SACO — City councilors in Saco will review information from the city’s finance director and decide next week which direction it wants Saco to pursue when developing a proposed budget for the next fiscal year.

After hearing three different budget directives from Finance Director Glenys Salas on Monday night, the City Council voted to wait until next week to approve a direction to guide city staff as it develops a fiscal year 2020 budget proposal. This is the beginning of a several month long process before a budget for the next fiscal year will be approved.

The current mil rate in Saco is $19.38.

Salas presented the City Council with a budget scenario that would address critical needs, one that would maintain current city efforts, and one that would maintain a zero mil rate increase.

The proposed critical needs budget would adjust staffing to accommodate the increasing population, increase maintenance budgets to match capital asset growth and includes capital and software additions that would improve productivity.

The critical needs budget would increase the municipal mil rate by 99 cents, should the city’s valuation increase at a moderate level. The proposed school budget would increase the mil rate an additional 11 cents, and county taxes would increase the mil rate an additional 1 cent. This total $1.11 mil rate increase would mean a $222 annual property tax increase on a $200,000 home.

The maintenance budget directive would fully fund public service contracts and new hires from the current fiscal year, pay for contracted increases, make more appropriate use of the economic development and TIF funds and retain sufficient funding for the new business park.

The maintenance budget would increase the municipal mil rate by 44 cents, should the city’s valuation increase at a moderate level. The proposed school budget would increase the mil rate an additional 11 cents, and county taxes would increase the mil rate an additional 1 cent. This scenario would mean a total mil rate increase of 56 cents, which would equate to a $112 annual property tax increase on a $200,000 home.

A budget that would not increase the budget on the municipal side would reduce department budgets by $350,000, cut the capital improvement program by $300,000, support unsustainable use of special reserve funds and would not give the city necessary funds form the new business park.

A budget with a zero mil rate on the municipal side would require an increase of 11 cents from the preliminary proposed school budget and 1 cent from county taxes, leading to a 12 cent mil rate increase, or $24 annual property tax increase on a $200,000 home.

Glenys said a zero mil rate increase would mean cuts due to in part to two factors — the municipal mil rate is the lowest it has been since 2012 and the city is experiencing the lowest valuation growth in four years.

Salas said over the past few years, the mil rate impact of the school budget has steadily increased, however the municipal budget’s impact on the mil rate has decreased.

Salas said the lowering of the municipal mil rate has, over the past few years, equated to a $3.2 million shortfall.

Salas said some of this $3.2 million could be due to efficiencies made by city department heads, but much of the shortfall has come from increasing pressure on departments, as population continues to grow and staffing and resource line items have not continued to grow.

Salas said the city, in the past few years, has strived to keep the mil rate flat or at a minimal increase while school costs increased.

“And although I think that this is admirable, it’s really important that we’re meeting the needs of the municipal side of the house as much as we meet the needs of our school,” Salas said. “All in all, our mil rate right now is at an unsustainable low rate.”

Salas said public service departments have been understaffed and in some cases underpaid. She said the city has been funding it’s capital program at an unsustainable level and drawing on special interest funds such as the Camp Ellis fund, the economic development fund and the ambulance fund at an unsustainable rate.

— Liz Gotthelf can be reached at 780-9015 or by email at [email protected].