CAPE ELIZABETH — While the Town Council is considering a municipal budget that would reduce the town portion of the tax rate by 2 cents, the School Committee is reviewing the first draft of a fiscal year 2019 school budget that would hike the school portion of the tax rate by $1.45, or 11.4 percent.
The first draft of the $25.7 million school budget for fiscal year 2019 is up 3.5 percent, or nearly $879,000 over this year, due to the loss of $875,000 in state subsidy – a 40 percent drop in revenue.
If passed, the combined municipal and school budget would increase the tax rate more than 7.9 percent, from $18 per $1,000 of real estate valuation to $19.43.
Also driving the school budget increase is an 8 percent increase for health insurance, which Business Manager Catherine Messmer said was one of the school department’s biggest costs.
The draft did not include engineering and architect fees for a $27 million renovation project, which is still under board consideration, nor does it include priority items requested by school administration, such as a learning strategist and a special education teacher at Pond Cove School and more ed tech and custodial and maintenance support throughout the district. Priority items would increase the budget by almost $608,000, adding another 36 cents to the tax rate.
The proposed budget, described by School Board Finance Committee Chairman John Voltz, as “flat,” has no staff increases or hikes in enrollment, which is projected to actually decrease by 0.4 percent. Voltz said the proposed budget primarily shows negotiated increases in salaries and benefits that are beyond the board’s control.
During a Feb. 27 workshop, Voltz said the draft was a “base budget” put out as a first public draft.
“We have a lot of work to do to wrap our heads around what that means,” he added.
The School Board Finance Committee continued discussing the draft during meetings on March 20 and had meetings scheduled for March 22 and March 27 before considering adopting a budget on April 10.
Town Manager Matt Sturgis has proposed a $12.3 million budget for fiscal year 2019 – a 0.9 percent increase from this year that is expected to reduce the tax rate by 2 cents, or 0.4 percent of the municipal portion.
This year’s town budget was just over $12.1 million, approximately $109,900 less than Sturgis’ proposed budget. The proposed increase in spending will be offset by a revenue increase of over $98,000, or 2 percent, from sources other than property tax, which is expected to increase by 0.2 percent.
“Residents have been buying newer motor vehicles and thus monthly collections have been improving,” Sturgis said. The budget projects about $5.2 million in excise taxes, up $55,000 from this year.
Personnel costs account for $6.3 million, or 49 percent, of the total proposed budget, including increasing fire and recycling facility personnel and a $310,000 increase in the town’s legal budget in anticipation of upcoming lawsuits over paper streets.
The budget also plans for significant capital purchases throughout the fiscal year, including a new ladder truck and ambulance, that fall in line with the town’s capital improvement plan.
The ladder truck and 15-year-old ambulance are expected to cost about $1.3 million and $250,000, respectively, to replace. Sturgis suggested they, as well as other large capital expenses, such as a dump/plow truck, be purchased through a five-year lease-purchase agreement. If this option is selected, about $324,000 would be put towards the ladder truck and ambulance next year.
The dump/plow truck would cost either $190,000 paid in full or about $41,000 per year with a five-year lease-purchase agreement.
“The ladder truck, ambulance, and dump/plow truck are all longer-life items that would be items that will outlast the financing arrangements, provide expense line predictability, and lessen the impact on taxpayers,” Sturgis said in his proposal.
Along with the dump/plow truck, the Public Works Department’s planned capital expenditures include the second phase of the Hill Way and Scott Dyer Road reconstruction project, budgeted at $680,000, which is expected to go out to bid in spring 2019.
Sturgis also factored in the possibility of purchasing pay-and-display parking units for Fort Williams Park for $50,000, if the council opts to do so.
According to the town website, the cost for parking units is used in the budget as a “marker.” The council is expected to consider parking fees at the park again during its April 9 meeting.
Offsetting these increases, Sturgis said, is the use of $500,000 from the unassigned fund balance toward capital improvements and continued use of $375,000 against annual operating expenses.
“This will lower the current amount of unassigned funds, but keep the overall level of unassigned funds properly in line with the current policy that the town has,” he said.
The Finance Committee scheduled two workshop sessions to review the budget proposal on March 20 and 21. During the Town Council’s regular meeting on Monday, April 9, there will be time during the public comment period for members of the public to share their thoughts on Sturgis’ proposal.