NewPage, Rumford businessmen urge Rumford board to lower paper company's taxes

Terry Karkos/Sun Journal

Rumford Selectmen Chairman Greg Buccina, fourth from the left, responds to a concern raised Wednesday night at a board meeting requested by NewPage officials seeking property tax relief. From left are Rumford treasurer Deborah Laurinaitis, Selectmen Jeremy Volkernick, Jeff Sterling, Buccina, Jolene Lovejoy (behind Buccina), and Brad Adley, and NewPage mill manager Jerry Leclaire, mill fiber supply director and spokesman Tony Lyons, mill controller Kelly Berry, town attorney Jennifer Kreckel and Town Manager Carlo Puiia.

RUMFORD — NewPage officials and local businessmen urged selectmen Wednesday night to reduce the paper mill's taxes.

Terry Karkos/Sun Journal

Rumford's NewPage mill manager Jerry Leclaire responds to a question Wednesday night from Rumford Finance Committee member Ted Hotham while NewPage Fiber Supply and Public Affairs Director Tony Lyons, center, and mill controller Kelly Berry listen.

Terry Karkos/Sun Journal

Rumford Town Manager Carlo Puiia, left, and Selectman Jeremy Volkernick listen to Selectman Jeff Sterling respond to concerns raised by NewPage officials Wednesday night. Mill officials want the board to cut the mill's taxes and the municipal budget for 2013-14.

Terry Karkos/Sun Journal

Rumford Finance Committee member Ted Hotham questions Rumford paper mill officials during Wednesday night's meeting with Rumford selectmen and Town Manager Carlo Puiia.

Terry Karkos/Sun Journal

Matt Kaubris of Rumford, chief executive officer of the Oxford Federal Credit Union in Mexico, tells Rumford selectmen Wednesday night that they need to do whatever they can to help keep the Rumford paper mill from closing.

Terry Karkos/Sun Journal

Rumford resident and former police Chief Tony DeSalle, standing at right, tells Rumford selectmen Wednesday night that they need to start paying attention to the NewPage paper mill's needs to reduce its taxes by significantly reducing the municipal budget.

They also asked the board to reduce spending in the coming year and cut the town budget. At issue is the potential that NewPage will shut down its Rumford Paper Co. subsidiary.

Selectmen cannot cut the proposed town budget for 2013-14 without calling a special town meeting.

They can, however, try to find other ways to help, Town Manager Carlo Puiia and board Chairman Greg Buccina said.

"I think everyone in this room shares the same concern," Puiia said.

"Many of our citizens and many of the mill's employees are either unfamiliar or unaware of the limitations we have that prevent us from simply solving the dilemma we face," Puiia said.

Puiia said NewPage pays $4.3 million in property taxes. That's down $1.55 million from the $5.6 million the mill paid in 2008-09. The mill, which employs 850 people to date, roughly pays a third of all property taxes in Rumford.

"This means that unless there were cuts made to the education budget, in order to reduce their tax burden by $2 million, the $8 million municipal budget would need to be reduced by $6 million," Puiia said.

Puiia said he met with Kelly Berry, mill controller, and Jerry Leclaire, mill manager, 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.

He said that because the Rumford mill pays $2 million more in property taxes than other NewPage mills, it puts them at a disadvantage when profitability and competitiveness in the marketplace could soon determine their survivability.

That was Wednesday afternoon's message from Leclaire, Berry, and Tony Lyons, the mill's Fiber Supply and Public Affairs director.

To reduce costs, Lyons said the mill has directed its employees to help find efficiencies.

"For us to continue to modernize the Rumford mill, we have to have a cost structure that it makes the corporation want to do this and we want it to invest in the mill," Lyons said.

In December, NewPage announced it had completed financial restructuring and emerged from Chapter 11 bankruptcy protection. On Feb. 19, the Ohio-based corporation said it would reduce its operating costs and workforce due to a decline in demand for its paper.

For the Rumford mill, that meant laying off 45 hourly positions and cutting costs by $2 million.

"I would think the sobering aspect of this whole thing is that on Dec. 27 the news comes out that you're out of bankruptcy and everything seems really rosy and not even three months later, here we are," Sterling said.

