PORTLAND — City Manager Mark Rees is proposing a $206.8 million municipal budget, which would raise the property tax rate 2.9 percent and fund new initiatives that could lead to significant changes in city government.

Rees presented his budget Monday to the City Council. While it proposes no layoffs in the fiscal year that starts July 1, maintaining the existing work force should not be interpreted as stagnation, he told the council.

He said he is bringing a “fresh perspective” to city operations and has proposed initiatives designed to “set the city on a path that supports innovation, economic growth and enhances our customer service.”

Mayor Michael Brennan, who worked on the budget with Rees in his new role as the city’s popularly elected mayor, was broadly supportive of the budget in a speech he gave before Rees’ presentation.

“Budgets are a reflection of the values of the community,” he said. “I think this budget is responsive to the values of the community and of Portland.”

With Superintendent Jim Morse proposing a $94.9 million school budget, the tax rate for schools and municipal services would go from $18.28 per $1,000 valuation to $18.86, which is a 3.2 percent increase, said Councilor John Anton, who chairs the council’s Finance Committee.

Anton said he appreciates that Rees has proposed a budget that reflects the council’s priorities.

Every year for the past five years, Anton said, the city has struggled with its budget, “limping year to year.”

This is the first year the city is prepared to take an “affirmative” direction, he said.

The Finance Committee will meet tonight to start work on Rees’ budget proposal.

The council is scheduled to hold a public hearing and vote on the budget April 25. The school board will hold a public hearing and vote on its budget April 10.

The initiatives in Rees’ budget include:

Examining the fire department’s resources, in the first such review in nearly 30 years.

Reorganizing the top management structure at City Hall by eliminating two assistant city manager positions and creating two new positions: deputy city manager and director of recreation and facilities management.

The deputy city manager would oversee day-to-day operations of the police, fire, human services, parking, and recreation and facilities management departments.

The city manager would manage the planning, finance, information technology, assessor, human resources and economic development departments.

Creating a position for someone to oversee the city’s efforts to revamp its website and implement a new centralized service request system.

Establishing a pay-for-performance plan for the city’s non-unionized employees. Rees said he wants to make sure that employees are appropriately compensated and that excellent job performance is rewarded.

Combining the city’s information technology functions into a new department that reports directly to the city manager. In addition, Rees wants to work with the School Department to create an internal working group to look for efficiencies from integrating the city’s and schools’ information technology departments.

Creating an interdepartmental working group to coordinate the city’s transportation initiatives. Also, Rees wants to make the grant-funded bicycle and pedestrian coordinator a permanent position. That position has been funded by a federal anti-obesity grant.

Rees said the budget anticipates $870,000 in energy savings as the result of investments made through Portland’s energy service performance contract.

The city awarded a contract a year ago to an engineering firm, Ameresco, to implement $9.4 million in energy investments. Officials estimate the project will save the city nearly $17 million over the 15-year project while reducing Portland’s carbon footprint.

Rees said he expects that spending for General Assistance will increase by $1.4 million, a 20 percent increase over this year. He said the spending increase is due to a number of factors, including the sluggish economy, increased demand at the city’s homeless shelter and the rising number of people seeking asylum.

He said Gov. Paul LePage has proposed changes to the program that would cost Portland $2.25 million in lost state revenue, having a “devastating” impact on city finances.

Rees said the city has seen virtually no increase in taxable property value in the city. The city has $7.5 billion in assessed property value, and the value this year increased by only $15 million That’s a 0.02 percent increase, he said.

Staff Writer Tom Bell can be contacted at 791-6369 or at: tbell@pressherald.com