POLAND – Two Democratic lawmakers are wrapped in a scandal surrounding the town of Poland’s Tax Increment Finance (TIF) districts, some incomplete accounting work, and a bill some believe is too high.
The over-billing conflict became public knowledge following a July 15 Sun Journal story that quoted several Poland officials who were angry with Community Dynamic Corp.’s decision to bill the town $12,725 for services originally estimated to cost $6,900.
“I can understand 10 or maybe 20 percent over, but not this,” Selectman Walter Gallagher said of the bill, which was about 80 percent over estimate. “I’m furious. Taxpayers out there are going to be furious.”
Community Dynamic Corps. is a government services consulting firm run by Sen. John Cleveland (D-Androscoggin). Although the firm once had a larger staff, Rep. Nathan Libby (D-Lewiston), who is also a Lewiston City Councilor, is Cleveland’s only current employee.
The Sun Journal story did not disclose that Cleveland is a Democrat or a lawmaker. Nor did it disclose that a second Democratic lawmaker, Libby, was Cleveland’s only employee. A second Sun Journal story on the issue also did not disclose that Cleveland is a Democratic lawmaker.
Both Cleveland and Libby are up for reelection this fall, but now the pair of Democrats have found themselves in a pickle, as Poland’s board of selectmen demands to know why a project they were hired for came in several months after deadline and several thousand dollars over budget.
Bradley Plante, Poland’s current Town Manager, said he was not on the job when Poland’s selectman board inked the agreement with Cleveland, but that he was familiar with the details of the contract.
Plante said Cleveland was contracted in order to help the town with accounting work related to two TIF districts.
TIFs are a locally controlled economic development tool that allow municipalities to dedicate a portion of their property tax revenues to specific projects, such as infrastructure construction.
“There are two TIFs associated with the Poland springs property,” said Plante. “Somewhere along the line [the town of Poland] was commingling the accounting of the funds. In other words, they were lumping TIF 1 and TIF 2 together. And so what happened was, the state directed the town to split TIF 1 and TIF 2 and account for the funds separately.”
“It was an involved task, so they hired Mr. Cleveland,” Plante said. “I’ve talked with staff members and the recollection was that [Cleveland] estimated seven grand and it came in at just under 13 [grand],” he said. “And he apparently did a lot more work than he was anticipating, apparently.”
Cleveland’s troubled interaction with the town goes back farther than the most recent over-billing kerfuffle, and some believe he may have created the comingling problem which necessitated the recent contract work.
Cleveland has worked with Poland on economic development as an independent contractor for at least 5 years, making roughly $50,000 per year in fees, said Joe Cimino, a Poland business owner and developer who has previously served as a selectman.
“He somehow convinced the selectman that he was going to be required by the state to separate the TIFs,” said Cimino. “But he’s the one who commingled them in the first place.”
“We’ve already paid him,” said Cimino. “Now we’re paying him again.”
The Poland board of selectman met on July 29 for a work session and to discuss Cleveland’s bill. Cleveland attended that meeting, as did Cimino.
Cimino said Cleveland defended his work, stating that he “did what he was supposed to do.” According to Cimino, Cleveland declined to elaborate on his work.
Neither Cleveland nor Libby responded to requests for comment.
Zakk Maher, the former chairman of Poland’s Economic Development Committee, also said the problems with Cleveland’s work go back further than the recent over-billing flap.
He said Community Development Corp. initially won a contract from Poland, but that Cleveland has worked for the town since 2008 without any form of written contract. “During that time his fees nearly doubled,” said Maher.
When the committee asked Cleveland for a contract, they ultimately rejected his offer in favor of a different firm. But shortly after, the town encountered the difficulties with its TIFs. These difficulties also coincided with the departure of Poland’s last town manager.
“Right after this, it was brought to us that the TIF financing, which [Cleveland] was paid to oversee as part of the original contract, was not done to the standards required of the state,” said Maher. “He was essentially the only one qualified, as he puts it, to handle the TIF,” he said.
Like Cimino, Maher is wondering why Cleveland is being paid to fix a problem he had a hand in creating.
“When you hire someone to manage accounts, you’re under the assumption that it will be done correctly and up to the state’s standards,” said Maher.
Cleveland told the town that staff changes at the state’s Department of Economic Development and Community Development prompted the need to fix the TIF accounts. But that’s a suggestion Maher refutes.
“We were given the excuse that new staff came into DECD who wanted it done a different way,” he said. “The staff didn’t change. Just the scrutiny of stuff Poland was submitting.”
DECD could not immediately confirm whether the state directed Poland to separate its TIFs.
Maher also said the town has had trouble getting documents — such as itemized receipts — from Cleveland.
“We weren’t getting a lot of work done,” he said. “We started asking for itemized bills for some of these programs,” he said. “We’ve never once seen an itemized bill.”
Despite Poland officials’ requests, Cleveland did not produce any itemized receipts for his work at the July 29 work session.
Cleveland and Libby’s work was supposed to be due in February, according to a copy of the contract obtained by The Maine Wire via a Freedom of Access Act request.
With regard to compensation, the contract states: “John Cleveland and his associate Nathan Libby will be assigned to this project. It is difficult to know with certainty how much time this assignment will take until CDC has had an opportunity to more fully review the details of te accounting records. CDC will undertake this assignment on an hourly basis and we will make every effort to minimize the costs to the town.”
According to the contract, Cleveland’s hourly rate is $75.00/hour and Libby’s is $50.00/hour. “Out of pocket expenses from Auburn, ME will be billed at 55 cents per mile,” the contract states.
At Poland’s regular selectman board meeting on Aug. 5 the subject of Cleveland’s work also came up for discussion, and the board learned that it would have to pay the town auditor, Ron Smith, an additional sum to inspect and complete Cleveland’s work.
“Where we are is that John Cleveland has basically delivered his final documents, but the town auditor, which is Ron Smith… Smith’s crew is still working on getting that all verified,” said Plante. “He said there were some areas where they would be changes.”
“There’s going to be some extra expense there as well,” he said.
Copy of town of Poland’s contract with CDC: