PORTLAND — A $196.3 million municipal budget approved by the City Council Monday night includes an increase in the cost of trash bags and a decrease in the number of police officers on Peaks Island.

The fiscal year 2011 budget goes into effect July 1. It is $7 million larger than the current budget, and combined with the recently approved $89.9 million school budget, will raise the tax rate 18 cents, to $17.92 per $1,000 of assessed value.

The budget includes funding for a few items City Manager Joe Gray recommended eliminating or reducing, that were restored by the Finance Committee.

Peaks Island police coverage will be reduced from two officers to one per shift, except on summer weekends, when two officers will be assigned to patrol. A firefighter trained in emergency medical services will be on the island 24 hours a day.

Gray had recommended one officer all the time, but the Finance Committee added $26,000 to the police budget to pay for the extra weekend coverage. The council approved that recommendation despite testimony from patrol officers that having just one officer on the island could put that officer in danger because of the lack of back-up.

Patrolman Eric Nevins also said Monday night that it would take 30 minutes to get a second officer out to the island in the event of a call requiring back-up.

“I’m not willing to sacrifice the safety of the islanders or the officers out there,” Nevins said.

Police Chief James Craig, however, supported the reduction in service. Peaks averages about 1.7 calls for service a week.

The council also approved $90,000 in funding to keep the Riverton branch library open for one year. Riverton, along with the Reiche and East End libraries, were recommended to be shuttered by library officials and Gray, but the council decided Riverton’s remote location warrants giving users a year to transition.

“It is a valuable asset to the community,” said resident Steve Aylward, who is also a teacher. Aylward said branch libraries are important to a successful civic society.

Two executive department positions were restored: the business development representative position was spared and the multicultural affairs position was restored to full time, with the added responsibility of promoting minority business development.

Both positions will be funded through a Downtown Portland Corp. loan fund. Although the DPC approved the $83,000 in funding, it urged the council to find another way to fund the positions next year.

The council approved increasing the cost of city-required blue trash bags. Small bags will increase 25 cents per bag, to $1, and the price of large bags will increase 50 cents, to $2. The price hike is expected to produce $350,000 in added revenue.

City staff had previously recommended changing the color of the blue bags as well, to prevent residents and vendors from stocking up on bags before July 1, when the price change takes effect. When the city upped the price in 2008, there was a run on bags in weeks leading up to the change.

But Public Services Director Mike Bobinsky said that after speaking with major vendors Hannaford Bros. and Shaw’s, it was decided that a color change would too many problems. The two supermarkets have instead agreed to limit the number of bags each customer can purchase up until July 1.

Although several last-minute amendments to the budget were proposed Monday night, only one passed. The council decided against increasing the fee for Historic Preservation administrative review from $50 to $100 and the fee for the board’s review of small projects from $100 to $250. The change is expected to cause minimal revenue loss – about $3,500.

Councilor John Anton said that even though the proposed increase was small, it could make the cost of a small home repair project, such as replacing a door in a historic district, “a big hit.”

The council approved the budget unanimously.

Kate Bucklin can be reached at 781-3661 ext. 106 or kbucklin@theforecaster.net