SOUTH PORTLAND — A majority of city councilors on Monday said they would be open to at least a 2.5 percent increase in the upcoming municipal budget.
Their directive to the city manager stands in stark contrast to budget guidance provided several weeks ago to the School Board, which was told to hold the line on school spending.
The municipal budget directive came after City Manager Jim Gailey said fixed costs, such as utilities and insurance costs, would increase by more than $275,000, or 1.67 percent.
“After three years, we have nowhere to go,” Gailey said. “We do not have the ability to make major cuts in this budget without losing major programming, without closing buildings, closing facilities.”
Gailey said he will meet with department heads over the next few days to discuss specific budget proposals.
But Gailey said officials have already said it will be “very tough” to produce a flat budget, since maintenance and equipment cost increases must be included, leaving mostly personnel cuts to fund savings.
“It’s the little things that are killing us,” Fire Chief Kevin Guimond said of a variety of deferred maintenance issues.
Gailey also recommended the city include a 1 percent cost-of-living increase, or $124,000, as a starting point for upcoming negotiations with a half a dozen of the city’s unions.
The COLA set-aside is in addition to about $15,000 in non-union step increases, Gailey said, as well as positions that were only partially funded in last year’s budget, including a police officer, firefighter and an employee relations manager.
Although city revenues seem to be recovering, Gailey said state revenue sharing is targeted for cuts in the Legislature.
Several councilors agreed with Councilor Tom Coward, who said he would support at least a 2.5 percent increase in the city’s budget. He said the city must maintain its infrastructure and invest in its employees.
“We’ve got to loosen the spigot here to maintain what we’ve got,” he said.
Councilor Patti Smith said it was appropriate for the council to consider a municipal budget increase, while advising against an increase in school spending.
“I don’t think it’s fair to view the city and school as the same, because clearly they are not,” said Smith, who also asked the manager to provide a no-increase budget scenario.
School Board Chairman Ralph Baxter on Wednesday said he wished the schools had received similar guidance, but stressed that the council previously indicated it would be open to a school budget increase, if necessary.
The board has scheduled a public hearing at 6 p.m. on Monday, Feb. 14, before discussing its budget priorities.
While Coward and Mayor Rosemarie De Angelis argued that passage of a school bond last November counts as a budget increase for the schools, Baxter said councilors indicated during last year’s campaign that the bond would not be used against the schools in budget talks.
“I know it was made very clear in many meetings and at many different levels that the budget increase for the high school bond would be set aside from the school budget,” Baxter said.
On Monday, Councilors Maxine Beecher and Tom Blake argued that many residents are still struggling and cannot afford a tax increase.
Beecher asked Gailey to justify increasing the municipal budget, which accounts for about 32 percent of city spending, while holding the line on school spending, which accounts for the remaining 68 percent.
“There is a direct link between every one of our services to the residents in this community,” Gailey said, noting public safety, public works, general assistance and public transportation. “That’s why we need to keep ourselves whole.”
Gailey provided the council with a spreadsheet comparing budgeted amounts to actual expenses over the last two years.
The city was able to avoid a deficit, he said, through spending freezes and eliminating professional development opportunities, which is forcing the city to fall behind.
Councilor Jim Hughes said a 2.5 percent increase in the municipal budget would result in an increase of about $23 for median homeowner.
“So, (it’s) not an enormous amount of money and (it’s) enough money where make a difference to our employees,” he said. “I personally could see it go a little higher.”
De Angelis noted that the city manager is working on a tax-relief proposal for the city’s elderly residents, and that the city should consider a budget increase to reward and retain talented staff.
“We can cut off our nose to spite our face if we stay too stingy for too long,” she said.
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