SACO — Members of the Saco City Council have asked the city administrator to come up with a proposed municipal budget for the next year that will not increase taxes.

City Administrator Kevin Sutherland at Tuesday night’s City Council meeting presented a preliminary $25.9 million municipal budget projection for the 2018 fiscal year. Of that total, $5.9 million are fixed costs, and the remaining $20 million are variable costs. The municipal budget does not include the school budget.

Sutherland’s proposal included about $510,000 gap between spending and revenues. To bridge the gap, Sutherland proposed raising the tax levy 1.27 percent.

The Homestead Exemption reimbursement, a state program which allows residents to exempt a portion of their property value from taxes, is increasing from $15,000 to $20,000. Because the homestead reimbursement is increasing, a tax levy increase of 1.27 percent on the median home in Saco, which is valued at $213,000 would still mean a savings of about $50 a year in taxes.

The proposed municipal budget includes about $290,000 in salary increases. Sutherland said about $120,000 of salary increases is tied to the increase in minimum wage. City employees making minimum wage are primarily employed in the Parks and Recreation Department.

The proposed municipal budget also includes about $210,000 in health benefit increases.

Sutherland is also proposing a $1 million capital improvement fund, up $200,000 from the current year’s $800,000 capital improvement fund.

An overview of Sutherland’s proposal can be found at sacomaine.org.

Sutherland will come back to the City Council March 20 with a budget proposal. The council is scheduled to vote on a city budget May 8, after meeting with department heads and hearing input from the public.

The council asked Sutherland to come back with a proposal that does not increase the tax levy. Sutherland said in an email that he will work to reduce the budget by $510,000, but will also determine if he can offset any of the $510,000 gap “with a better use and understanding of our special revenue funds and changes to revenue.”

School Finance Director Jason DiDonato gave a presentation Wednesday night on an initial school budget of about $36.3 million, nearly $2.3 million more than last year.

The preliminary 2018 school budget includes $1 million more in tuition for Thornton Academy, due to an increase in students. The School Department is under contract with Thornton and pays the private school tuition to educate the city’s high school students.

This year the School Department had to pay more than budgeted because of a higher number of Thornton Academy students than projected, and it has increased the budget for next year to accommodate additional students.

The school budget also includes about $600,000 in salary increases and an estimated $500,000 in employee health benefit increases.

DiDonato said it is uncertain how much state subsidy the School Department will get to offset expenditures and did not project how the school budget could potentially impact the tax rate.

Staff Writer Liz Gotthelf can be contacted at 282-1535, ext. 325 or [email protected]


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