WATERVILLE — City councilors on Tuesday started reviewing a proposed $17.1 million municipal budget for 2013-14 — a budget that represents a $874 decrease from the current budget.
City Manager Michael Roy said the proposal hinges on three things: that the state does not decrease revenue sharing; that the city be successful in its bid to stop paying Waterville Sewerage District $271,000 in storm water fees; and that councilors support a change in the fund balance, or surplus, policy that requires the city to have a balance of 16 percent.
“I don’t believe the Legislature is going to approve the governor’s cuts to revenue sharing,” Roy said before the meeting. “However, our state revenue is still $1.3 million below what it was in 2009.”
The proposed municipal budget would increase the current $25.65 tax rate by $1 per $1,000 worth of valuation, he said.
However, school officials have not yet presented their proposed budget to the city. Roy said the preliminary school budget proposal is $20.3 million, which represents a $581,216 increase from the current $19.7 school budget. Increases are reflected in debt service for repairs made to Waterville Senior High School, as well as salaries, insurance and utilities for schools.
The proposed school and city budgets, combined, total $37.5 million — an increase from the current combined $36.9 million budget.
“We’re still awaiting the schools’ final number,” Roy noted, adding that schools are still waiting to learn what their state subsidy will be.
“I believe we’re delivering a responsible budget on the city side,” he said. “There are no increases in expenditures; however, with the current lack of revenues and the decreased use of surplus, there’s a one-mill ($1 per $1,000 of property valuation) increase proposed on the city side alone.”
He said the city has been using surplus to subsidize budgets, but surplus is decreasing. The city’s current surplus is $6 million.
“There’s no written (law), but the standard for having a cushion is to have two months’ worth of operating expenses,” he said. “Two months out of 12 equals 16 percent. A two-month operating budget for us is just about $6 million.”
If councilors approve dropping below the 16 percent standard for surplus, and the city uses $1 million of the current $6 million city surplus, the percent of surplus would drop to 13.5 percent, Roy said.
“The real concern is a year from now,” he said. “That’s a bigger concern to me than the current budget.”
In a memo to Mayor Karen Heck and councilors, dated March 25, Roy wrote that loss of state revenue for both the city and schools has been catastrophic to the effort to maintain a stable tax rate. State revenue sharing decreased from $2.9 million in 2009 to $1.6 million today, he said.
The city’s use of surplus, TIF (tax increment financing) money, funds from the landfill and other sources has increased dramatically over time, according to Roy.
Meanwhile, at Tuesday’s meeting, City Clerk Patti Dubois presented a proposed $188,300 budget for her department — an amount that is $4,150 more than her current budget. The increase is reflected in the cost for leasing voting machines.
City Assessor Paul Castonguay’s budget presentation prompted a discussion about the city’s need for a revaluation. The last complete revaluation was done in 1993. Castonguay said a revaluation would cost about $400,000 and take about two years to complete.
“I think we should think about it,” Roy said of having a revaluation.
“I’d love to have one done,” Castonguay said.
Amy Calder — 861-9247