PORTLAND — City Manager Joe Gray will begin meeting this week with department heads in an attempt to close a projected $8 million budget gap.

For the third year in a row, Gray said jobs and services will have to be cut. In the 2009 budget, major departments were merged or eliminated and 90 positions were cut. In the 2010 budget, five firefighter positions were eliminated and city employees agreed to a salary freeze.

Gray this week would not say how deep cuts would be in the proposed 2011 budget that will be presented to the City Council in April.

“It will be a combination of eliminating programs and positions,” said Gray. When asked if cuts would be similar to those made in the 2009 budget, Gray said he did not know yet.

In an e-mail to all city employees Feb. 26, Gray blamed the budget shortfall on the continuing recession, cuts from Augusta, revenue losses and expected increases in utility costs.

Gray said he will begin meeting with department heads March 3 to determine where cuts can be made to their proposed budgets. He met with union leaders last week to discuss the shortfall.

The City Council passed a $189 million budget for the 2010 fiscal year, which represented a zero percent increase over 2009 and kept the tax rate at $17.74 per $1,000 of assessed value.

Gov. John Baldacci has proposed cuts to general aid for municipalities in his budget, and that would result in a $1.4 million loss for the city. Gray said this week that legislators may not support the general aid cut.

Meanwhile, the school department is expected to release its proposed 2011 budget March 3. The department is facing a $6 million budget gap and Superintendent James Morse is proposing eliminating about 100 positions. The 2010 school budget was $91 million.

The City Council gets its first look at the proposed 2011 school and city budgets April 5 and the council Finance Committee is expected to spend most of April reviewing the proposals. On May 3, a city budget public hearing is scheduled for 7 p.m. in Council Chambers. That same night the council is expected to approve a school budget. The council votes on the city budget May 17.

Kate Bucklin can be reached at 781-3661 ext. 106 or [email protected]

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