PORTLAND — City Manager Mark Rees on Monday presented a proposed $206.8 million budget that would raise property taxes 2.9 percent.
Rees told the City Council his proposed budget for fiscal 2013 embodies “sound fiscal management” and will help the city achieve long-term financial stability. Total expenditures are expected to increase 2.4 percent in the coming year from $201.9 million to $206.8 million.
A 2.9 percent hike in property taxes would lead to a $61.29 increase on the tax bill of a median-valued home of $227,000.
The budget, which includes no layoffs, does not utilize the city’s fund balance, as it did this year.
Mandated, fixed and non-department costs account for the majority of the increase, Rees said. Fixed costs include debt service on previously authorized borrowing and other contractual obligations, such as employee health insurance and retirement benefits.
Rees said a continuing trend the city must deal with is the increasing demand for assistance from people unable to pay for basic necessities. Allocations for general assistance are projected to increase by more than 20 percent, or $1.4 million.
The trend is due in part to an increase in the number of people seeking asylum in the United States, Rees said. The asylum process can take several years and, while applications are being considered, people are unable to work and are only eligible for general assistance for food and shelter.
Rees said this issue has become a priority for the city’s Health and Human Services Department, which is working with local, state and federal partners to develop a strategy to better help asylum seekers.
At the same time as the city is looking for ways to pay for the increased demand, the Legislature is considering reducing the funding formula to the state-mandated general assistance program, Rees said. If the reduction goes forward, the city will be forced to compensate for as much as $2.25 million in lost reimbursement.
“Without question a loss of this magnitude would have both a devastating impact on the city’s finances as well as on the services provides to these valuable populations,” Rees said.
Rees included in his budget a number of initiatives he said support innovation and achieve sustainability goals. Those initiatives include creating a Management Information Technology Department that will, in part, review opportunities to integrate city and school IT departments.
Also proposed is the creation of an internal working group to coordinate and prioritize transportation needs and initiatives for the city. Rees proposed making the bicycle and pedestrian coordinator a permanent position. The position previously was funded by a Communities Putting Prevention to Work grant.
Rees also proposed an examination of Fire Department resources – the first since 1983 – and an operations analysis of Riverside Golf Course.
The budget also includes a proposed management restructuring Rees said is intended to clarify lines of authority and enhance accountability within all city operations. Rather than fill a vacant assistant city manager position, he proposed the creation of a deputy city manager and director of recreation and facilities management. The change would also eliminate the second assistant city manager position.
Also included in the budget is a proposal to spend $30,000 to redesign the city’s website for the first time in 10 years.
For the first time in almost a century, the budget process included input from a popularly elected mayor, Michael Brennan.
“I think this is a budget we will be able to stand behind. … I think the budget does reflect the values of the community,” Brennan said.
The council unanimously received the budget proposal and referred it to the Finance Committee for consideration. Councilor John Anton, chairman of the Finance Committee, said in-depth budget reviews will be held each Tuesday and Thursday until an April 25 public hearing and vote.