WATERVILLE — The City Council wants to look at possibly increasing information technology fees to towns it provides services to, with some councilors saying private companies would charge more than the city charges those municipalities.

That discussion emerged Tuesday night as councilors reviewed the proposed 2019-20 city IT department budget at a workshop.

The department provides services to not only the city, but also to Winslow, Fairfield, Clinton, part of Oakland, the Kennebec Valley Council of Governments, Waterville Opera House and Waterville Public Library, according to Josh Grant, the city’s IT director. Some of those entities are billed hourly, and some in other ways, including through annual contracts.

The hourly rate charged is $85, according to Grant. The city gets $58,000 to $60,000 annually from those municipalities and organizations to which the city provides services. City Manager Michael Roy said that six or seven years ago, when the city did not provide such services, the amount was zero, and he thinks the city’s being the center for IT services is one of its best-kept secrets.

Councilor Jay Coelho, D-Ward 5, said he thinks the city is subsidizing those entities, as private companies charge more for those services. Grant said there is really no other such model in the state for a municipality providing IT services to other municipalities, and how much is charged. Coelho said some companies charge $105 to $125 an hour for such services.

“What I’m hearing is, there is room for an increase,” said Councilor Phil Bofia, R-Ward 2.

Council Chairman Sydney Mayhew, R-Ward 4, asked Roy to review the city’s formula for how it charges other entities for services.

Councilor Erik Thomas, D-Ward 7, said he thinks when the city provides services to other towns, it should be to make money.

“Just as a philosophy, we shouldn’t be doing this for other towns out of the goodness of our heart,” he said.

Roy said he and Grant would return to the council with figures.

“Let Josh and I get back to you with an explanation of what we have currently for formulas — how much we charge hourly for each town,” he said.

The proposed municipal budget for 2019-20 is in the hands of the council, which also reviewed proposals Tuesday for the assessing, city clerk and finance departments.

The proposed municipal budget for 2019-20 is $17.9 million, or a $754,345 increase over the current $17.2 million budget. The proposed school budget is $24.9 million, for a total proposed city and school budget of $42.8 million. The current budget is $41 million. The proposed budget represents a tax rate increase of $1.04 per $1,000 worth of valuation.

Roy said the proposed municipal budget increase is represented mostly in the fact that last year, the city used $800,000 from money the city got from discontinuing its contract with Penobscot Energy Recovery Co. That fund is down to $100,000, which the city will use in the proposed budget.

“Loss of revenue, I think, is as important as general expense increases,” he said of the reason for the proposed increase.

He added that the budget numbers will change before the council takes a first vote on the proposal, likely in June.

“The bottom line is going to change,” he said. “The school revenues could change. I think it is the goal of the council to get that increase below ($1.04) as much as we can. We’ll meet again with the schools to see what we can do to trim that increase.”

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