HALLOWELL — The Hallowell City Council reviewed details of a proposed $6.5 million spending plan Monday ahead of a special meeting expected later this month.

According to a draft budget circulated before the meeting, the spending plan totals $6,506,704, which is up $210,685, or 3.35%, from the budget approved last year.

City Manager Nate Rudy said a proposed special meeting of the City Council could take place Aug. 24, where the third and final reading of the budget would take place.

A public hearing of the expenditure and revenue budgets was held Monday night.

Two tax increment financing (TIF) funding offsets were accepted by City Councilors on Monday: $86,960 for fiscal year 2020, the previous budget year that ended on the last day of June, and $92,030 for the fiscal year 2021, the current budget year that began in July.

That draft budget shows $3,211,817 for the city’s local share of the Regional School Unit 2 budget, a 4.88% increase from last year.

That leaves $3,017,788 for municipal spending and TIF payments.

City Councilor George Lapointe speaks during a Monday meeting of the City Council. Kennebec Journal image by Sam Shepherd

An initial draft of the budget showed $356,060 in possible capital improvement expenditures, up from $136,000 last year. In the second reading draft of the budget, that number was cut to $94,060. The latest draft shows $111,060, which injects $17,000 for a study for a potential new locations for the Public Works Department garage.

City Councilor George Lapointe said that study would assess the feasibility of a location at 21 Pinnacle Drive, off Central Street.

The property is owned by Central Hallowell LLC, based in Farmingdale, and has an asking price of $199,000.

The budget has gone through many changes since it was revealed in May. In June, councilors said the budget would have to wait until at least July, due to uncertainty with state revenues.

State Treasurer Henry Beck wrote in an op-ed in March that “municipalities should begin planning for a decrease in revenue sharing receipts immediately.”

Municipal revenue in Hallowell is set at $1,094,175, an increase to last year’s budgeted municipal revenue of $1,006,315.

Excise tax is anticipated to decrease by 15%, from $425,000 to $361,250. State payments to the city are down 14.8%, with decreases expected in homestead exemption, state revenue sharing and other reimbursements.

According to documents shared with the budget, there could be a slight increase to the city’s property tax rate. The proposed rate is $21.50 per $1,000 of assessed valuation, up 20 cents from the current rate.

Councilor Maureen AuCoin said an average taxpayer, who has a property value of $184,000, would see an increase in annual property taxes of about $37.

City Councilor Maureen AuCoin speaks during a Monday meeting of the City Council. Kennebec Journal image by Sam Shepherd

AuCoin suggested looking closer into numbers on the revenue side of the budget. By her estimate, she said, the city is about $4,000 away from being able to reduce the property tax rate by 10 cents.

The budget proposed for the Police Department is $345,992, a decrease of 3.14% from last year. That decrease is largely attributed to a $7,645 decrease in the police chief’s salary.

A new contingency budget shows $60,000 in expenditures, which is broken into three areas: $20,000 in contingency funding, $10,000 in COVID-19 expenses and $30,000 in matching grant from the Federal Emergency Management Agency.

Another expenditure shows the city’s contribution to the Hubbard Free Library, which sits at $42,000 in the final budget, down from $68,040 in an initial draft.

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