AUGUSTA — City taxpayers would be looking at a 2 percent property tax increase under the intitial city and school budget proposals.

City Manager William Bridgeo’s city budget proposal of $22.1 million would require a property tax increase of $263,000, or 1.15 percent

When the city budget is combined with the $27 million school budget recently approved by the Board of Education, which requires a .77 percent tax increase, and an estimated county tax assessment up 3.5 percent over the current year, local property owners face a potential 2.06 percent increase.

This equates to a rise of $0.35 per thousand dollars of property value, or an extra $35 for the owner of a $100,000 home.

Neither Bridgeo nor assistant city manager and finance director Ralph St. Pierre, who put together the proposed city budget, expect it to remain as proposed, however.

“I am a realist about what Augusta’s taxpayers can afford to pay in these difficult economic times, and I appreciate that changes to these proposed budgets (with the exception of the county tax over which we have no control) are likely necessary,” Bridgeo wrote in his budget message to the City Council.

“My staff and I are committed to working with you to that end. However I do think it is important that at some point in the year, you and our citizens are provided with a picture of what I believe the city’s operation needs are and the costs associated with them.”

Unlike recent years, the budget does not include major staff cuts, though some vacant positions will remain unfilled, such as an assessing position left when former City Assessor Don Cadwell retired.

Bridgeo’s budget was distributed to the City Council over the weekend.

“I think it’s a remarkable job, from the school department and city management, to deliver a budget with such a modest increase,” said Mayor David Rollins, noting the city has not seen an increase to its tax base to help fund escalating costs. “The increase in the cost of fossil fuels, that’s half the increase right there. That and the jump in our pension obligation is pretty much responsible for the increase. My first review of the budget is, as always, the city and school administration have done a great job of keeping us on track in difficult times.”

The proposed budget continues city shutdown days, but reduces the number from eight to four. Bridgeo said each city shutdown day saves about $17,000.

The municipal budget taps into the city’s undesignated fund balance, or reserve, account for $220,000 to mitigate the proposed tax increase. Bridgeo said the city’s fund balance is currently about $5.5 million, somewhat higher than the 8.3 percent of the total budget the City Charter recommends.

It also taps into an account established with $1.5 million from the sale proceeds from the former Cony High School, which is now a Hannaford.

What to do with the so-called Cony-Hannaford money has been a subject of debate since the city acquired it, including a lengthy court battle that challenged the sale of the property.

Last year, councilors agreed to take $167,000 in Cony-Hannaford funds for the budget — $125,000 in principal and about $42,000 from earned interest, out of the total $1.5 million in the fund.

Bridgeo recommends the city take $167,000 from those funds again this year, but acknowledges “it is still an open policy question as to whether to continue to use those funds to reduce the needs from taxation” or use them for a major capital project.

Bridgeo said at current rates, the original $1.5 million in principle in the Cony fund would be spent in about eight years. He noted the city’s last payment on a substantial pension obligation bond is also in eight years.

Reflecting the escalating cost of fuel, officials project a $1 increase in the per-gallon cost of oil, gas, and diesel fuel. That adds to an additional $182,000 in the city budget, and $85,700 for schools.

Councilors are likely to spend weeks reviewing the budget proposal before voting. The school, but not the city, budget must also be approved by residents in a June 7 referendum vote.

Keith Edwards — 621-5647

[email protected]

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