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Op-Ed: Fear of L-A merger comes from long- and short-term costs

By Robert Reed, Lewiston

Maura Murphy is right—those of us who are opposed to the merger live in fear. (Op-Ed: “Opposition to L-A merger seems to come from fear,” TCT, August 24, 2017).

But perhaps she should ask what our fears are, instead of assuming so much.

Eight years ago we went through a similar attempt while I served on Lewiston City Council, and it was by the efforts of a small group that we debunked the numbers provided and were able to stop what would have been a disaster. Today I find myself in a similar place, again having to analyze the numbers provided and place them in context and defend my actions. So what do I fear?

I fear significant tax increases, both long term and short term, should a merger pass. While the Joint Charter Commission report provided lots of hypotheticals of what the city could look like in terms of savings, they glossed over the costs associated with a merger, simply listing them without assigning any financial weight to them. As chairperson of the City of Lewiston Finance Committee, I see these costs often and was able to ask those who do the actual work what the costs might be for some of the expenses. Just taking the $2.4 million the JCC indicates could be saved and reducing it by the leveling-up of management salaries totaling $1.6 million leaves two cities combined only saving $800,000 a year. But we must calculate the other costs.

Short-term costs include legal expenses, moving costs, new signage and letterhead, as well as severance to employees who are cut out. For Lewiston, a one-time re-assessment of property likely to cost $750,000, just to equalize with Auburn and only required if a merger passes. Reassessments are known to place more share of taxes on residential properties, not commercial. Then add in consultants, task force for transition and lots of other items, and the cost to simply make the merge occur is likely to be $6 million, meaning over $5 million in one-time costs to the taxpayers.

Long term: If management personnel are promised higher wages, as indicated in the report, won’t staff expect the same? When we equalize labor contracts, will we see one side give up anything or will we see them expect more? Just one dollar per hour per employee is an additional $1.6 million annually not otherwise incurred.

The JCC also recommends bringing back LAEGC; in fact, it goes so far as to call it a city board when in reality it was a private entity—that’s another $350,000 annually. How about new school costs, given the JCC recommends expanding special ed when funding lacks for two years in every cycle? Transportation issues, coordination and equalizing curriculum and teacher contracts? Roughly $2.7 million a year in added costs against the $800,00 in savings.

It’s a real fear of bad numbers too. The JCC simply asked the task groups what would it be like in an ideal world, then modeled their predictions around that. We know Princeton saw savings for less than three years and today has already hired people to more than offset the cuts made. Government loves to grow, and mergers are a time when best-case outcomes are promised—until the actual work needs to be done. Then we need more bodies, not less.

It’s also a fear because the JCC used imaginary numbers to value homes in our community and overinflated the values by 45% over what actually occurs. They have admitted it quietly, but the $120 that a Lewiston taxpayer would save is more likely already cut to $80, and that’s before any of the costs I mention. There is no groundswell of support to merge; there is no proof that our economy will change; no one can say it will stop our children from leaving; and there is no guarantee we will have more power in Augusta. Those are simply wish lists that give you false hope.

My job on the finance committee is to look out for the taxpayers of this community. In my opinion, based on what I can reasonably analyze, this merger will be more expensive and not provide any of what has been promised. It is simply not feasible. That’s likely the reason there is such a ground swell of opposition to it.

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