KENNEBUNKPORT — Kennebunkport kicked off its budget season earlier this month with a presentation from Town Manager Laurie Smith.

Her proposal for the coming fiscal year, which begins on July 1, includes a $1.051 million increase in municipal expenditures, efforts to increase non-property tax revenue, and $2.41 million in capital costs.

The proposal is currently making its way through the town’s budgeting process.

The Select Board will make recommendations to the proposal on March 28, which is then submitted to the Budget Board. After that, the Budget Board reviews it and makes recommendations on April 4.

There will be a public hearing on the budget at some point in May, but the Select Board has yet to set the date for it, according to Smith. The budget is then sent to residents, who will vote it up or down on the June 11 ballot.

The municipal portion of the mil rate – the amount per $1,000 of property value that one pays in property taxes – is set to increase 6.44% under Smith’s proposal, or $0.16.

The final mil rate for the coming fiscal year is not locked in until June, when the education and county portion of the mil rate are finalized.

Using estimates from the county and education budget, the total tax rate increase is projected at 5.56%, or $0.35, for a total of $6.60, but Smith cautioned that these are initial numbers that are subject to change.

Regional School Unit 21 and the county have a separate budget process that is currently underway.

What will Kennebunkport spend money on this coming year?

Under Smith’s proposal, municipal expenses will rise by $1.051 million, to $13.4 million – largely driven by wage and benefit expenses, capital spending, and solid waste costs.

The town also anticipates an increase in wages for town employees, whose union contract expires on June 30. The town and the union will negotiate the new contract this spring, and Smith proposes earmarking an additional $391,000 for potential wage and benefit increases.

“Based upon the data from public employers in our region and analysis of our employee’s skill sets we have budgeted the funding necessary to keep Kennebunkport a competitive employer in 2024 and 2025,” according to her proposal.

During her presentation, Smith noted the workforce and labor challenges that the town is facing.

“Finding a workforce has been challenging because of the affordable housing issue and because of a smaller labor market as boomers have retired. Kennebunkport must cast a wide net to find our service providers,” she said.

Under Smith’s proposal, town spending on solid waste costs will increase $190,670 in FY 2025, because the town’s new contract with Casella Waste Systems will go into effect on Sept. 1.

When it comes to debt, not much has changed from FY 2024. Per the proposal, Kennebunkport will spend $1.3 million on debt service, which is a 0.56% increase from the year before.

Capital expenses are also up under the proposal, for a total of $2.421 million (a 9.50% increase from the year prior) in part thanks to damage brought by the two January storms, which caused an estimated $850,000 in public infrastructure damage in Kennebunkport.

If the town receives funding from the Federal Emergency Management Agency (FEMA) to support repairs, it will likely need to match those funds with 10% local dollars. The federal government has not yet approved a major disaster declaration for the two storms, but Smith’s budget proposes earmarking $85,000 within its capital expenses to cover that local match.

Some big ticket items in FY 2025 capital accounts include spending on new highway vehicles ($310,000), road and sidewalk improvements ($963,000), and special projects specifically aimed at increasing the town’s resilience to extreme weather ($500,000).

One of those resiliency projects would be, for example, allocating $120,000 for a project to raise the height of the road and install a box culvert system for Ocean Avenue by Wandby Beach. This road was washed out in the Jan. 13 storm and is currently closed, according to Smith.

The total cost of the project for this section of Ocean Avenue is $2.4 million, but the town would seek to tap into the additional $50 million included in the governor’s budget to bolster the Maine Infrastructure Adaptation Fund, if it’s included in this year’s final supplemental budget.

The $120,000 is the amount the town would need to meet the 5% match if it is successful in its grant application, according to Smith. Kennebunkport has already successfully applied to use money from the Maine Infrastructure Adaptation Fund in the past.

While 82.4% of total revenue is estimated to come from property taxes, Smith’s budget aims to increase non-property tax revenue in FY 2025 by $312,006, or 9.36% – largely thanks to multiple fee increases.

“I want you to know that what I heard from the Budget Committee last year was a desire to optimize non-property tax revenues as much as possible. So this revenue budget is built upon these fee changes,” said Smith during the presentation.

Smith proposes bumping up the building permit fee to $14 per $1.000 (up from $12) and increasing the annual liquor license fee to $225 (currently $150), which would generate $100,000 and $2,025 respectively.

The town is also expecting more revenue from fees changes that have already been enacted, like recent increases to the Dock Square parking lot fees, which are now $5 per hour, and are expected to bring in $72,000 in FY 2025.

“These fees would be in line with the highest fees in the county,” Smith said.