SACO — The school department has presented the city council with an option for a zero percent tax increase on the school side.

The Saco Municipal School Administrative Unit and the city council discussed the proposed school budget Monday night at City Hall. The city council will vote on a school budget on May 5, and the budget will go to residents for final approval at a city-wide referendum in June.

Saco MSAU Superintendent Michael Pulsifer presented the board’s recently proposed school budget of $33.1 million, which would increase the mil rate by .17, or 17 cents. This would mean a $33.76 tax increase on a $200,000 home for the coming school year.

The school department recently learned that it will be saving $217,000 in insurance costs, and by using this savings to offset spending, the school department can decrease the impact on the mil rate to 6 cents, said Pulsifer.

The school will be bringing in a negative fund balance of $480,000, which it had planned to pay off to the city over three to five years, said Pulsifer. If the school defers this year’s payment of $125,000, it would mean a flat mil rate.

“If the city works with us ”¦ we will be at a zero percent (tax increase),” said school board member Cynthia Chadwick-Granger.

Pulsifer said the proposed budget includes a $100,000 contingency fund, and should something happen that would necessitate money beyond that, the school board would have to go to the city council for more funds. He said the school board could add more money and put more of a cushion in its contingency fund, and any unused money would go back to the city.

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