FREEPORT — The Town Council was presented with a proposed $9.3 million municipal budget Tuesday night.
Finance director Abbe Yacoben said the proposed fiscal year 2012 budget is up $42,000, or 0.45 percent, from this year, and does not include a property tax increase. The municipal tax rate would remain at $4.12 per $1,000 of assessed value.
Town Manager Dale Olmstead said the operating budget is a maintenance budget, but the rolling, five-year capital budget is more aggressive, with a total of $2.5 million, up about $2 million.
To add more programs to the operating budget – video on demand, public works equipment and seasonal help, new vehicles and equipment and staff in the police and fire departments, and funding for a technology librarian and the Port Teen Center – could add up to $800,000 more to the budget.
In previous years, the council has supported a more conservative capital budget, but Yacoben said this year the town could catch up.
In addition, Olmstead said the council could use about $2.66 million from surplus in an undesignated fund balance to help fund town projects. The council will decide if it wants to spend $2.3 million to help fund the 34-acre Hunter Road fields and trails project.
Another $150,000 could be used to help fund the development of a train station and the remaining $213,000 could be reserved for the fiscal 2013 operating budget, Olmstead said.
“The fields and trails project is $3.5 million, but we can’t get all the way there,” he said, with other funds from private fundraising.
Yacoben and Olmstead said the council may have to seek a modest tax increase within the next few years. They said decreasing revenues, increasing costs, limited new property growth and the use of excess fund balance will make it difficult to keep the tax rate flat for many more years.
“We were less conservative in our approach to budgeting this year,” Olmstead said. “When you spend down to policy, you take away the flexibility going forward.”
Olmstead also told the council that the town’s general obligation bond rating was upgraded from a AA to a AA-plus. Yacoben said the higher bond rating will provide the town with better interest rates, better access to borrowing and ultimately validates the town’s financial polices and procedures.
The council scheduled a public hearing for Tuesday, April 12, at 7:30 p.m. to hear comment on the proposal to spend $2.3 million to partially fund the proposed fields and trails project.
There will also be public budget sessions on April 14 at 7:30 a.m. and at 6 p.m. in Town Hall. The council will hold a public hearing on April 26 to discuss the operating and capital budgets for fiscal 2012.