Lyons said "it was a sobering few weeks for us, end of January into early February," which is why they approached Puiia on Feb. 20 to alert him.

Selectmen Jeremy Volkernick and Buccina, both NewPage employees, knew of the mill's situation and tried to reduce the budget. It's something Buccina said must happen and continue to happen if Rumford is to survive.

"The town will be here, hopefully for the next century, but we need to make some adjustments" to match those of NewPage, Buccina said.

Matt Kaubris, chief executive officer of the Oxford Federal Credit Union in Mexico, urged the board to do whatever it can to help the mill out through a tax break, tax increment financing, reducing the budget or doing a townwide revaluation.

Kaubris said if the mill shut down for good, it would have a tsunami effect on area businesses.

"What happens at the mill happens to all of us," he said. "This is serious....We've got to do whatever we can to help them."

tkarkos@sunjournal.com

What do you think of this story?

Login to post comments

In order to make comments, you must create a subscription.

In order to comment on SunJournal.com, you must hold a valid subscription allowing access to this website. You must use your real name and include the town in which you live in your SunJournal.com profile. To subscribe or link your existing subscription click here.

Login or create an account here.

Our policy prohibits comments that are:

  • Defamatory, abusive, obscene, racist, or otherwise hateful
  • Excessively foul and/or vulgar
  • Inappropriately sexual
  • Baseless personal attacks or otherwise threatening
  • Contain illegal material, or material that infringes on the rights of others
  • Commercial postings attempting to sell a product/item
If you violate this policy, your comment will be removed and your account may be banned from posting comments.

Advertisement

Comments

Tony Capola's picture

This is serious

What's it going to take to get the citizens of Rumford to understand just how serious this problem really is without even considering how worse it could get?

The department heads need to be duty-bound to cut their budget requests. If not; someone (?) is going to have to cut them without their willing participation.

There’s little doubt that continuing to fund the needs of this town will require sacrifice for EVERYONE. We are no longer a town with 12,000 citizens and a healthy employment picture.

For some reason we are still spending like this is 1968.

Eric  LeBlanc's picture

The townspeople should have

The townspeople should have approved the casino when they had the chance but they were too scared of change. Of course none of the mill employees cared while they made dump runs in their $40,000 pickup trucks.Hopefully that foul smelling cancer causing pollution factory shuts down for good. The sooner the better.

THOMAS FALLON JR.'s picture

The contingency plan that never was...

Rumford's situation with the paper mill right now is something that could have been headed off if we had established a contingency plan that was discussed ten years ago by selectmen, appeared in the LTE's column, and a citizens' tax committee tried to deal with before it was sidetracked by politics.

NOW, here we are at the last minute with the paper mill asking the town's selectmen to help bail it out.

I do not understand why we were not prepared when everyone has known for some time this could happen.

Phil Blampied's picture

Right

The idea of a contingency plan didn't just get lost in some vague political process. About two years ago, the current town manager, Carlo Puiia, was approached by several people with a direct request to begin contingency planning. He specifically and categorically refused to do so. As this catastrophe unfolds, it needs to be clear where some of the responsibility lies.

The responsibility also lies with the 3 members of the selectboard who never saw a budget increase they didn't like, and who have publicly stated that taxes are low in Rumford and the taxpayers can easily afford to pay more. This majority has insured that the board has failed to make any substantial cuts in the various proposed budgets. The minority, Buccina and Volkernick, have at least made an effort to restrain the growing budgets and hats off to them.

The municipal budget can easily be trimmed by a substantial amount, but the political process isn't working, due to the presence of leaders such as the current selectboard and town manager who seem to lack the insight and basic managerial skill needed to reduce the budget and still have the town government functioning at a reasonable level. It can be done, but not by this crowd.

Agree To Some degree

Surprised you gave cudos to two of the selectboard. Remember their jobs are in jeopardy. Did they attempt to make cuts in previous years? I don't think so!

