LEWISTON – The City Council and city staff will be looking for ways to revise the proposed municipal budget in the coming weeks and reduce the tax burden on residents for the upcoming fiscal year.
“I think it’s a starting point, looking at the base budget, and then it gives the council the opportunity to go through (and) make adjustments,” City Administrator Heather Hunter said Friday.
“At the same time, staff goes through and revises estimates,” including estimates for revenues, state revenue-sharing and other items, such as fuel costs.
As the budget stands, city expenses are slated to increase by 13% and school expenses by 7%, representing a 9% overall increase. The city is proposing using $6.6 million from its unassigned fund balance to address certain capital and one-time needs, including a few capital improvement projects. The School Department is also proposing to use about $5.1 million of their unassigned fund balance.
The initial proposed tax rate is $34.46 per $1,000 of assessed property value, a 21% increase over the current tax rate.
But again, Hunter said, this is only the starting point.
“First of all, I would offer that this isn’t the first time the city has been in a situation like this,” she said.
When budget season kicked off last year, Hunter’s initial budget proposal would have raised the tax rate by 14.5%, to $32.35 per $1,000 of assessed property value. But by May, the tax rate in the council-approved budget was reduced to $29.51 thanks to revisions. It was further reduced and finalized at $28.50 in July following the annual property valuation review.
“As we work through the process and (council and staff) see the individual cost drivers at each department as we go through the various initial workshops, then they start formulating where they want to kind of do a deeper dive,” she said. “And at the same time, we get better numbers to be able to revise that budget.”
The City Council met for the first-of-many budget workshops Thursday evening.
Hunter said this will be a “multi-pronged approach” between looking at reductions in line-item expenses and offsetting capital and one-time expenses with fund balance funding.
The city has a “healthy surplus right now” that provides some “wiggle room,” she said. Per city policy, however, the fund balance can only be used toward capital or one-time expenses and not for any operating expenses.
Labor, utilities and gasoline are the major cost drivers, Hunter said.
Personnel services and fringe benefits, which include regular and overtime wages and retirement benefits, are estimated to increase by 14% for a total of $34.8 million.
Supplies and materials are estimated to increase by nearly 26%, driven largely by gas prices and winter sand and salt costs. Contractual services are estimated to cost about $1.3 million, a 20% increase from this fiscal year. That includes about $230,000 for software maintenance and licensing and $177,000 for citywide utilities.
“Our organization isn’t any different than any household in Lewiston, it isn’t any different than any business in Lewiston,” she said. “We just want to make sure we are good stewards with the taxpayers’ money and being as efficient and effective with that money as possible.”
Mayor Carl Sheline said Friday “it’s clear that we have a lot of work to do” on the budget.
“Like many businesses across Lewiston, the city is battling higher labor and utility costs. We need to be creative to craft a budget that continues to deliver services that our community requires and expects, while doing our utmost to control expenditures,” he said.
Sheline added that the budget process has just begun, and he encouraged the public to get involved.
The City Council and School Committee are holding a joint budget workshop at 5:30 p.m. Monday at The Green Ladle.
The council is slated to hold a budget workshop at 5:30 p.m. Tuesday ahead of the 7 p.m. council meeting.
There are two more council budget workshops: Thursday, March 23, and Tuesday, March 28, at 6 p.m. at City Hall. They will be broadcast live on Great Falls TV and livestreamed at lewistonmaine.gov/YouTube.
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