HALLOWELL — After more than four years on the job, City Manager Nate Rudy is leaving to become Gray’s new town manager.

Hallowell City Manager Nate Rudy speaks during a City Council retreat Jan. 4, 2020, at Maple Hill Farm Bed & Breakfast Inn and Conference Center in Hallowell. Joe Phelan/Kennebec Journal file Buy this Photo

The news was announced on the Gray town website Wednesday, and reported by the Lakes Region Weekly.

Rudy’s starting salary will be $105,000 annually, pending the confirmation of a three-year contract by the Gray Town Council expected at a meeting Tuesday. He is expected to start his new job March 1.

According to a draft employment agreement posted on the Gray town website, Rudy will be paid a monthly $250 car allowance and a monthly $50 cellphone plan allowance.

Gray will also pay for professional dues for Rudy to be a part of the Maine Town and City Management Association and the International City Management Association, and “all reasonable costs associated with … attendance” to the ICMA Annual Conference and the MTCMA Managers’ Institute “and/or other relevant training, conferences or workshops.” A minimum of $3,000 will be budgeted to cover those dues.

The agreement also states that Rudy will receive full health insurance for himself and any dependents at no cost, and he may do consulting work for nonprofits if it doesn’t interfere with town business.

Hallowell Mayor George Lapointe said Rudy’s last day in Hallowell is Feb. 25. His current salary in Hallowell is $74,446.

Rudy said Thursday that Gray is a town looking to grow its sense of place, and he was looking forward to reinforcing “all the things that Gray residents love about their town.”

“Gray is a great location between Auburn, Freeport and Portland,” he said. “It’s similar to the work we’ve done here in Hallowell.”

Rudy said a few highlights from his tenure in Hallowell including securing a Brownfields grant, the reconstruction of Water Street and infrastructure projects related to the 2017 bond. He said he would have liked to be a part of the upcoming work on economic development that has been prescribed by Lapointe.

“I wish I could have made it to open mic more often, personally,” Rudy said with a laugh.

He said he was proud of the work that he has done along with other city staff members and “all of the great citizen volunteers.”

“Without those folks, none of these projects would have been possible,” Rudy said. “I wish them and Hallowell … success.”

The City Council’s Personnel Committee met Thursday morning and briefly touched on the matter. Councilor Diana Scully mentioned that the city would need to deal with Rudy’s departure “very shortly” after Councilor Maureen AuCoin asked if the committee would discuss the departure at the meeting.

Lapointe said city staff is looking to modernize the job listing used to hire Rudy in 2016 and get the notice out to begin the hiring process.

Lapointe said he is mulling the appointment of an interim city manager, but he has not decided who that may be.

“My understanding is that it doesn’t have to be a city employee,” he said. “I want to talk to (city officials) about that before we go too far.”

Lapointe said Rudy’s departure will hamper some of the city’s progress on larger issues in the short term, as a new hire will have to be brought up to speed.

He wished Rudy well in the new position.

“I wish he wasn’t going, because we’re very busy,” Lapointe said. “He’s dedicated to our city, and he knows the issues.”

Ward 2 City Councilor Michael Frett said that his time working with Rudy has been “extremely productive, professional and focused.”

“I’ve been an executive in a number of places,” Frett said. “I never felt he had an agenda that he was looking to push.”

Frett said that he found Rudy to be a “real person” who was receptive in any scenario, and he was sorry to see him leave the city and would look for qualities that Rudy possessed when looking for his replacement.

“I can drive down (Water Street) and there he is standing on the sidewalk playing his guitar,” he said. “Anytime I had to sit down and work stuff out or get information …, he was always spot on.”

The Readfield resident previously worked as director of planning and development in Gardiner. Before becoming Hallowell’s city manager in 2016, Rudy was executive director for Waterville Creates!, a nonprofit organization for the promotion of arts and culture in Waterville.

According to the Lakes Region Weekly report, Rudy will replace Deb Cabana, who is retiring after 15 years as town manager. Council Chairperson Sandy Carder said in December that the town received 22 applications for the position after a nationwide search.

Carder said Thursday an initial field of 22 candidates was narrowed to five by the Town Council, with the help of consultant Don Gerrish of the Eaton Peabody Consulting Group.

Carder said Gerrish handled the background checks, screening of applications and set interview times on behalf the town, but the Town Council received a binder of applications before narrowing the search to five, then to two finalists. She said the two finalists had separate interviews with councilors and department heads before the final decision was reached.

Carder said Rudy’s background in economic development and planning from his work in Gardiner made him the correct candidate for the job. She said Gray has just updated its comprehensive plan and has some upcoming infrastructure-related projects, which Rudy’s experience could guide.

In 2019, Rudy was awarded a new three-year contract in Hallowell that included a 5% raise. That contract was awarded by a 6-1 vote, with Aucoin dissenting.

While Rudy cited several projects completed under his watch, a few issues also arose during his tenure.

AuCoin brought tax increment financing district errors to light in April 2019, when she alleged that more than $200,000 in property tax revenue was sent to the general fund instead of being sheltered for projects denoted as part of the city’s Downtown TIF District. Further uncertainty about how some numbers from the city’s TIF districts slowed down the crafting of the next fiscal year’s budget.

Rudy said that the city underwent an extensive audit of the TIF following Aucoin’s assertion, and found that the city actually sheltered an amount “very close” to what it should have. In 2020, the city asked the Department of Economic and Community Development to amend the Overall Assessed Value of the city’s Downtown TIF District, changing it from $30,497,600 to $41,200,700.

According to a spreadsheet provided to the Kennebec Journal by Rudy at the time, using the amended OAV, the city would have collected $804,515 from the downtown district with the new OAV, a difference of $15,011 from the city’s actual collection of $789,504, from fiscal year 2017 to fiscal year 2020. He said this spreadsheet shows that the assertion that the city did not shelter hundreds of thousands of dollars is not accurate. Rudy said Thursday that said city staff has worked to “correct and redress” those assertions for years.

There was another budget error in 2018, when city officials double-counted revenue after passing the fiscal year 2019 budget through its final reading in August 2018. City officials said $150,000 in carry-forward revenue was not included in the revenue budget approved by councilors, and $253,040 in revenue was double counted on the city’s tax rate calculation sheet. The two errors, however, somewhat offset each other and effectively reduced the impact to about $103,000 on the tax rate calculation sheet. The errors will did not affect the mill rate or the tax bills that year.

Touching on those errors, Rudy said that the city has clarified misunderstanding about city finances and budgets during his tenure and addressed “historic errors in the TIF fund valuation.”

When asked about the errors in 2018 and 2019, Frett said he has always been confident in Rudy’s ability.

“I think that entire matter has been sufficiently resolved,” he said.

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