SACO — Residents may see their first property tax increase in four years to support the municipal budget for the year starting July 1.

City Administrator Rick Michaud has proposed a $20.6 million budget — not including the city’s contribution to Regional School Unit 23 — for 2011-12. He recommends that the city increase taxes by 4.3 percent and use $1.9 million from its undesignated fund balance to avert any layoffs of municipal employees.

He said the city can expect a decrease of $1 million in excise tax revenue and a $341,000 drop in revenue sharing from the state.

The City Council may decide to lay off some employees to avoid raising taxes.

“Laying off people is not easy to do, but certainly that is where the money is,” Councilor Jeff Christenbury said Tuesday. “We have to look at the whole picture here, and the taxpayer, if perhaps we have to lay off some people in order to not raise taxes.”

Cutting $1 million in staffing costs would mean eliminating as many as 25 positions, Michaud said. That could mean six positions each in the public works, fire and police departments, two from dispatch, four from City Hall and one from the parks and recreation department, he said.

“That’s just an example,” Michaud said.

Michaud’s example doesn’t account for employee benefits, said Councilor Marston Lovell, which could reduce the number of eliminated positions.

“We’re so early into the process, it’s hard to say how it is going to work out,” he said.

Christenbury said he expects the budget to change significantly as councilors hold four budget workshops from April 4 to 25.

Some councilors have already discussed alternative options for cost saving and revenue production.

Christenbury said there was some discussion about closing the North Saco and Camp Ellis fire substations, but he couldn’t say how much money that would save.

Michaud said options to fund the budget include using nearly $1.7 million that has been set aside for capital projects, and generating new revenue through pay-to-throw trash disposal, added parking meters and beach permits, or storm water utility fees.

Savings could come from consolidating emergency dispatch operations.

Lovell said the council has also discussed self-insurance for the city, as well as ways to save in various municipal departments. “It’s really a balancing act,” he said.

 

Staff Writer Emma Bouthillette can be contacted at 791-6325 or at:
[email protected]