WATERVILLE — City councilors voted unanimously Tuesday to approve a proposed $37.4 million municipal and school budget for 2015-16 that would increase the tax rate by 50 cents per $1,000 worth of property valuation.

The council must take two more votes on the proposal in order to make it final, and councilors said the numbers could change for the better between now and the final vote.

A person owning a $100,000 property would pay $50 more in yearly taxes if the numbers stay the way they are.

Council Chairman Fred Stubbert, D-Ward 1, said the numbers look a lot better than they did two weeks ago, when the council was considering a $37.8 million budget that would have increased the tax rate by $2.50. In that scenario, a resident with a property valued at $100,000 would have paid $250 more in taxes.

“These aren’t the final numbers,” Stubbert said of the new $37.4 million proposal. “There may very well be improvements. You can be sure it’s not going to get any worse than this. This is probably the worst it’s going to get.”

The proposed $37.4 million budget represents a 0.5 percent increase — about $200,000 — from the current $37.2 million budget, according to the city’s finance director, Chuck Calkins.

The proposal would increase the current tax rate of $27.40 per $1,000 of valuation to $27.90, he said. Expenses would increase 0.5 percent, but the tax rate would grow 1.8 percent, Calkins said.

City Manager Michael Roy said the city’s finance committee met last week and worked on the proposal.

Changes made to trim it included a $208,838 reduction in school expenses, he said.

“So that’s certainly a much better picture than it looked a couple of weeks ago,” Roy said.

Councilor Sydney Mayhew, R-Ward 4, agreed.

“Getting it down to a half a mill (50 cents per $1,000 of valuation) is definitely a step in the right direction,” he said.

Roy said other changes to the proposed budget included an increase in the city’s refund from Penobscot Energy Recovery Co. of $50,750. PERC, of Orrington, accepts Waterville trash and burns it. Roy said trash that is not picked up by the city goes to the transfer station on Airport Road, as does trash from large residential buildings, and while the city does not handle it, it still gets recorded as Waterville trash for which the city receives a rebate from PERC.

“It amounts to a very substantial number, as you can see,” he said.

Another item that reduced the budget proposal is $10,000 to be realized from increased information technology fees to towns for which the city does IT work, according to Roy.

“The fees for IT services need to be adjusted,” he said.

An earlier proposal to cut the Kennebec Valley Community Action Program van service has been restored in the proposed budget, according to Roy.

Councilor Dana Bushee, D-Ward 6, said the restoration shows that councilors, the mayor and other city officials responded to residents’ concerns about losing the van service.

“I’m thankful that it’s back in the budget,” Bushee said.

Roy said a plan to hire an employee in the Code Enforcement Office for $57,000 was removed from the proposed budget.

Meanwhile, Mayor Nick Isgro, who led the charge to cut the budget to prevent a significant tax increase, reminded those present that the city doesn’t have the final numbers from the state as to how much money the city will receive as revenue sharing and state aid to education.

Roy said the state budget went before the full Legislature Tuesday afternoon.

“Will it have a two-thirds majority?” Councilor John O’Donnell, D-Ward 5, asked.

“Ah, no comment,” Roy replied, to laughter.

The Waterville Board of Education on Tuesday called a special meeting for 7:30 a.m. Wednesday to discuss proposed cuts to the school budget, as well as revenue. That meeting will be in the superintendent’s office on Messalonskee Avenue.

Amy Calder — 861-9247

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Twitter: @AmyCalder17