Proposed Waterville budget includes plans to create 7 positions to keep up with city’s development

WATERVILLE — The City Council on Tuesday got an overview of a proposed $46.6 million municipal and school budget for 2021-22 that represents a $2.2 million increase over the current budget.

But councilors noted that with revenues and tax increment financing funds, the tax rate would not change from the current $25.76 per $1,000 worth of property valuation.

City Manager Steve Daly presented the 79-page budget document which includes a budget summary and cost and revenue projections for the municipal side of the budget.

“This whole budget is put together on the premise that we want to stabilize the mill rate so the bottom line is that the mill rate does not change,” Daly said in the virtual budget meeting.

The budget, which Daly referred to as that of fiscal year 2022 — the prior administration referred to it as the proposed 2021-22 budget — would fund city operating costs and capital needs that have gone unaddressed for many years in the city. Waterville is experiencing a lot of growth and development which requires additional staff, and the budget provides for that new staff, Daly said. TIF money, he said, is available to fund a variety of projects, including those related to economic development and infrastructure.

One of the things that has been talked about consistently is the need to address roads and sidewalks in and around the downtown area, including in the city’s South End, according to Daly, who said TIF money makes that possible.

Seven positions are in the proposed budget, five of which are expected to be paid for with revenues from the departments in which they will work, he said. With all the new development taking place in the city, a full-time assistant code enforcement officer position is needed, as well as a plan reviewer-compliance inspector in the fire department, he said. Also in the proposed budget are three EMS technicians which would be self-funded, and depending on the level of permitting activity, the code enforcement and fire department reviewer positions would be self-funded, according to Daly.

“We just can’t keep up with it at this point,” Daly said of the need for help with permitting needs in code enforcement and the fire department.

The proposed budget also includes an assistant city manager position and a bookkeeper in the finance office. The finance office position would take tasks off the director’s desk and allow him to be a finance director, according to Daly. The assistant city manager position is one that has been talked about since Daly came on the job a few months ago, he said.

“It’s been mentioned to me by the council chair as well as the mayor,” he said. “I believe it’s a good and necessary addition to the city staff.”

He said former City Manager Michael Roy has been working part-time to help during the transition, including handling day-to-day work, which has allowed him (Daly) to focus on economic development and building relationships.

Daly also noted that some one-time costs are planned in the budget, including $187,000 for a 53rd payroll week to match the city’s 2021 pay day calendar, and $50,000 to update outdated city workforce job descriptions and nonunion pay ranges.

He and councilors talked at length about the city putting $250,000 annually into the street and road maintenance fund in the past. Daly said that will continue but not on a cash basis. It will be included within a planned $5 million bond, $4 million of which will be dedicated to street and sidewalk improvements, with the balance used for department equipment needs, he said.

By using the $5 million bond concept, he said, every two or three years, over 30 years, the city can issue another $5 million bond and get major projects done that have been needed for a long time. His budget document says most of the city’s debt is funded by TIF revenue and to get the most immediate advantage of long-term TIF income, the proposed budget includes the first-year costs of the $5 million bond. The city, it says, can sustain issuing periodic $5 million bonds for the life of the current TIFs without exceeding its current burden of $2.4 million in annual debt service.

Mayor Jay Coelho said it is important to be consistent on road work, which also shows residents in a visible way that their tax dollars are at work.

“This way, we can be proactive on our roads, instead of reactionary,” he said of the plan.

He said the city is $30 million behind in road projects that should have been done a long time ago and the city’s new plan sets it on a good path to address that.

“To be able to do it in 23 years, knowing that we’re $30 million behind, is pretty good,” he said.

Council Chairperson Erik Thomas, D-Ward 7, said interest rates currently are between 1% and 2%.

“Because interest rates are so low now, it certainly makes sense to take advantage of that,” he said.

Coelho noted that no federal COVID-19 money is reflected in the proposed budget, and it is not known yet how much the city will get.

“It could be significant,” he said. “It could be a million, a million and a half dollars.”

Councilor Claude Francke, D-Ward 6, asked how the city’s debt service stacks up with that of similar municipalities in Maine.

Daly had said the city’s current debt is $25 million to $26 million and the legal limit is $56.5 million.

“I think we’re in a much better position than most municipalities,” Coelho said.

Councilor Rebecca Green, D-Ward 4, asked if the budget could delineate what items would be paid for with TIF funds versus taxes, as that would be helpful, she said.

“I’m glad you asked that question, because we are working on that detailed analysis …” Daly said.