Proposed $67.5 million Augusta budget includes small tax increase, 8 furlough days

AUGUSTA — Taxes would increase slightly under the proposed $67.5 million city and school budget for next year. and the city would be closed — and most city workers would go unpaid — on eight furlough days

Despite the budget as proposed, including a 1.43% tax increase, officials are hopeful that cutting about $465,000 in school funding could eliminate that potential tax hike and keep taxes at the current rate of $20.97 per $1,000 of assessed value.

The proposed budget includes plans to lay off the assistant director at Lithgow Public Library and one of the city’s three code enforcement officers, and to leave several vacant municipal positions unfilled.

It also includes eight furlough days for most city employees as officials look to cut costs and prepare for financial challenges that could come out of the coronavirus pandemic.

The city has already announced plans — likely temporary — to lay off 32 employees in response to measures taken related to COVID-19. Most of those employees work for city operations not open to the public because of the coronavirus, including the Augusta Civic Center, Lithgow Public Library and the child care program at Buker Community Center.

“I have never experienced the type of challenges that the current medical and financial crises present,” City Manager William Bridgeo, who has been involved in preparing municipal budgets for 44 years, said of the budget proposal he submitted to city councilors late Friday.

“The unreliability of our revenue projections and the unpredictability of our service demands in public safety, general assistance and other cost centers compound things. The good news, such as it is, is that (current and past City Councils) have been fiscally prudent and responsible, and as a consequence, we have solid reserves. My hope is that they are sufficient to allow us to continue to adequately fund essential programs and services for the next couple of years, while the medical crisis abates and the economy recovers.”

The city would tap into those reserve funds to help balance the budget, taking $1.7 million from a reserve account of about $7.2 million, which Bridgeo said would leave enough in the account to comply with the city charter’s provisions that recommend the city keep an amount of at least 8.3% of the current budget in reserve for use in case of emergencies and other unplanned expenditures. The fund is currently about 11% of the city budget.

The furlough days for city employees would not include uniformed public safety officers, who would continue to work and be paid those eight days.

Bridgeo said the furloughs would save about $214,000.

Mayor David Rollins said the furlough days seem like a reasonable way for the city to save money it may need to deal with unforeseen coronavirus impacts.

“I fear this may only be a start, there are so many unanswered questions, so much is unknown,” Rollins said Sunday of the financial impact of the pandemic. “We’d love to project nothing but optimism, but the truth is nobody knows. So we’re being fiscally responsible. Furloughs are just wise money management. If I were the employee, I’d rather have a furlough day than lose my job.”

Rollins and Bridgeo said the goal this year was to propose a budget that would not further burden taxpayers, some of whom might be struggling financially because of the pandemic, with a tax increase.

But as proposed the budget would require $465,000 more from taxpayers, a 1.43% increase.

The municipal side of the budget would require $198,000 less from taxpayers, but the school side would require $465,000 more.

Bridgeo said he had spoken recently with School Superintendent James Anastasio, who told him he was comfortable recommending the school board amend its budget request to cut the $465,000 more it would require from taxpayers.

The tax bill for the owner of the average home, assessed at $127,400 in Augusta, would be $2,231 with the budget as currently proposed, or $2,200, the same as this year, if the budget were cut by the proposed $465,000.

Expenses in the budget are $2.3 million, or 3.5%, more than current spending.

Total revenues are projected to increase by about $1.8 million, but Bridgeo noted it is difficult to estimate the state aid the city will receive because the state is also facing a budget crisis due to the coronavirus pandemic.

Staff cuts in the budget include the library’s assistant director, who also is the adult services librarian; the least senior of the city’s three code enforcement officers; and plans to leave vacation positions, including a police officer’s position and a clerk’s position in the city clerk’s office, and several part-time positions, unfilled. Those cuts are expected to save about $352,000.

The city’s share of the Kennebec County tax is projected to increase by $198,000, or 12.3%, to $1.8 million. Bridgeo said the increase is largely due to the state’s paying less for county jail operations and reducing State Police coverage of the county, prompting the county to hire more patrol deputies.

In past years, the city has been able to generate as much as $880,000 in interest income on invested funds but, with the huge drop in interest rates and reduction of the city’s reserve funds, officials project the city will earn only $209,000 in the coming year, a $420,000, or 67%, drop from this year.

Revenues from emergency medical services are projected to drop by about $200,000, mostly because city ambulance calls are down since fewer people are traveling and, thus, getting into fewer accidents.