HALLOWELL — The City Council and members of the public discussed the municipal budget for three hours Tuesday evening, but confusion ultimately postponed the second budget reading — for the second time this month — until July.

The special meeting held Tuesday at the City Hall centered around three budget scenarios, which all raised property taxes by more than 8%. The council’s Finance Committee — made up of Councilors George Lapointe, Kate Dufour and Maureen Aucoin — will meet in the coming days to quell confusion about line items on both the revenue and expense sides of the budget.

Ahead of Tuesday’s special meeting, City Manager Nate Rudy distributed three tax commitment sheets indicative of three scenarios for the budget, which incrementally cut back on expenditures.

The budget is showing major increases in spending compared to the current fiscal year. The current fiscal year’s municipal spending is $5,773,289. City officials said the budget was increasing because of large capital expenditures that have been backlogged. Last month, councilors authorized funding for a new loader after the Public Works Department’s broke, which removed that item from the next fiscal year’s budget.

Each scenario results in an increase in the property tax rate, which is currently $19.70 per $1,000 of property value in the current fiscal year. The first scenario results in a tax rate of $22.10, the second results in a tax rate of $21.50, and the third scenario results in a property tax rate of $21.40. Those would translate to 12.2%, 9.1% and 8.6% increases in property taxes, respectively, according to a June 24 memo from Rudy to the council.

The total budget in the first scenario, which has the fewest cuts of the three, is $6,454,931, breaking down to $266,560 in county tax, a $3,062,505 payment to Regional School Unit 2 and $3,125,866 in municipal spending.

Notable cuts from previous budget drafts in the first scenario include a number of small cuts and:

• $18,000 in funding for Hubbard Free Library, reducing the line to $42,000;

• $32,000 for a lease for a Fire Department vehicle, reducing the line to $48,000;

• $13,000 for a salt shed, reducing the line to $6,000;

• and $52,800 in funding for replacement of decking on the bulkhead, reducing the line to $15,000.

The second scenario shows $2,994,675 in municipal spending, making an additional $131,191 in cuts:

• $28,891 for the assistant clerk position, eliminating all funding;

• $3,100 in funding for a summer intern, reducing the line to $3,100;

• $10,000 in legal service funding, reducing the line to $40,000;

• $5,200 in Police Department salary adjustments, reducing the line to $5,200;

• $10,000 from a strategic planning consultant for Hubbard Free Library, reducing the line to $5,000;

• $7,000 from a police cruiser purchase, which replaces the vehicle with trade-in value, reducing the line to $36,000;

• $48,000 in further cuts to the fire vehicle lease, eliminating all funding;

• $6,000 for a salt shed, eliminating all funding; and

• $13,000 for an extrication tool, eliminating all funding.

The third scenario shows $2,965,475 in municipal spending after $29,200 in further cuts:

• $5,200 for Police Department salary adjustments, eliminating all funding;

• $1,000 from call and training pay for firefighters, reducing the line to $24,000;

• $6,500 for a boundary survey at the city’s reservoir, eliminating all funding;

• $5,000 in funding for an outside fiscal audit, eliminating all funding;

• $1,000 in funding for the Harlow Gallery, reducing the line to $3,000;

• $2,500 in funding for the Maine Luthiers Exhibition & Music Showcase, eliminating all funding; and

• $1,000 in funding for AARP, eliminating all funding.

Rudy said in his memo that the city has maintained a flat property tax rate for as long as possible, but there now has “pressing needs for infrastructure projects, vehicle replacements and capital improvements that have been deferred, at least in part” as a consequence of those historic flat tax rates. He said those projects and capital improvements, coupled with rising operating costs, salaries and “other factors” are driving costs up.

Councilor Diano Circo expressed his support for buying a fire vehicle, keeping salary adjustments for the city’s Police Department and leaving the assistant clerk’s position in the budget.

Aucoin said she was uncomfortable with holding a second reading because of uncertainty about the revenue budget and the fact that she had not had enough time to go through the expense budget line by line. She expressed some concern with multiple smaller line items, but Mayor Mark Walker urged her to talk through those at the Finance Committee level before the next reading.

Dufour urged residents to give the council some time and patience as it attempts to address important expenditures that, she said, are important.

“It’s not like we want a brand-new Parks and (Recreation) Department,” she said. “We want to install culverts (and) we want to do incredibly important things that cost money. We need to finally take a stance and take care of the municipal side of the budget. I don’t think there’s anything in the budget … that is not important.”

At the end of the meeting, Dufour said the Finance Committee will work on the numbers ahead of their July meeting so “the council will be more comfortable” with figures presented.

According to a draft budget, municipal revenue is estimated at $1,110,187, spurred by an estimated increase in state revenue sharing funding. This is a 9.5% increase from last year’s revenue of $1,013,895 which was bolstered by $225,000 in carry-forward funds. The city is estimating to collect $5,433,744 in property taxes next fiscal year, a 9.4% increase from last year’s collection of $4,882,216.  Next fiscal year’s revenue budget shows $50,000 in carry-over funding, but Rudy’s memo said the number “may increase in the final budget.”

Despite being up for cuts in the municipal spending plan, some items are being funded by grants. Rudy said Vision Hallowell, a nonprofit supporting the city’s downtown, received a $10,000 grant from the Maine Office of Tourism to promote the Luthier’s Festival and the Hallowell Fire Department received a $10,000 grant from the Stephen and Tabitha King Foundation to buy an extrication tool. These grants are subject to City Council approval.

The council is scheduled to meet again July 8.

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