BANGOR, Maine — The City Council on Wednesday began work on a preliminary budget that projects a property tax rate increase of 50 cents including city, schools and county expenses.
City Finance Director Debbie Cyr told the council she does not anticipate getting final revenue numbers from the state until late May or June, which makes the final budget subject to change.
“I would urge caution for all,” she told the council. “This is very early in the process.”
Overall, the budget projects a 2.7 percent increase in city expenses from $48.78 million to $50.09 million.
City Manager Cathy Conlow said the increase was primarily driven by contractually obligated pay increases for unionized employees, higher health insurance premiums and increased utility expenses.
The budget projects wage adjustments of $418,760 including a 1 percent increase for nonunionized employees and those in the 13 distinct bargaining units that represent city employees.
Conlow said it does not include any service reductions or additions, though the council will be presented with opportunities to change the budget and make reductions during budget workshops.
In all, city departments requested $9.8 million for new programs and capital items, not all of which are recommended in the budget.
Those that are recommended include $750,000 to replace two city buses as well as at least $100,000 to refurbish some older buses. They also include an $850,000 bond issue for street improvements and $100,000 in operating funds for sidewalk improvements.
The budget recommends $5.44 million in sewer system capital upgrades as the city continues to grapple with aging sewer infrastructure and a pending consent decree from the U.S. Environmental Protection Agency to improve the system. That would be paid for with operating funds and a $4.25 million bond issue. Conlow wrote in her budget summary that the city will not seek a sewer rate increase.
Combined with the school budget approved by the school committee last week, total expenses are projected to climb 2.3 percent from $92.11 million to $94.24 million.
That translates to a projected mill rate increase of 38 cents for the city, 11 cents for the school system and 1 cent for Penobscot County and a total mill rate of $22.30 compared with the current rate of $21.80.
“I know that’s not where everyone wants to be, but if you remember last, it was $1.50 [increase],” she told the council during a budget presentation Monday. “So we’re feeling a little better at the starting point this year.”
Cyr said the 15 cent increase projected previously by the school system is less in the city’s budget because an anticipated increase in assessed property values would bring in more revenue, mitigating some of the school rate increase.
The total tax levy is projected to climb 2.7 percent from $53.42 million to $54.87 with non-tax revenue projected to climb 1.7 percent from $42.13 million to $42.84 million.
Conlow said she still isn’t certain about total city revenues and that talk of welfare reform in Augusta that could increase city expenses are “the real wild card.” Overall, she said she does not anticipate the final tax increase will be 50 cents.
“We anticipate there is potentially more revenues coming before this final budget is settled,” she said Monday.
Additionally, Superintendent Betsy Webb said last week there could be additional state revenues for schools that were not included in their budget proposal.
The Legislature’s Education Committee, she said, has voted unanimously to put more money into General Purpose Aid for schools, but lawmakers have not agreed upon the amount.
In keeping with the governor’s budget proposal, the city budget assumes general assistance revenue will remain unchanged in the coming year, Conlow said.
The council made it its first cut to the budget during Wednesday’s session, agreeing not to put the city’s heavy-vessel dock in the Penobscot River this year. That will save $10,000 plus staff time of a crew of eight working for four days.
Parks and Recreation Director Tracy Willette said American Cruise Lines, which previously used the dock, has not visited Bangor in at least three years. The dock is too big for most other vessels, he said.
The council discussed selling the dock, trading it for smaller docks or leasing it to another city, but it did not come to a conclusion.
Follow Evan Belanger on Twitter at @evanbelanger.