HALLOWELL — Faced with rising costs and unanticipated expenses, the city passed a budget that minimized the tax impact as much as possible while retaining city services.

The result is a $7,141,576 budget, roughly $500,000 over the previous year’s $6.6 million budget. The mill rate is estimated to be 22.20, meaning that property owners must pay $22.20 in taxes per $1,000 of assessed valuation. That’s up by 90 cents, or 4.2% from the fiscal year that ended June 30.

For a Hallowell home with a median value of $329,900, this year’s increase would result in an additional $296.91 in property taxes.

City councilors unanimously approved the budget at their Monday meeting.

And while the spending plan did increase, it is much lower than it could have been. Back in May, the finance committee had estimated the city would be facing a budget with a tax rate of $24.60 per $1,000 of assessed valuation, which would have been a 15.5% increase.

Finance Committee Chair Maureen AuCoin clarified during Monday’s council meeting that the $22.20 tax rate was an estimate.


“We don’t have the exact valuation numbers yet from the assessors,” she said. “We’ve never moved forward without those, so this is still an estimate.”

She said the estimated 22.20 mill rate is her calculation, and that it did not come from city staff or the assessor, but it is based on estimates from assessors.

“It’s possible that it will come in different,” she said. “Admittedly, I’m a little uncomfortable moving forward without having the concrete valuation numbers, but I jumped on board with this because we are trying hard to get this done on time rather than waiting, and I feel comfortable enough with the estimates that it shouldn’t be a huge impact one way or the other.”

In recent years, the city had approved the budget in August. Mayor George Lapointe said in May that they were aiming to finalize this budget by the end of June, before the start of the next fiscal year, but that they could have the previous budget numbers carry forward until the new budget was approved if more time was needed.

At Monday’s meeting, councilors set tax due dates of Sept. 1, 2022, and March 1, 2023, with interest beginning to accrue on Sept. 15, 2022, and March 2, 2023. They also set the interest rate for delinquent taxes to 4%, and 3% for overpayment of taxes.

The majority of the budget increase this year is a result of a $239,000 tax abatement the city must pay to Granite Hill Estates, an apartment and assisted living complex at 60 Balsam Drive.


City Manager Gary Lamb said that when the complex put an addition in 2010, the city had a commercial appraiser, who helps municipal assessors who are not as versed in large commercial projects, assess the complex. At that time the commercial appraiser assessed the property at $18 million.

But when MaineGeneral Health sold the property to Northbridge Companies in 2019, the new owner requested a reassessment. The matter went to court in 2021, and a professional mediator and lawyer reached an agreement to reduce the value from $18 million to $12 million.

Lamb said the city also gained about $3 million in assessed value this year, cushioning the blow of the $6 million reduction to a net loss of $3 million.

According to a July 7 memo from the finance committee included in the packet for Monday’s meeting, Lamb was able to negotiate splitting the abatement into two $122,703 payments, one in the 2023 fiscal year and the second on the following year.

The city is also applying $289,283 from the undesignated surplus fund as revenue to offset increases, which the finance committee said will still fall within the required 10%-15% of annual expenditures.

The city was also able to use the downtown TIF district to offset increases, and the finance committee said numerous expenses were moved out of general expenditures and into the TIF expenditure account to offset a larger property tax increase.


The budget also no longer includes full funding for a new police cruiser, which the city will likely request funding for next year.

Recently, the city received an additional $125,882 in American Rescue Plan Act funds, however none of this will be applied to the budget and will instead be available throughout the year if necessary.

And while savings and revenues were applied to offset the increase, the city was also able to include a 12% pay increase to all full-time employees, maintain the same level of funding for the Hubbard Free Library and keep the road maintenance fund at $125,000 for the second year in a row.

The pay increases come after the city approved a new union contract in June for a 12% increase. Lamb said last month that while city officials had previously considered this to be too steep an increase, they recently decided that it was worthwhile to pursue the 12% when considering the current economy.

“When you make retention and recruitment a priority and have around 8% inflation,” Lamb said, “and last year’s (cost-of-living adjustment) being only 2%, the majority of the council wanted to invest in our staff and their families.

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