Belfast budget plan includes tax rate hike

BELFAST — The City Council has set its final spending totals for the coming year at $5.4 million.

A public hearing on the proposed municipal budget will be at 7 p.m. Thursday, June 24, at the boathouse on Steamboat Landing.

After deducting projected revenues, the net amount to be raised by property taxes is $2,735,784, a figure $63,727 lower than last year’s budget. Despite that reduction, the tax rate is expected to increase $1 because of spending increases on the school and county levels.

“I’m comfortable with the budget. It positions us reasonably for the future,” City Manager Terry St. Peter said Tuesday. “You never want a tax increase but I think it’s a modest increase.”

The city’s portion of the SAD 34 budget is projected to be $3,996,140. That represents an increase of 11 percent, or $395,977, more than last year’s $3.6 million school budget cost. The city’s portion of the Waldo County budget is $360,294, an increase of 6 percent, or $24,742, more than last year’s county tax.

If the municipal budget is adopted as proposed and added to the school and county commitments, the total package works out to $6,901,502, a property tax levy of about $1,060 for every man, woman and child in the city.

The budget will result in a projected increase in the city’s tax rate from $17.90 per $1,000 in valuation to $18.90 when the tax bills are calculated and mailed in August. It means owners of a home valued at $125,000 who paid $2,237 in taxes last year will be assessed a bill of $2,362 for the 1999-2000 budget year.

The final budget proposal poses a sharp reduction from the $6.2 million originally proposed by St. Peter. Most of the cuts came from the capital improvement budget, which the council pared from an initial figure of $1.2 million to $460,000.

Big-ticket items left in the capital account include: $225,000 for temporary repairs to and matching state funds for the Passagassawaukeag River footbridge; $80,000 for renovations to buildings at Harbor Park; $25,000 for heating system and bathroom improvements to the boathouse at Steamboat Landing; $100,000 for renovations and handicapped access to City Hall; and $30,000 for a sidewalk at the Belfast Free Library.

Besides applying estimated revenues from fees such as excise taxes, licenses and building permits to the budget, the council agreed to tap the surplus fund for $500,000 to reduce this year’s tax commitment.

St. Peter emphasized the surplus funds were dedicated to onetime expenditures. Included in the group of accounts is $400,000 for capital items and $100,000 for an extra pay week. Because the city pays its employees every two weeks, an additional week’s pay is required every 14 years.

St. Peter estimated that once the $500,000 is taken from the surplus account, the city should have a balance of approximately $1.7 million left in its rainy day fund.

In providing a recent history of the surplus account, St. Peter noted that the city had $3.7 million in the account as of June 1998. Within the past year, however, the council appropriated $1.5 million from the account to pay the city’s commitment to the new Waldo County YMCA, to pay for renovations and expansion of Belfast Free Library, and to reduce taxes.

Those reductions will leave the city with about $2.2 million in surplus when it closes the books on the current fiscal year at the end of the month. The $500,000 committed to the 1999-2000 budget will reduce that total to $1.7 million July 1, the beginning of the next fiscal year.

The rapid decline of the city’s surplus will not pose any immediate problems, St. Peter said. He speculated the surplus could gain as much as $500,000 during the upcoming fiscal year. He attributed that increase to interest earnings on the existing surplus as well as departmental fiscal management policies.

“We are enjoying some good cash flow at this moment,” St. Peter said. “I’m comfortable. I haven’t been this comfortable in years.”