WATERVILLE — Councilors late Tuesday voted 3–3 on whether to pass a proposed $36.3 million municipal and school budget for 2013-14, with Mayor Karen Heck breaking the tie in favor of the plan.

The council still must take another vote on the budget.

Councilors went into the meeting facing a proposed $36.4 million budget that would have raised the tax rate $2 per $1,000 worth of assessed property.

However, some councilors Tuesday said $2 was too much and taxpayers could not afford such an increase.

“What can we do to get it down to $1.75?” asked Councilor John O’Donnell, D-Ward 5.

Councilor Eliza Mathias, D-Ward 6, agreed that $2 was too much.

“Is it possible to look at other savings to reduce the mill rate increase?” she asked.

City Manager Michael Roy said he spoke with School Superintendent Eric Haley who offered, unless the Board of Education directs him otherwise, to reduce the proposed $20 million school budget by another $115,000. The city would also increase excise tax revenue by $50,000 as the city is expected to receive more in excise taxes than expected, Roy said.

The total of $165,000 from those two items would effectively reduce the tax rate to $1.75, he said.

With a $1.75 increase, the current property tax rate of $25.65 would increase to $27.40, he said. That tax rate was what the city’s rate was 10 years ago, he said.

So a property owner whose property is assessed at $100,000 and who paid $2,565 in taxes would pay $27.40, or a $175 increase.

Last week, the proposed budget was $37.7 million, but councilors decided at a workshop to cut that proposal by increasing the amount of surplus to be used by $400,000, cutting public works by $100,000, eliminating planned paving to the tune of $250,000, finding miscellaneous savings of $26,500, and using $293,000 from school surplus to find teacher retirement.

Council Chairman Erik Thomas, D-Ward 4, said he was concerned about the city’s long-term financial health by using surplus and lowering it to dangerous levels.

O’Donnell said maybe the city shouldn’t spend so much.

“Or be frugal this year in anticipation of next year,” Mathias added.

Councilor Fred Stubbert, D-Ward 1, said he thought it is irresponsible to raise taxes by $2 per $1,000 worth of assessed property.

“The landlords association is upset about this,” he said. “Whether we like it or not, our major industry in this town is subsidized housing.”

He said landlords are in a bind and if taxes are high, they will not be able to maintain their housing.

“If we hit them with a 2-mill tax increase, it’s going to be a major, major problem,” he said.

Councilor Karen Rancourt-Thomas, D-Ward 7, said homeowners also are on fixed incomes and cannot afford increases.

“We need to be fair to them, too.”

Stubbert said the city should not be paying $271,000 to the Waterville Sewerage District for storm water fees. The city has agreed to pay the District until it is legally determined that the city should not pay it.

“So far it’s (the $271,000) in the budget,” Stubbert said. “It should come out of the budget.”

Meanwhile, Roy said the city’s surplus started out at 18 percent of the budget, which is the recommended amount to keep. It was reduced to 16 percent and then 12 percent, he said.

“If we spend the same amount of surplus next year — $1.4 million — we’re going to be way below 12 percent,” he said.

Lowering it further would be risky, he said.

“We’re going to be paying the piper at some point.”

Heck blamed the state for local budget problems and said people need to “make a bigger noise in Augusta.”

Roy said to cut the budget further would mean cutting programs and people. Thomas said the effect of more cuts could mean people would have to pay for trash pickup, road maintenance would suffer and school quality would be affected.

Heck and Roy noted that Waterville is small in area but has a lot of nonprofits that do not pay taxes, including colleges, hospitals and churches.

Stubbert, Mathias and O’Donnell voted against the proposed $36.3 million budget; Thomas, Rancourt-Thomas and Councilor Rosemary Winslow, D-Ward 3, voted to approve it. Councilor Michael Owens, D-Ward 2, was absent.

Heck broke the 3–3 tie, but city officials were not sure whether the mayor could break a tie in budget matters. Mathias said she thought Owens should be present at a third vote on the budget, and others agreed, so they did not take a third vote Tuesday.

Amy Calder — 861-9247
[email protected]