WATERVILLE — City councilors on Tuesday voted 5-1 to approve a proposed $37.2 million budget for 2014-15 that includes a pay-as-you-throw system of trash collection and does not raise the current $27.40 tax rate.

The council must take two more votes on the proposed budget to finalize it. As part of approval, they also must vote to set a referendum for June 2015 for voters to decide whether to continue with the pay-as-you-throw program.

City Manager Michael Roy said councilors will vote to set that referendum at their next meeting Tuesday, June 3.

Councilor Karen Rancourt-Thomas, D-Ward 7, was the lone dissenter in Tuesday’s vote, saying making people buy special trash bags for $2 amounts to an additional service fee.

“It’s a tax increase,” she said.

City Manager Michael Roy, who supports instituting the pay-as-you-throw program, said it would represent an increase in fees, but not to just property taxpayers, but renters as well.

“It’s an increase in fees that people are not currently paying,” he said.

Councilor John O’Donnell, D-Ward 5, was absent from Tuesday’s meeting.

Pay-as-you-throw would be coordinated by the North Carolina company, WasteZero. The company will supply area stores with special trash bags, including a $2 bag from which the city will get $1.65 in revenue from each bag sold, and WasteZero will get 35 cents. WasteZero will keep track of the number of bags sold, give the city its share of revenue and keep its own share.

Residents currently put their trash at the curb, at no extra cost, and have the option of taking their recyclables to Shredding on Site, on Armory Road.

With pay-as-you-throw, the city’s public works department will continue to pick up trash at the curb, but the city will hire Sullivan Disposal to collect recyclables at the curb and take them to Ecomaine in Portland to be sorted. Residents may place all recyclables, including glass, paper, plastic and tin cans, in a container marked as such.

The city estimates pay-as-you-throw will generate $323,000 in the first 10 months after expenses. The city’s goal is to decrease the amount of trash taken to Oakland and then to Penobscot Energy Recovery Co. in Orrington. The city’s contract with PERC expires in 2018 and the cost to dispose of trash after that could triple, city officials say. They say they expect people will recycle more if they have to pay for their trash bags.

Apartment owners who have more than four apartments in one building will continue to contract with private haulers, as they do now, for trash removal.

About 60 people turned out for Tuesday’s meeting in the council chambers. Some said they support pay-as-you-throw and some said they did not.

Stu Silverstein, a member of a committee that studied pay-as-you-throw, said he and his wife take their recyclables to Shredding on Site and that contributes to air pollution and traffic congestion, but people who do not have cars do not have the luxury of recycling. He said the recycling area at Shredding on Site is muddy when it rains and it is not clear where certain recylables should be placed.

“If you’re paying $2 a bag, you’re going to be very careful about how much trash you put in that bag,” Silverstein said.

He said he is an environmentalist and not afraid to say so.

“I say, let’s not trash recycling, but let’s recycle our trash.”

Former City Councilor Steve Aucoin thanked city officials and councilors for developing a budget that does not increase taxes.

He disputed some people’s claims that renters do not pay taxes, saying they pay taxes as part of their rent and it is unfair to say renters do not help foot the bill for trash removal.

He went on to say that the reason Waterville is behind the 8-ball is that the state removed municipal revenue sharing. Waterville is 13 square miles and a third of that area is tax-exempt, Aucoin said.

Churches, colleges, hospitals and other nonprofit organizations and institutions do not pay taxes.

“That’s a creation of the state,” Aucoin said, adding that all parties should get together to find a solution to the problem.

“It is absolutely the lynch pin of why we find ourselves continually behind the 8-ball,” he said.

Rancourt Thomas’ son, Nate Thomas, a Waterville Senior High School graduate and Thomas College student, said he opposes pay-as-you-throw. He said if one earns minimum wage, which is $7.50 an hour, and gets paid $180 a week as he does, then one would not be able to afford a $2 trash bag.

Furthermore, he said, with pay-as-you-throw, there will be more illegal dumping, such as occurs behind Pine Grove Cemetery in the city’s South End where he lives and where a fire last week caught onto a big trash pile. He said he also thinks people will throw trash in the Kennebec River, where it will move south to Augusta.

“There are ways around this and frankly, you’re not going to catch anyone dumping,” he said.

Nick Isgro told the council he thought it was disingenuous to say the budget does not represent a tax increase.

“The reality is, it’s a fee…it’s a tax,” he said.

The city has a spending problem and spends millions of dollars in capital improvements but then maintains it needs money, Isgro said.

The issue is not about money, it’s about fiscal management and running the city and the city needs to develop a budget the way families do, he said.

But Councilor Erik Thomas, D-Ward 4, said people like to talk about the lower tax rates in some surrounding towns, but those towns do not pick up residents’ trash.

Isgro said for a $5 sticker, he would take his trash to the dump; Nate Thomas said he would do the same.

Meanwhile, Amy Irish said she was on the fence about pay-as-you-throw, but she researched the issue and now supports the program. She will recycling a lot of items she now puts in the trash, when the new program is in place, she said.

“I went to Shredding on Site and if there was ever a place that was begging to be relieved of its responsibility — I didn’t even want to get out of my car,” Irish said, to laughter from the audience. “That place is going to be on an episode of ‘Hoarders.’”

Amy Calder — 861-9247 | [email protected] | Twitter: @AmyCalder17