Jack Kaubris's picture

Do we give or loan the $$ to Newpage

I agree with most of what has been reported and commented on here about the importance of doing what we can as a town to keep the mill open and producing profits for the owners. I am concerned with a couple of things though...and so, the following questions. If we (town of Rumford) can,somehow, 'give' NewPage $2 million this year...what happens next year if this company is still struggling? Do they ask for another bailout? What else could we cut? How many of the 850 employees live in Rumford? Are the non-resident employees (Mexico/Dixfield, etc) going to ask their municipalities for a contribution? To save $2 million per year...the 850 employees could take a $2350 pay cut and ...problem solved - that needs to be a part of the conversation. That would be a tough choice, I know. My concern here is that whether the mill stays open or closes...the fat cats on Wall St are going to get fatter - either way. Are the employees and surrounding towns willing to loan/give NewPage a share of this burden? The reason I would prefer to loan ( and I have absolutely no idea if this is legally possible...Jennifer?) NewPage the money rather than just giving it to them...is this..when/if the company starts reaping the expected profits will they share those profits with the town? A loan would be a way to recoup our losses. Just some wild thoughts to throw out there. I do agree that we, as a municipality need to cut back. But, we could eliminate the police and fire depts and still not be able to achieve what NewPage is asking for. I would like to see a sharing of the burden between all involved. This request, coupled with the new revelations of NewPage's shenanigans with the Electric 'rebates' they received and the consequent $3 or $10 million penalty, seems to be a convenient way to balance their 'errors'. The reality remains that if the mill closes it will be devastating for all local communities, employees and non-employees. The solution needs to involve all of these parties. Just a couple of thoughts.

Gary Vaughn's picture

Major corporations only care

Major corporations only care about profits. The more they bleed out of the host town, the bigger the profit. In Rumford's case, New Page may believe they have the town over a barrel. It is high time to recognize the work people perform and pay them accordingly. I saw no mention of the salaries the mill pays. Because out of town people work at the mill, they may not care what Rumford has to do to retain an operating paper facility. However this is a major problem that Rumford should deal with now as who knows how many more times New Page will be back asking for favors with the closing as leverage.

Phil Blampied's picture

The usual anti-corporate analysis doesn't really fit

Yours is a familiar point of view regarding corporate behavior, but it doesn't necessarily fit here. New Page has never stepped into town government affairs. Previous mill owners might have done so decades ago, but this is new behavior for New Page, and the fact that they've done so should be regarded very seriously. They've deviated from a hands-off policy, and this is not a corporate management that deviates easily from established practice. Something is very wrong here and Rumford leaders and voters should not ignore this glaring warning sign by using the excuse that New Page cares only about profits. It is very foolish for the town leaders to increase spending at a time like this.

Gary Vaughn's picture

the usual

I whole-heartedly agree that most towns(including Rumford)need to do a better job with regard to municipal budgets. That being said it is not hard to see who holds all the cards in the mill situation. New Page has not much to lose if they don't get what they want, The taxpayers of Rumford have more to lose. I believe its less of how local management handles it affairs and maybe how well high up management think they have all the leverage. Weigh out the losses and see who loses most.

Phil Blampied's picture

Understanding motivations ...

My guess is that New Page isn't looking to Rumford to fix its balance sheet with a massive tax cut, which wouldn't be possible, but just to pitch in a bit. If Rumford did a little, it would be a point to make with the union to do a little, and a point to make to higher ups to do a little. That might buy some time for the mill.

However, the town manager and selectboard are framing the question as a request for an impossibly massive tax cut, so they can avoid doing anything at all. And if they do nothing at all, that gives New Page the public relations edge to soften its image when it does close - hey, we asked them to help and warned them about this and they did nothing.

The mill will be gone, if not this year, then in a year soon to come. Rumford needs to get its budget under control not only perhaps to extend the life of the mill, but also not to be caught in a desperate financial bind once the mill does close.

Bets are that the apparently well-off current town manager and his mostly well-off selectboard will have comfortably escaped to condos in Florida when Rumford is a burned out war zone thanks to their mismanagement, leaving the rest of us behind to live behind triple locks on the doors in our unsellable houses.

