DEXTER – The Town Council has adopted a tax rate of $21.70 per $1,000 valuation.

The new rate, which reflects a $1 increase, allows the town to have an overlay, or surplus, of $58,260, one of the largest amounts in recent years, according to Town Manager Robert Simpson.

The increase in overlay was driven by several concerns, including Gov. John Baldacci’s plan to eliminate the Homestead exemption, the fact that the town has budgeted so closely in past years, the uncertainty over possible abatement requests from Dexter Shoe and Fayscott because of the downturn in manufacturing, and the uncertainty over the governor’s tax plan, Simpson said.

The trend to push revenue projections to the maximum in the past few years to minimize the property tax burden has resulted in a decreased cash flow into the General Fund each year, the town manager said.

“That results in liquidity issues over the long term and our ability to operate without significant borrowing in anticipation of tax revenues,” he explained.

The council decided Thursday that cost-of-living increases would be addressed as part of the bargaining process for those municipal employees who are members of American Federation of State, County and Municipal Employees Council 93. Edward Willey, Maine AFSCME coordinator, had requested in writing that the union members receive the same cost-of-living benefits that were provided to nonunion workers this year. Council members noted that in May, shortly after the union vote, Willey advised town officials via letter that until negotiations resulting in changes to working conditions were ratified by the parties, no changes in benefits, work rules or conditions of employment should be initiated.

When increases were provided to nonunion members in July, Willey fired off a second letter, asking that union members be treated in similar fashion.

As it did in July, the council decided to withhold any cost-of-living increase for bargaining unit employees until negotiations as requested by Willey in his earlier letter were completed.

In other action, the council:

. Agreed to hold a public hearing next month on a proposed amendment to create a junior firefighter program.

Fire Chief Melvin Wyman hopes such a program would foster interest among local youths to become firefighters as adults.

Only people between the ages of 16 and 18 would be eligible to participate in the training. When a participant turns 18, he or she could then formally apply to become an active member of the department.

. Agreed to hold a public hearing that will center on the disposition of Beach Street property.

The town assumed ownership of a property at 12 Beach St., and it has been recommended that the property be conveyed to the Dexter Development Corp. for the purchase of management, marketing and resale. The corporation would use the proceeds from the sale of the property to help finance its initiative to buy the Fossa Building on Main Street, according to Simpson.

With the purchase of the Fossa Building, the corporation intends to renovate it and market it as a prime business location in an effort to generate jobs and promote Main Street development.