Canton Budget Crisis: Impending Mill Closure
TL/DR –
The Town of Canton, following the closure of the Pactiv Evergreen paper mill, has produced a “necessity” budget for FY 2024-25 with no tax increases and efforts to save money following a $1.3 million decrease in revenue. The major financial challenge rests within the town’s water and sewer fund, which could face a new $4 million expense in wastewater treatment following the mill’s shutdown. If the town has to operate a wastewater treatment facility for a year, the cost could be between $4 and $5 million, potentially nearly doubling water and sewer bills for residents and risking bankruptcy for the town.
Canton’s Conservative Fiscal Year Budget 2024-25 in Response to Economic Challenges
The Town of Canton, recovering from the closure of the Pactiv Evergreen paper mill, has presented a conservative budget for 2024-25 to address sustainability and a significant revenue shortfall. The budget prioritizes necessary expenses over wants, ensuring efficient stewardship of town funds.
The town’s administrator, Lisa Stinnett, shared the budget details during a May 23 meeting. She emphasized the importance of fiscally responsible investments in infrastructure, services, and amenities. The budget maintains the current tax level, uses no general fund balance, and aims to conserve funds wherever possible.
The town faces a drop in revenue of $1.3 million due to the Pactiv closure, effectively erasing over a decade of Canton’s economic growth. Property tax collection is anticipated to fall from $3.4 million to $2.3 million, a level last seen in 2012. To compensate, the town will tap into a $1.3 million fund, appropriated by the General Assembly following the mill’s closure.
The town’s water and sewer fund is set to bear the impact of these financial constraints. Despite a slight increase in revenues to $3.5 million, thanks to high interest rates and an increase in tap fee collections, the expense side paints a different picture. A new $4 million budget item for wastewater treatment could drive total expenses to over $7 million.
A provision in the agreement with the paper mill’s owners had allowed the town’s wastewater to be treated at minimal cost. With the mill’s closure, this provision is set to expire on March 9, 2025. While there is an allocation for the town to construct its own wastewater treatment plant, acquisition of a site is still pending.
A potential deal between Pactiv and Spirtas Worldwide, a demolition and development company, could transfer the mill site and its wastewater treatment facility. However, this deal provides no guarantees concerning the future of wastewater treatment in Canton. If the town has to operate the facility for a year, costs could climb to $4-$5 million.
Water and sewer rates are likely to rise, both for inside and outside customers. For inside customers, rates will move from $17.51 to $18.04 for water, and from $21.51 to $22.16 for sewer service. Outside customers will see rates rise from $35.02 to $36.07 for water, and from $43.01 to $44.30 for sewer service.
The Canton Board will consider adoption of the budget at its meeting on June 13, with a legal deadline of June 30 for approval.
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