Jack Kaubris's picture

..or excusing the motivations

You make some good points, Phil. But to do so, you also take some cheap shots. Slamming Carlo and a majority of the board is also an easy way out. The truth is that since moving back to this area 20 yrs ago, every town manager and selectboard have only made incremental changes to the budget ( despite one recent selectman repeatedly patting himself on the back!), and believe me, I have been hearing for these 20 yrs that the mill is going to close. It is the responsibility of the townspeople ( is that two words?) to vote the budgets in or out. So direct your frustration toward your neighbors. You say that 'the municipal budget can be easily trimmed by a substantial amount.', but fail to say what you mean by a substantial amount and, more importantly, where you would 'easily trim' it. The devil is in the details.
' The usual anti-corporate analysis' actually does fit. NewPage doesn't need an excuse such as local tax rates to close the mill. It can and will find any excuse it wants to when the time comes to close the mill. It will do so because of profit or lack of profit. I don't believe that this company's profit margin hinges on our local mills' tax rate. Of course, they won't share their balance sheets with me, but it is a reasonable guess. NewPage cares about profit above all else. That's OK. We call it capitalism. That's what companies do.
Finally, I agree with you that we need to trim our budget in these economic times. But, I really don't wish to live in a town of our size without a police force or fire department. I do like to have my road plowed in the winter, love our local library, appreciate trash pickup. Call me a fat cat with a condo in Florida if you wish. Again, the devil is in the details.
ps. Is it too late to call the wind power companies to tell them we'd like to reconsider?

Phil Blampied's picture

Shots not so cheap

By the way, I may be taking shots, but so far I am about $500 out of pocket over what I would have paid in taxes and fees thanks to the bad decisions of the town manager and the selectboard, so you can't exactly call them cheap.

Jack Kaubris's picture

Fair enough

Ha. +1 Phil.

Phil Blampied's picture

Public relations does count

There will be legal and political ramifications when New Page closes the mill, so having a strong public relations story is important, and being able to point to high taxes could be helpful when the mill needs to work with the powers that be to shut down. If the town made an effort to trim the budget, it might lessen that public relations advantage and perhaps add a small incentive for the New Page management to keep the mill going a little longer.

You seem to be asking where the cuts can be made. This is where the budget process runs into trouble, as committee members try to suggest economizing moves and the department heads always have a reason as to why even buying fewer pencils will cause the town to collapse. The fact is that cutting back all the departments by a third would bring Rumford into line with the services provided in many other towns of its size. There are many specifics as to how it can be done without throwing the town into chaos. But a volunteer committee member can't argue effectively against the professional department heads who live every day with the details and can easily out-argue the volunteers if they want to. This is where the town manager should be reining in the department heads and tasking them with better budgeting. The department heads seem to feel their job is to get as much money as politically possible. They don't seem to feel that controlling costs and keeping taxes under control are part of their responsibility. The town manager needs to use both carrots and sticks to be sure the department heads share in the job of keeping the budget under control. He has failed to do that. Sorry if that sounds like a cheap shot, but I don't care what some former town manager did twenty years ago, the bus is going over a cliff right now and we need to be concerned about who's behind the wheel now, not what happened back when the road was clear and the steering was easy.

Jack Kaubris's picture

According to the mill..

this bus has been going over the cliff for 20 yrs now. Perhaps if the mill didn't get caught with their hands in the Electric 'rebate' cookie jar, at the same time as this request for tax relief comes out, I could be more sympathetic to their plight. But, let's not blame the driver when the company is trying to take the wheels off the bus. I do not agree with you that public relations matters one jot on whether the Wall St crowd decides to keep the mill open or closes. The legal and political ramifications will not be swayed by a good 'story'. These people who own the mill have very few ties to this town/state. They will do what they need to do to maximize profits. If it means squeezing it out of the town or their employees, that is what they will do. I am asking where you will easily trim the budget...and you propose a 1/3 reduction in all depts. Fair enough. But, again, the devil is in the details. Which shift for police/fire don't you cover? Which roads do you propose to go unplowed? Going to reduce the library hours again? I am not saying that we shouldn't do that, but that there are real consequences to what you propose.

Phil Blampied's picture

Could turn into a novel before we're through ....

