City Manager Jon Jennings on Monday formally presented a budget proposal that would close a city-run clinic on India Street and eliminate other public health positions because of a loss of state grant funding.

Instead of providing direct clinical services, Jennings said the city would partner with the Portland Community Health Center to continue treating patients at the nonprofit health clinic on Park Avenue.

Jennings said the proposal was made because the nonprofit health clinic on Park Avenue is eligible for higher reimbursements for services provided to low-income patients. “It is our hope we will start a community conversation about the core functions of government,” he said.

It’s also part of his effort to “right size” government and place a greater emphasis on basic services, such as paving roads and fixing sidewalks. Such jobs aren’t glamorous, he said, but “they are the foundation of what makes a city great.”

The City Council voted unanimously to refer the $235.9 million municipal budget proposal – a nearly $11 million, or a 5 percent, increase over last year – to its Finance Committee, which will make its own recommendation to the full council. The Finance Committee will begin its budget review Wednesday and is scheduled to discuss the public health changes at 2 p.m. on April 14.

The budget contains a property tax increase despite a development boom that has added more than $68 million to the city’s overall property valuation and is estimated to bring in an additional $1.4 million in tax dollars each year. It also comes as the city is expecting to see an additional $10.6 million in excise taxes next year, and a 13 percent increase in building permit and business licensing revenue.

However, the city’s expenses also are growing, including a 14 percent increase in health care costs that is adding $2 million to the budget. City employees also are getting a 2 percent cost-of-living raise, and the city’s new minimum wage law has added nearly $50,000 to the budget. County taxes will increase by $177,000.

When combined with the proposed school budget of $103.6 million, the overall city budget would increase property taxes by 2.3 percent, bringing the tax rate up to $21.10 per $1,000 of assessed value from $20.63 per $1,000. That would result in a $141 property tax increase on a home with an assessed value of $300,000.

Tax increases in each of the last three years have ranged from 3 percent to 3.1 percent. Jennings said a status quo budget would have added 5 percent to the tax rate.

The budget would eliminate about 13 positions, the net result of adding about 50 new positions and eliminating more than 30 others.

Mayor Ethan Strimling was scheduled to present his own budget message Monday, but he was absent because of illness. City Councilor Nicholas Mavodones filled in as mayor and said Strimling would present his message at the next meeting.

“Please pay attention to what we’re doing,” Mavodones said. “We’ll be reviewing this over the coming weeks.”

Although the budget reorganizes several departments, the biggest changes are proposed in the Health and Human Services Department, including the closure of the India Street Public Health Clinic, which provides free healthcare to low-income people.

The clinic has an annual budget of $1.4 million, including $450,000 in city funding. The rest of the funding comes from grants and insurance reimbursements. From 2014 to 2015, 230 patients received HIV-positive health care, while 1,405 people were tested for HIV and other sexually transmitted diseases, according to the most recent annual report. The needle exchange program served 808 enrollees, including 316 new individuals, collecting and redistributing more than 140,000 needles.

Those services would be moved the Portland Community Health Center, a federally qualified health clinic that is eligible for higher reimbursement rates for some services, by the end of the year, Jennings said.

About 13.5 full-time equivalent employees would lose their jobs with the clinic closure.

Also, the city is eliminating 13 full-time equivalent employees from the public health staff whose salaries were paid through the Fund for Healthy Maine. Instead of partnering with municipalities, the state is issuing four statewide grants.

Jennings said the city is losing $800,000 in public health and refugee services grants from the state.

The budget also includes a sustainability coordinator and two new electric vehicles. It eliminates the construction crew in the Public Works Department to devote more resources to district-based issues, such as streets, sidewalks and trees.

The budget also includes an increase in the frequency of street sweeping.