DEXTER – The Town Council over the next few weeks will review a proposed budget for July 1, 2004, to June 30, 2005, that reflects a decrease in municipal spending of about $65,000.

The reduction came at the expense of planned major equipment purchases and by delaying some capital improvement programs, according to Town Manager Robert Simpson.

It was a precautionary step taken by Simpson in the event the tax cap initiative proposed by Carol Palesky is approved by Maine residents.

“In the event the 10 mil property tax cap is instituted, the town may be forced to liquidate many of our existing assets in order to fund a dramatically downsized municipal operation in fiscal year 2006,” Simpson noted in his budget package provided to the Town Council this week.

Although the proposed budget has an actual reduction in expenditures of $65,000, the town also has a shortfall of about $400,000 in expenditures, Simpson explained Thursday.

The Town Council has taken $150,000 to $200,000 annually from the general fund to offset rising costs and declining revenues in past years.

Simpson is discouraging that move for the new budget because of worries that the town could have a cash flow problem.

He said significant stress has been placed on the general fund, and for the first time in a number of years, the town may have to obtain a tax anticipation note to sustain operations through the first quarter of the 2004-05 year.

The proposed budget includes funds for maintenance and possible reconstruction of the Wassookeag Dam. At a recent meeting between the council and utility district trustees, the council agreed to commit $10,000 this year for engineering and for renovations at the dam. The utility district would continue to manage the water level.

Also on Thursday, the council voted to place two tax-acquired properties out to bid: a 1-acre unimproved lot at No. 6 Post Lane valued at $3,000, and 1.65 acres on Route 7 valued at $18,000.

Councilors also voted to amend the town’s ordinance to increase fees for dog complaints.