These comments are approaching book length. I'll be brief: profits are no longer the issue here. The mill hasn't been profitable for some time. The question is, how long will creditors and investors carry the facility in hopes of a rebound? Many factors go into that decision, including the costs and logistical difficulties of closing, but also whether other parties, such as the town and the union, are at least cooperating in the effort.

Where could you cut? Well, I actually pitch in to try to help the town and on the library issue, I've been a member of the Friends of the Library and have urged them to start an endowment which could help wean the library off complete dependence on taxes. There are people who don't pay taxes in Rumford who would contribute, a source of funds which is under-tapped. Police and fire: there are patterns to call volume and it would be reasonably safe, I expect, to reduce police and fire coverage in the middle of a quiet night in early November, based on historical patterns, and less safe to reduce police and fire coverage over the Fourth of July weekend. There is the hysteric argument of, well, what if that quiet night in November is just the night a mass murderer decides to shoot up Congress Street? Well, sure. Then don't drive your car today, because what if that same mass murderer steals a Mack truck and runs into you? There is risk, but there are professional ways to minimize risk based on historical patterns. That's called management. If we didn't accept risk, cars would cost a million dollars. If you are worried that someone, somewhere will commit a horrible crime in Rumford and we can't accept that risk, then we should all pay a million dollars in taxes and hire a thousand new police.

Just two examples of the many that could be cited.

Jack Kaubris's picture

Time to put this novel to bed

We'll just have to disagree on the profit angle - I maintain that it is the overriding factor in this latest rebate request....and will drive the debate on whether the mill closes or stays open for as long as we have a mill.
As far as hysteric examples...I find it better in the long run to be honest with voters (It is what's missing in most of politics). Instead of telling the voters of Rumford that you have an 'easy fix', it would be more honest to tell us(voters) that the fix will actually be painful, and these are the consequences...but here are the benefits...lower taxes, etc. Your example of giving the police a quiet night off in November doesn't quite match what you are proposing with your 1/3 budget cut. What you are proposing is that the police take Sept., Oct., Nov. and Dec. off. Every morning, afternoon and night. That's not just a quiet night here and there is it? You are proposing that we plow 2 out of 3 storms...opening the library 4 days a week instead of 6. Those would be more honest examples to save 1/3 on each depts' budget. Put that to voters ....maybe that is the solution. But easy..I don't think so.
I applaud your work on the library and the Brick Park renovations. Great work. I'll give you the last word on our novel.

THOMAS FALLON JR.'s picture

Good...

Very good points, Jack.

Ed McCaffrey's picture

I hate to say "I told you so"

But...

Thanks Ed

Years ago when I was on the Finance Committee and then became a Selectboard member I pushed for cuts and helped get the secret ballot so people wouldn't be afraid to vote "NO' on town budgets and feel intimidated. But people kept passing town budgets year in and year out anyway. Just wouldn't listen to reason. Rumford should not be paying more than 17 mils. For a town our size we live way beyond our means. Look where it has got us now. There are excesses in all Departments and way to much is given out in Initiated Articles. We the people have to seriously Vote "NO" across the board at the polss or there should be a Special Town Meeting and pare back all spending to a level where 17 mils would cover the running of the Town of Rumford. Time has run out! Please listen to me now! You didn't in the past and look where we are now. Voters have to do the right thing now. And remeber voters if you vote absenttee ballot our School budget will not be in the packet. Please go back and vote again. That will be easy also. "NO".

Ed McCaffrey's picture

Frank

I'm no longer a Rumford resident, having moved across the river, but this will affect Mexico just as much if the mill goes away. You know that I was very vocal in telling the town powers that they were living on borrowed time and like you, I was ignored. I was called chicken little and worse.
The chickens have come home to roost and it may well be too late to save the town now. For too long they've been living a champagne life on a beer budget and I don't believe that anyone on the board knows how to make the important decisions necessary to stop the bleeding. Lots of thoughts and exploratory committees but nothing that addresses the real issue.The time to merge services with neighboring towns has long gone by, and even if it hadn't no town in it's right mind would want to take on the burden of Rumford's perpetual mismanagement. They will have to fix this on their own and it will not be pretty.

Advertisement

Stay informed — Get the news delivered for free in your inbox.

I'm interested in ...