SOUTH PORTLAND — A public hearing on the proposed budget for next year is scheduled for Wednesday, April 8, at 7 p.m. in Council Chambers at City Hall, 25 Cottage Road.
City Manager Jim Gailey has proposed a $80.28 million budget for fiscal 2010, which starts July 1. The budget, which includes school spending, represents a decline of $236,000, or 0.29 percent, from the current budget of $80.5 million.
Nearly $70.3 million of the budget is locally supported, including more than $29.7 million in municipal spending, a decrease of $112,000 from the current level.
Although overall spending has decreased, the proposed budget is expected to increase the local tax rate 3.5 percent, or 47 cents per $1,000 of valuation. For owners of a median-priced single-family home valued at about $230,000, there would be a nearly $100 annual boost in taxes.
About $40.5 million of the city’s total operating budget represents school spending, a $585,900 increase over the current budget. More than $39 million represents municipal spending, which includes grant and enterprise spending.
The school budget is expected to increase the current property tax rate of $9.16 by 31 cents, while the municipal portion will increase the rate by 16 cents.
This is Gailey’s first budget in his official capacity as full-time city manager. He prepared the two previous budgets as acting city manager. Gailey said this year’s budget was the most difficult of the three.
“The economic times have presented a number of challenges and created a perfect storm in municipal budget preparation,” Gailey said in his budget summary. “As I stated last year, South Portland does not have a cushion to weather this storm.”
In December, the City Council directed Gailey and Superintendent of Schools Suzanne Godin to draft budgets that would not increase the local tax rate by more than 3.5 percent, even though state law allows a 3.91 percent tax increase.
Meanwhile, non-property tax revenues next year are expected to decrease nearly $700,000, or 6.34 percent, creating a greater reliance on local tax revenues. Also, businesses are closing and more people are losing their jobs, which has increased the number of people seeking tax abatements.
Gailey said department heads were directed to decrease their current budgets by 5 percent, an order that sent many examining their personnel ranks, which account for about 67 percent of all city spending.
Gailey noted that a retirement incentive offered in February, and taken by six employees, is expected to save the city $138,000 next year. Another five employees were laid off late last month, a move expected to cut another $283,000 in costs.
“There were no good or right choices, just different choices,” Gailey wrote about the layoffs, the first in the city since 1991. “No matter which ones I made, I recognized I was going to be second-guessed and criticized.”
Residents have spoken out against the layoffs at recent council meetings, particularly the firings of Recreation Department Operations Supervisor Deb Smith, a city employee for 28 years, and young adult librarian Reta Nappi, an employee for the last 20 years.
An effort is underway to pressure the City Council to reinstate the employees, even though the City Charter prohibits the council from interfering with the hiring and firing of city personnel. Some members of public are planning a public demonstration ahead of the April 6 council meeting. They have also started a letter-writing campaign.
Mayor Tom Blake said that the only way to reinstate the positions is to increase the budget. “I don’t see that happening,” he said.
Meanwhile, the proposed budget includes pay increases for union and nonunion personnel. Even with the five layoffs and six voluntary retirements, the personnel budget, which includes salaries, wages, overtime and insurance, is $115,000 higher than the current level.
Gailey previously said that pay freezes would not be considered unless absolutely necessary.
Randy Billings can be reached at 781-3661 ext. 100 or firstname.lastname@example.org.