HALLOWELL — Property taxes are going up $40 on a $100,000 home.

That’s after the City Council gave final approval to a $2.4 million municipal budget that’s up 11.5 percent over last year’s spending plan.

Because of a projected increase in property valuation for the city and a few expenses that came in lower than expected when the fiscal year ended in June, City Manager Michael Starn was able to add some items that were not in the budget on its first reading in June.

That includes $20,000 for City Hall repairs and $20,000 set aside in case councilors decide to commission a feasibility study for a potential Maine Department of Transportation project on Water Street.

City councilors, who took a final vote during a meeting Monday night, approved spending down the city’s surplus to 13 percent of operating expenses to reduce property taxes.

Starn said he has not been informed of Hallowell’s new valuation, but based on the partial information he does have, he projected an increase of 0.5 percent.

He said that raising the property tax rate from 15.3 mills to 15.7 mills — which amounts to 40 cents on each $1,000 of taxable value — will cover the city’s expenses and give councilors an extra $7,000 to $8,000 in case other needs arise.

Councilors Ed Cervone and Steve Vellani and Mayor Charlotte Warren said they are frustrated that for several consecutive years they have had to build budgets based on valuation projections rather than hard data.

Starn said city officials have more information than they did a year ago at this time, and everything should be settled before tax bills go out in mid-August. Starn retired from the Maine Municipal Association in 2010 after 35 years, mostly as communications director and editor of the association’s magazine, The Maine Townsman.

“In my work at (Maine Municipal Association), communities were always hard pressed to get valuations before the start of the fiscal year,” Starn said. “I’ve had a good enough communication with the assessors that I feel comfortable making a projection.”

One expense councilors considered adding into the budget, but unanimously decided against, was dues for the Kennebec Valley Council of Governments.

Resident Frank O’Hara, a planning advisor, urged councilors to reconsider, saying that issues such as economic development, transportation and safeguarding the Kennebec River are shaped by regional factors and KVCOG plays an important role in coordinating among communities.

“To really deal with these issues, you need to be in conversation with other communities,” O’Hara said. “On budget issues in coming years, answers are going to come from working with neighboring communities.”

Hallowell’s membership would cost about $3,000.

KVCOG helped Summit Natural Gas of Maine Inc. negotiate tax breaks with several central Maine communities, including Hallowell. Summit is appealing its loss of a contract to supply natural gas service, and Starn said that if Summit wins, Hallowell will use KVCOG to rework its agreement with the company.

Vellani objected to KVCOG’s work with the gas company, saying he feels Hallowell officials are being lobbied with their own money.

Starn said he thinks a planning and development organization focused on southern Kennebec County would be more relevant to Hallowell, and several councilors said they don’t see the value of membership in KVCOG.

“To the extent that this is a wakeup call, perhaps, for them to come back to us and sell themselves to us, that might be another benefit,” of the council’s decision, Councilor Mark Sullivan said.

Susan McMillan — 621-5645

[email protected]

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