BREWER – Department heads are continuing to work on completing individual budget figures, but, as promised, it appears that the amount residents will pay at tax time will be smaller, Mayor Joseph Ferris said Friday.

“We worked really hard to make it happen, and it looks like it will happen,” he said during a phone interview. “We’re optimistic that there will be some considerable savings for taxpayers.”

The preliminary budget is expected to be approximately $10.24 million, which is an increase of 3.9 percent over last year’s $9.86 million, Brewer Finance Director Karen Fussell said Friday.

After initial budgets were submitted, each department head was asked to resubmit their budget with an additional 2 percent removed to create the tax relief, City Manager Steve Bost said Friday.

“There will be adjustments to departments throughout the city, but our intent is to retain the level of service and reduce tax bills,” he said.

“We’re confident that it will be a notable decrease,” Fussell said.

Those residents who qualify for the reworked Homestead Exemption program will get an even larger discount, she said.

“That’s between $100 and $200 for people who were eligible,” Fussell said. “That’s in addition to the reduction in the mill rate.”

Last year, the Homestead program gave homeowners a waiver for the first $7,000 in property value, which resulted in a tax break for residents who qualified, and the state fully funded the program and reimbursed communities for the reduction in property values.

Under LD 1, the Homestead amount increased to $13,000 of the property’s value, but the state reduced the amount it reimburses communities to $6,500. This is expected to cause an $80,000 decrease in revenues for Brewer, Fussell said.

The good news for residents is that several restrictions to the Homestead program were eliminated, resulting in an increase in participants. In Brewer, 2,050 homeowners, or approximately 70 percent of the city’s households, now qualify for the program.

About 700 residents will have their property values reassessed to align them with current market values, but the adjustments will be minimal so even those residents will see smaller tax bills, Fussell said.

“The tax bills are going to decrease, even if they have an adjustment,” she said.

City councilors will get the preliminary budget at their June 7 meeting and will “weigh in on it” at that point, Bost said.

The council will review both the city and school budgets and has to give final approval before the end of June.

The preliminary school budget is 5.2 percent more than last year, but the school also is getting additional state subsidy resulting in $776,000 less required from the city, school officials have said. The preliminary school budget figure for 2005-06 is $15,188,757.

“I think everybody wants to pay lower taxes,” Ferris said. “There certainly has been some skepticism [of the council’s promise to reduce taxes]. The school department takes some of the credit. They clearly have run a good ship.”

A portion of the city’s budget increase is a result of jumps in county taxes and projected increases in health insurance, liability insurance, gasoline and utility costs.

“Fuel costs are crazy,” Fussell said. “[Assistant City Manager] Howard [Kroll] has locked in fuel at $1.62 [a gallon], which is double what we paid two years ago. That’s outrageous.”