The Gardiner City Council will try its hand at devising budget cuts next week, following a presentation from City Manager Scott Morelli on Wednesday night that outlined a lengthy list of reductions needed to soften the blow of a tax increase.

In April, Morelli proposed a budget for next fiscal year that would have increased taxes by 5 percent. Along with another 2.5 percent tax increase from expected school and county budgets, the tax bill for the median home valued at $147,000 would have increased by $220.

Following guidance from city councilors two weeks ago, Morelli presented a budget Wednesday that would increase taxes 2.5 percent, but would result in the layoffs of two full-time staff members, the reduction of a two full-time staffers to part-time and the reduction of around 30 budget items. It would also eliminate all but one student aide at the library and a public works intern.

Morelli said he wouldn’t recommend those cuts and instead asked councilors to consider a budget that would raise taxes by 3 percent and would prevent any full-time staff positions from being cut or reduced to part-time. That proposal would also lower the reduction in contributions to the major nonprofit organizations — Boys and Girls Club of Greater Gardiner, Gardiner Main Street, Johnson Hall Performing Arts Center and Chrysalis Place food pantry.

That budget, along with the school and county, would raise the tax rate from $19.90 to $21 per $1,000 of assessed value, according to Morelli. It would raise taxes for the median home by $162, he said.

Some councilors, including Mayor Thomas Harnett, voiced initial support for the budget with the 3 percent tax increase, but the council decided to devote its meeting next week as a workshop to take a deeper look at the budget.

Councilor Patricia Hart, who proposed the workshop, said it’s needed to set priorities for what city services councilors want to improve or scale back.

Prior to the meeting Wednesday, city staff will compile additional information requested by councilors on city services and the budget, such as the historical trends of calls to the police, the use of library services and comparisons of budgets in similar municipalities.

Morelli said even though the city’s population has declined — from 1990 and 2010, it’s gone down by 14 percent, to about 5,800 residents — he thinks the use of services has increased in recent years. He said he thinks councilors will find that the city is appropriately staffed, and he hopes they will go back to the budget with the 3 percent tax increase.

The delay in the budget process essentially guarantees, unless additional meetings are scheduled, that the city won’t have a new budget in time for the start of the next fiscal year on July 1. The council needs to hold two public hearings of the budget before it’s approved, and it doesn’t go into effect until 10 days after that.

Although they were alerted more than a year ago that the city would be facing a large deficit in this budget, councilors haven’t provided any specific guidance on what type of services they would want cut to reduce to budget.

Councilors gave Morelli direction in October to present a budget with less than a 10 percent increase.

“We did that, and now it’s late in the game,” Morelli said Thursday. “It’s going to be a little bit harder to make longer-term decisions when you’re dealing with only a month of time before the budget goes into effect.”

If a budget isn’t in place before July, the council will have to pass a continuing resolution for the city to operate at the previous budget levels, as it did last year before the budget was enacted.

“They’re the policymakers in the city,” Morelli said of the councilors. “They talk to the residents, and they’re the ones that have the pulse on what (residents) want. We’ll provide them with the data for them to make whatever decisions they want to make.”

Councilors at their meeting Wednesday also held the final reading and public hearing for several land use ordinance changes. The most significant change is a policy that will allow some designated commercial uses in older industrial or institutional buildings, such as former churches or schools, in the high-density residential zone. The changes will go into effect 30 days from Wednesday.

The adaptive reuse overlay district would give the city the framework to allow building reuse on a case-by-case basis. It could only be used for buildings that are no longer economically viable or physically suitable for uses allowed in the districts in which they’re located. The Planning Board and City Council would still need to approve each site proposal.

Also at their meeting, councilors approved a plan from a builder to modify an under construction house on Partridge Drive to better match the style of the other homes in the neighborhood.

The city sold the property, along with three others, and the purchase-and-sale agreements required houses built on the lots to be of a comparable style and square footage to the other houses on the one-way street.

Residents of the one-way street have voiced concerns to the city that the house being built by Mike Adams, contractor and husband of the owner of two of the properties, doesn’t look similar to the other ones. For instance, the partially completed home has a blue metal roof, while the other houses have shingled roofs.

Councilors approved Adams’ plan to add a dormer and are requiring him to bring plans for the houses he will build on the other properties to council for approval prior to starting construction.

Paul Koenig — 621-5663 | [email protected] | Twitter: @paul_koenig

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