HALLOWELL — The City Council has approved a new budget on an initial vote, but variables mean the local tax increase could range from 1.4 percent to 3.5 percent.

City officials still don’t know how much Hallowell’s property valuation will increase or whether Farmingdale voters will join Hallowell councilors in approving a gift to Regional School District 2 to maintain certain programs at Hall-Dale schools.

Despite those unknowns, councilors voted 5-0 this week on the first reading of the 2012-13 budget, putting it on track for final approval in July. Councilors Pete Schumacher and Steve Vellani were absent.

The amount assessed to Hallowell taxpayers for municipal expenses is projected at $2.2 million, an increase of $73,834, or 3.4 percent.

That includes $75,138 councilors previously approved giving to RSU 2 to keep foreign language instruction at Hall-Dale Elementary and a half-time nursing position at one of the Hall-Dale schools.

The gift is conditional on Farmingdale voters approving their town’s share of the costs at Town Meeting on June 23.

Hallowell City Manager Michael Starn’s recommendations for keeping the municipal budget in check included once again delaying buying some items that were already cut from this year’s budget, such as a fire vehicle and voting machines, which saves $46,000.

Other reductions include $25,000 in staffing, $13,701 in community services and $1,000 that would be saved by eliminating either the fall or the spring bulky waste cleanup, which Starn acknowledged could cause inconvenience.

Starn advocated keeping Hallowell’s surplus at 14 percent of city operating expenses that need to be paid through taxes, but councilors said they wanted to draw down the fund by an additional 1 percent — equivalent to $44,645 — to reduce taxes.

The state mandates that municipalities maintain a 10 percent surplus, but Starn said he prefers it to be higher to give the city flexibility on unexpected expenses.

City officials are considering, for example, whether to commission a feasibility study of reconstruction work on Water Street, and Starn said City Hall needs about $10,000 of painting and other work.

Councilors said they feel comfortable with a 13 percent surplus.

Councilor Lisa Harvey-McPherson said she approved of using surplus funds to reduce next year’s taxes because Starn and the budget committee made cuts first.

“The surplus is the people’s money; they’ve already paid that, that needs to be part of the contribution,” Harvey-McPherson said. “I felt confident that there was serious engagement in driving out costs for the city.”

The council also approved a request from Old Hallowell Day Chairwoman Jane Orbeton to add $1,000 to the budget for half the cost of installing two spigots in Waterfront Park to provide water to vendors during the annual festival. The vendors have been hooking up to a fire hydrant.

The Old Hallowell Day committee will pay the other half of the cost from its savings, Orbeton said.

Water District Superintendent Dennis Kinney said the project was planned and the pipe for it bought several years ago. He said it’s possible to have the work finished in time for Old Hallowell Day on July 21.

Also at this week’s council meeting, Mayor Charlotte Warren appointed Starn, Harvey-McPherson, Councilor Ed Cervone, Councilor Mark Walker, Fire Chief Mike Grant and Row House President Sandy Stubbs to the Hallowell Fire Department Strategic Plan Implementation Committee. There are two additional spots on the committee.

Susan McMillan — 621-5645

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