HALLOWELL — A drastic change in the city’s Fire Department and increases in administrative costs and legal services are expected to cause an uptick in the municipal budget for the coming year.

City Manager Nate Rudy’s preliminary report to the City Council earlier this month showed an increase of almost $172,000, or 2.92 percent, for fiscal year 2018’s budget. But Rudy said there is ample time to make adjustments that would keep the current tax rate of $18.90 per $1,000 of assessed property value.

“As we go through the first, second and third budget readings, we’ll continue to dial in and trim back as needed to try and balance the desire to keep flat or reduce the mil rate with all the carrying costs to manage the different departments,” Rudy said Tuesday.

Rudy’s proposed budget would increase city spending from $5.87 million to $6.04 million for the fiscal year that starts July 1.

The biggest increase, as of now, is the addition of more than $100,000 to the fire services budget line. Last year the city budgeted $48,875 for fire services, but this year Rudy has proposed about $158,000. Funding the city’s part-time fire chief, the purchase of new self-contained breathing devices and costs associated with the construction and maintenance of a new fire station contributed to the increase. There are also additional expenses to replace outdated equipment including pagers, radios and fire protection clothing.

Before Jim Owens was named chief in February, Chief Mike Grant worked a limited schedule for about $6,000 in pay. Owens works about 20 hours per week at $20 an hour, or $20,800 per year; the breathing devices will cost the city around $55,000. Last month, an anonymous donor pledged up to $1 million for the construction of a new fire station at Stevens Commons, but the city will be on the hook for maintaining the new building when it’s built.

“That number reflects a correction (from the previous plan), and it’s a big pill to swallow for one year, or maybe two,” Rudy said, referring to the council’s original decision to lease space at a proposed new Farmingdale station for $25,000 per year. “Then we’ll be back to a more reasonable amount for fire services year-to-year.”

The city also has budgeted for twice last year’s amount for legal services. The city retained Drummond Woodsum in Portland for legal counsel, and Rudy anticipates a lot of activity around real estate transactions and the bond question. He’s budgeted $60,000 for the coming year, which is $30,000 more than the previous fiscal year’s figure, but thinks that’s probably on the higher end of projections.

“It’s going to require a little more legal activity,” Rudy said, referring to all the projects going on in Hallowell. “There’ll be a conversation about the fire station and the legality of the contracts, the donor gift and the purchase of any land.”

If Hallowell voters approve a $2.36 million bond during a special election April 28, the city will pay about $155,000 per year to pay off the loan. The finance committee has recommended $100,000 of that from tax increment financing revenue, leaving $55,000 in new annual debt.

Hallowell is saving money in areas including code enforcement and employee insurance. There are reduced costs associated with shifting from a salaried employee to a part-time, hourly code enforcement officer with limited benefits. Road opening fees have been shifted to the public works budget because the code enforcement officer no longer also serves as road commissioner nor oversees road projects.

“Public works and the Police Department have done a great job in keeping their budgets tidy,” Rudy said. “There’s some real leadership challenges for us on local, county and school levels to meet community expectations as far as service and the amount they pay to receive those services.”

The proposed budget doesn’t include the money the city will contribute to Regional School Unit 2’s coffers. Last year, the city’s share was $2,848,865, but Rudy said the city won’t know this year’s tally until after the school budget goes to voters this summer. He said all indications are that Hallowell is “looking at a pretty substantial cost increase in the school budget.”

Rudy said there are many important projects happening around Hallowell — including a Water Street reconstruction project and the Stevens Commons redevelopment — that the community has prioritized. He said he’ll work to trim costs in other areas.

“But at a certain point, you can only do so much trimming on the fringes,” he said. “The goal is to demonstrate that there’s a need for funding to maintain the assets that the city has, particularly the public safety services we offer.”

The council is expected to conduct the first reading of the budget at its May 8 meeting.

Jason Pafundi — 621-5663

jpafundi@centralmaine.com

Twitter: @jasonpafundiKJ

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