85 full-time employees suffered any lost time due to work-related injuries.

Diversifying the Tax Base. The loss of the second and fourth largest taxpayers in the city due to closings posed a serious threat to the city's economic base. One of the businesses was located within the largest, single-roof industrial building in the state. In order to attract new business to the building, the city worked closely with commercial realtors who were marketing the vacated facility. They met with prospective tenants to determine conditions which would make it attractive for their firms to locate in Westbrook. One company was issued an $85,000 loan from the city's revolving loan fund. This was combined with state financing through the Finance Authority of Maine. For another tenant, the city agreed to upgrade the appearance of the industrial park. This was done through city appropriations combined with other funding sources including money provided by a developer who owned lots within the same subdivision seeking to improve the marketability of his lots. By taking an active role in working with the private sector, the city was able to attract three new businesses to the vacant building and stabilize its tax base.

Contracting for Police Services. When the arrangement with Winter Harbor's (population--1,157) single on-call police officer stopped working, the town literally joined "forces" with neighboring Gouldsboro by contracting for police services. Under the terms of the contract, Winter Harbor contributes a fully equipped cruiser; Gouldsboro (population--1,721) maintains it. In return, Gouldsboro offers the services of its full-time police officer and three part-time officers, plus its own two cruisers. Winter Harbor pays Gouldsboro approximately $25,000. Both towns have better equipment and round-the-clock police availability. The two are now contemplating the development of a joint police force as opposed to present contracted services.

Solid Waste User Fee. Faced with spiraling solid waste disposal costs, Richmond (population--3,072) instituted a solid waste user fee and began a recycling program. Historically, the town paid the tipping fees for all solid waste. Fees for 1990-91 were $124,000, a full 10 percent of the municipal budget. Believing the best way to reduce solid waste was through economic incentives, the town devised the following plan: trash picked up curbside would cost the user a per bag fee. Recyclables would be picked up curbside for free. The town also encouraged the private haulers to participate; as a result they competed to charge a fair but competitive rate for solid waste, the average being $2 for a 30-gallon trash bag weighing no more than 25 pounds. The result: the town will pay no tipping fees in 1991-92 and the solid waste stream dropped from an average of 138 tons in 1990-91 to 87 tons in the first month of the program.

Forming a Solid Waste Association. Faced with imminent closure of its landfill, Dexter (population--4,419) determined that although it could "go it alone," a regional approach to its solution would be more appropriate not only for Dexter but for several surrounding towns. The "economy of scales" would provide at least a small savings to it and allow many of the smaller towns to solve their problems at a fraction of what their individual capital costs would have been. For a dozen interested towns, five participants emerged to form the Mid Maine Solid Waste Association (MMSWA); they signed an interlocal agreement in the fall of 1987. Over the next three years, the MMSWA received approval as a tax-free entity and received a $1.2 million FMHA loan to build a transfer station; it also received a $125,250 grant from the Maine Waste Management Authority (MWMA) to construct a regional recycling center. By pooling the populations of the five towns, Dexter was able to be classified in the low- to moderate-income range and receive the lowest interest rate possible (5 percent); by itself, Dexter would have paid 7.5 percent to 9 percent. The MWMA grant was possible only because the recycling center was to be a regional facility.

Take It or Leave It Building. Like other towns in Maine, Deer Isle (population--was 1,829) faced with reducing the amount of material going into its landfill. In addition to signing a contract with a private company for recycling its paper, cardboard, glass, tin cans, plastic and newspaper, it went one step further in getting rid of a lot of other stuff. For $6,000 in materials and labor, it built a two-car garage-sized building and dubbed it the "Take It or Leave It Building." Things that are good "for some kind of use" are dropped off by some and picked up by others: everything from bicycles, television sets, pots, pans and dishes. The building, complete with shelves for the small stuff, also houses the dump attendant's office.
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Publication:Government Finance Review
Date:Jun 1, 1992
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