WATERVILLE — City councilors and members of the Board of Education on Tuesday got a first look at a proposed $38.4 million municipal and school budget for 2014-15 — a figure that reflects a $1.1 million increase from the current $37.2 million budget.
The proposed municipal budget is $20.7 million, an increase from the $20.2 million budget for 2013-14; the proposed school budget is $17.7 million, also up from the current $17 million budget.
The proposed school budget represents a $507,518 increase over the current budget; the proposed city budget is up $650,587.
City Manager Michael Roy said if the proposed budget is approved, this would be the fourth consecutive year taxes will have increased, representing a total increase of 20 percent since 2011.
He attributes nearly all of the increase to reduction of state revenue.
“From a peak of $2.9 million in 2008 to the $1,023,000 amount predicted for 2014-15, this represents a loss of approximately $1.9 million, or a 2.9 mill increase to our tax rate,” Roy said in a memo to Mayor Karen Heck and councilors.
Municipal expenditures are up 3.82 percent but include a recommended $250,000 for annual paving work that was not in the 2013-14 budget, according to Roy. The proposed municipal budget does not include new positions or programs, and one position in the finance department is to be eliminated.
Revenue is estimated to be nearly 4 percent lower than last year, in large part because of a continued loss of revenue sharing and an anticipated decrease in revenue from the municipal airport of $90,000 because the main runway will be closed this summer for construction work.
The city proposes to use $1 million from surplus in the proposed budget. That figure is $400,000 less than what was used in surplus in the 2013-14 budget.
If the city uses that $1 million, this will have been the sixth year in a row the city has budgeted that amount, or more, to cover operational expenses, according to Roy. During some of those years, the city used less surplus than planned; but the surplus, or fund balance, has decreased from $10.4 million in 2008 to an estimated $7.2 million expected to be in the account by June 30, the end of the city’s fiscal year.
Roy said surplus can not continue to be used indefinitely as a major revenue source.
“One of the big questions is, what are we going to have a year from now?” Roy said Tuesday.
The proposed school budget represents what Roy calls the one bright spot in the proposed 2014-15 budget, as expenses have increased 2.4 percent; but state subsidy is estimated to increase by $825,000. If that is the amount of general purpose aid the schools receive, the schools’ request to the city would be $208,000 less than last year.
Meanwhile, School Superintendent Eric Haley said the increase in the schools’ proposed budget is the result of increases in insurances, as well as a 2 percent increase in salaries.
He said the amount of federal and state dollars schools receive is based on the number of children who are eligible for free and reduced-price lunches, and 70 percent of students in Waterville are eligible.
Councilor Dana Bushee, D-Ward 6, said a lot of families do not apply for free and reduced lunches because they feel they are taking something away from the schools, but Haley said that actually, the opposite is true: The more students that qualify, the more subsidy the schools get.
“We’ve worked hard in the last two or three years to make it well known that it serves our best interest,” he said.
Assistant Superintendent Peter Thiboutot said that when students get into high school, many are embarrassed to receive free and reduced-price lunches.
Bushee said she will relay the message to parents that it is better for more students to qualify for those lunches.
“At the elementary level, it’s the parents who are embarrassed (to ask for free and reduced) and when they get older, it’s the kids,” she said.
After the joint meeting with councilors and school board members ended, councilors voted 7-0 to approve an agreement with Springbrook Fuel to buy heating oil for 2014-15 at $3.1725 per gallon. Last year, the city paid $3.31 per gallon, according to Roy.
“This is a great deal,” Councilor Edward Lachowicz, D-Ward 2, said of the Springbrook deal.
Councilor John O’Donnell, D-Ward 5, asked whether the city plans to hook up to natural gas when the Summit Natural Gas pipeline comes through. Heck joined O’Donnell in his query.
“At what point do we budget to switch to natural gas?” she asked.
Roy said he was not budgeting any money for that purpose in the coming year. Only four buildings would be considered for natural gas — City Hall, the fire station, the police station and public works, he said. The library and schools make their own decisions about whether to switch to natural gas, he said.
Councilor Erik Thomas, D-Ward 4, said costs for possible natural gas, as well as boiler conversions, should be something the city should consider the next time it borrows money.
Heck said that if Summit does build a pipeline down Main Street this year, city officials should know that. She and Thomas said they hoped Summit would come to the city and explain their plans for laying pipe this year in the city.
“When we do have them come in, we should make sure that the public knows, so the public can come in,” Heck said.