Pittsfield is going to use the money — nearly $2 million — to stabilize the tax rate and attack some projects that have gone by the wayside.

The Kennebec Water District is putting its $1.4 million share back into retirement counts.

In Hallowell, City Manager Michael Starn said the $168,000 the city received was put into this year’s budget as one-time revenue to keep the property tax stable.

Across the state — including 11 central Maine cities, towns, public utilities and school districts — excess Maine Public Employees Retirement System money is being refunded in amounts big and small. The system recently disbursed more than $40.5 million from surplus retirement funding employers put into the system when it was consolidated in the 1990s to 96 recipients across the state.

In Pittsfield, the payment of more than $1.9 million is a “miracle,” Town Manager Kathryn Ruth said.

Ruth said she was surprised that the small surplus it brought into the system about 20 years ago could balloon so much. The payment is equal to about three-quarters of the town’s $2.8 million annual operating budget.

“The town would have never been able to invest the money like that or get those rates,” Ruth said. “We look at it like a miracle.”

Payouts for central Maine recipients range from Pittsfield’s $1,946,934 to School Administrative District 54’s $1,197. (See attached box for central Maine amounts).

The money comes from surplus retirement money some employers brought into the public system when the Legislature consolidated it in 1993, said John Milazzo, general counsel and chief deputy executive director of Maine PERS.

To create a zero balance on the accounts, Maine PERS took the excess money and invested it. The money wasn’t used to pay pensions or retirement benefits.

“It is separate money that has been held in trust and invested prudently,” Milazzo said.

The public offices could have taken the money back at any time, but a change last year in reporting requirements from the Governmental Accounting Standards Board pushed Maine PERS to return the money.

Under new accounting standards, the Maine PERS would have to display each individual account on its balance sheet, a requirement it didn’t have before.

“It’s not like we never knew what each employer had, but we never had to display them in such detail,” Milazzo said.

In Pittsfield, the town’s finance committee is coming up with a plan to use the payment. About $146,000 already has been put aside to pay the employer match for retirement contributions, but that account will last only a few years, said Ruth, the town manager.

The town’s intent is to use the money to stabilize the tax rate and to help pay for projects it hasn’t been able to afford. It hopes to invest the money in a way so it can also get access to it to pay for various projects, Ruth said. Organizations and town departments already have put in requests, she added.

“If we spend it all, we’ll be in the same budget crunch we are now,” Ruth said. “It’s so important to invest this properly.”

The Kennebec Water District, on the other hand, already has put the $1.4 million it received into a special account that can be used only to match retirement payments for its up to 23 employees, said board of directors chairman Al Hodsdon.

“We’re thinking it will last 10 to 12 years, without us having to come up with additional funds,” Hodsdon said.

In SAD 49, the school board is seeking legal advice on how it can use the money, but the money may be brought forward as revenue into next year’s budget, Superintendent Dean Baker said.

“With that kind of unexpected money, we want to know what we’re doing,” he said.

The school district, which includes Fairfield, Albion, Benton and Clinton, slashed almost $430,000 off this year’s school budget after voters rejected a proposed $24.9 million budget in May. A smaller budget was passed less than a month later.

Wilton is scheduled to receive a $1.1 million payment from Maine PERS. Town Manager Rhonda Irish was on vacation and unavailable to comment this week, but the staff at the Town Office said they thought the money would be put toward retirement payments.

Selectman John Black said he was unfamiliar with the issue, and Selectboard Chairman Paul Berkey did not return multiple interview requests.

In Hallowell, City Manager Starn said the one-time revenue kept the city’s property tax stable, at $17.60 per $1,000 worth of property.

The city learned it would receive the money this winter and decided to use it as revenue rather than put it in a separate fund to pay the city’s employer retirement match.

“We debated going that route but decided against it,” Starn said.

Milazzo said the system previously thought federal law required that the money had to be used for pension related costs, but it was told by the IRS during a review five years ago that the money could be returned to the employers “no strings attached.”

With the investments becoming more cumbersome to manage and no restrictions on the use of the fund, Maine PERS decided to return the money to the employers, he said.

“We decided that it just made no sense to continue a situation to which complexity was being added,” Milazzo said.

“The bottom line is it really is the employers’ money, and they need to decide how they want to use it.”

Peter McGuire — 861-9239

[email protected]

Twitter: PeteL_McGuire

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