CHELSEA — When property tax bills go out this week, they will come with a small increase.

Chelsea’s mill rate has been calculated at $18.10 per $1,000 of assessed valuation, 10 cents more than last year.

But that amount is less than it could have been, because Chelsea selectmen opted to use $100,000 in the town’s undesignated fund balance to bring down the mill rate in the face of increased assessments from Kennebec County and Regional School Unit 12 that could have added as much as 50 cents to the mill rate.

Chelsea voters approved the town’s $1.21 million spending plan in mid-June, but at that time, the mill rate had not been calculated.

Chelsea Town Manager Scott Tilton said this is the first time in a number of years that selectmen have opted to make such a move.

“When I got here, the undesignated fund balance was about $70,000,” he said.

Tilton recently marked his fifth anniversary on the job. In those five years, he said, he and the selectmen have worked to build that fund to more than $1 million.

Chelsea’s policy is to keep at least two months’ worth of expenses on hand in that fund to cover emergencies. Even after moving the money to buy down the mill rate, he said, the fund more than meets that requirement.

Town officials were able to build that fund by socking away unanticipated revenues, revenues beyond what’s budgeted, and unused overlay money.

“Last year, we sold a tax-acquired property, and that money goes in that fund, too,” Tilton said.

Rick Danforth, chairman of the Chelsea Select Board, said he gives a lot of credit to Tilton and select board members Benjamin Smith and Michael Pushard for turning around the town’s finances.

“They were here during what I call the tumultuous years, and they put a lot of sound policies in place,” Danforth said.

For a period of time, the staff at the Chelsea town office underwent a great deal of turnover during the time that former selectwoman Carole Swan served on the board. Swan is serving more than seven years in federal prison following her conviction on extortion and fraud charges.

In the future, Danforth said, the board of selectmen may apply funds from undesignated fund balance to town projects like paving to lessen the impact on the taxpayers.

“This is a good way for us to keep track of that,” he said. “Eventually, the money will make it back to the taxpayers. We do not want that fund to keep growing and growing.”

Even with the increase, Tilton said many town residents will in fact see a decrease in their tax bills, thanks to an expansion of the homestead exemption that state lawmakers have enacted, increasing from $10,000 to $15,000 the amount that homeowners can shield from property taxes.

Jessica Lowell — 621-5632

[email protected]

Twitter: @JLowellKJ

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