HALLOWELL — City Manager Nate Rudy said this week that he anticipates the city to be about $8,000 short on $2.36 million in bond funds to pay for the Water Street reconstruction project, despite giving the City Council previous guidance that there was enough money left.

City Manager Nate Rudy speaks speaks during a city council retreat Jan. 4 at Maple Hill Farm Inn and Conference Center in Hallowell. Kennebec Journal photo by Joe Phelan Buy this Photo

City officials told the Kennebec Journal that they were confident the city’s staff was continuing to improve their accounting practices and that the bond funds were not inappropriately spent.

At the end of Monday’s City Council meeting, Rudy gave a statement explaining the tracking error, which he said was mentioned at the Jan. 4 City Council retreat by Councilor Maureen Aucoin. He said $355,205 is left on the $2.36 million bond, which is $8,289 less than the projected $363,494 the city will owe to the Maine Department of Transportation for the Water Street reconstruction project.

Rudy said Friday that he is still waiting for the final bill for the project.

In April 2017, the Kennebec Journal reported that residents voted 563-355 to approve the $2.36 million bond. It had six components: $625,000 for the recently completed Water Street reconstruction project; $600,000 for infrastructure improvements at Stevens Commons; $535,000 for rural road maintenance; $300,000 to improve parking in downtown; $220,000 to restore the fire station’s historic tower; and $80,000 for city building maintenance.

Rudy took responsibility for the error at Monday’s meeting and apologized for giving council members “bad guidance” on where the city stood with the bond.


He said Friday that he was under the impression that the city had a surplus of funding, and the balance is lower than expected because the city spent bond funds on other projects, including “higher than expected costs for the Central Street parking lot.”

“I have been reviewing the register and I don’t know how I went from feeling confident that there was more than enough money in the account to pay for the road project to our currently identified projected deficit, however small it may be,” he said. “I was wrong and I’m sorry.”

Rudy said he and the city’s treasurer, Dawna Myrick, “have been and … will continue toward improving our financial account practices.” He added that he would provide monthly reports on a number of city funds to the city’s Finance Committee.

“I just really want to apologize to you all for this error,” Rudy said. “It’s small, but what it represents is important and it’s something that is going to receive my full attention.”

In response to the statement, Aucoin said the city was “doing pretty well” to be within a few thousand dollars of what was estimated, while achieving the projects under the bond.

Councilor George Lapointe, Finance Committee chairperson, said the committee will work on a “plan of attack” to close the gap when the final bill comes in from the state transportation department. He said Friday he was not concerned with the overage and was confident that the city staff was improving their financial accounting practices.


On Friday, Mayor Mark Walker said he has confidence in city staff to “bring accurate balance on bond expenditures” and said the overage of under 0.4% is low considering expenditures spanned over “more than 12 months.”

Aucoin said Friday the City accomplished a “tremendous amount” with the bond and added that none of the bond funds were “inappropriately spent.”

“To do all this and come within less than four-tenths of a percent of our projection speaks highly of the forethought that (the City) Council put into this bond several years ago,” she said, “and their commitment since then to oversee it and make improvements to our city.”

Walker said his biggest disappointment related to the overage was that there will not be a surplus of funds to complete other projects.

Councilor Michael Frett, Diano Circo, Patrick Wynne and Diana Scully did not immediately respond to an emailed request for comment.

Changes to the city’s financial practices were floated in November 2018, after a budget error worth hundreds of thousands of dollars held up that fiscal year’s budget. In May 2019, city officials said they were confident in city staff after more than $200,000 in funds were not sheltered properly as they were not properly assessed as being in a TIF district.

Related Headlines

Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

filed under: