Staff Writer
PRESQUE ISLE — City Council found itself in a difficult position at Monday night’s session, as councilors discussed the impact SAD 1 budget will have, if validated by voters June 9, on the city’s budget that was approved during Council’s December 2008 session. In light of recent economic difficulties affecting the nation, Presque Isle officials have been struggling for months with how to maintain essential services while the city’s revenue continues to decline. Council had made cuts to the $13.4 million 2009 budget since it was voted on in December, trying to maintain the mil rate at 23. Due to unforeseen cuts in revenue at the state level and if voters favor the SAD 1 budget as presented, taxpayers in the Star City could see their mil rate increase by at least one mill, according to City Manager Tom Stevens.
“City Council met last week and first began discussing the impact the school budget would have on the city’s final budget at that time. On Monday, Council again discussed the matter. We’ve been waiting on a final figure from SAD 1 and the county to determine a final figure. The county figure came in at just over $6,000 and will have little effect on the city’s budget. SAD 1’s, however, is a different story,” said Stevens.
Stevens said SAD 1’s budget increase amounted to just under $400,000.
“That equals an .83 mil increase for taxpayers. When Council adopted the budget last winter, it included a $145,200 increase at the city level, equaling a .3 mil increase. Combined, that’s up over a mil from the 2008 figure,” said Stevens.
Stevens explained what that would mean to property owners in Presque Isle.
“A home valued at $100,000 currently is taxed at $23.15 per $1,000 in valuation, resulting in taxes of $2,315 on the property. Raising the mil rate would increase those taxes by $100, to $2,415. That’s putting it in simple terms,” said Stevens.
The city’s portion of the increase was brought about due to changes in state revenue sharing and a drop in excise tax collection.
“When Council adopted the budget in December, we anticipated a decrease in revenue but not to the extent that occurred. State revenue sharing and excise taxes are both tied to the economy and are derived from sales taxes and income taxes that are returned to communities. People aren’t buying as many new cars and aren’t spending as much, so there’s less going back to communities like Presque Isle,” said Stevens.
At Monday’s session, Stevens told councilors efforts continued to be made to maintain essential services while making necessary cuts to keep the budget balanced.
“Council is required by city charter to keep the budget balanced. We’ve benefited in some areas, such as fuel costs remaining lower and property and casualty rates coming in considerably lower. We’ve also had pavement and other bids come in lower. But efforts to address a shortfall may strain us next year,” said Stevens. “I’m not trying to mask anything by saying we can do the same with less. If there is a reduction, it’s truly being highlighted as a reduction.”
Cuts are being made, according to Stevens, through various measures.
“In the area of personnel, we’re looking at openings through retirements and have three on the horizon. One recycling center position will be split between two part-time folks. We’ll use funds from a COPS grant, over four years, to have officers cover the duties performed by a retiring police dispatcher. And the parking enforcement position will be eliminated. Officers will perform that function as time and availability allows,” he said.
Stevens said although some purchases can be put off, eventually that will only postpone the inevitable.
“We can put off purchasing a plow truck or a cruiser, for example, but that could lead to greater expense in the long run, as older vehicles need more maintenance and break down more often,” said Stevens. “Postponing purchases saves money now but can have a long-term effect on future budgets.”
Stevens said Council used $550,000 from surplus to keep the mil rate down last year but because not as much went back into surplus over the past year due to a drop in revenue, Council won’t be able to use that much again this year.
“We currently have sufficient funds in surplus to serve as a buffer and could use a smaller portion than last year, just not as large a sum,” Stevens said.
Councilors who’d expressed concern at the May meeting over the impact the school budget would have on the city’s, continued to voice their displeasure June 1. Councilors wanted the public to know they’ve been working to maintain the mil rate, making as many cuts as possible while maintaining services, and that if the mil rate goes up, it’s largely due to SAD 1’s budget increase.
Councilor Ron McPherson, at the May meeting, stated that there was not much of a choice in the mil increasing. Councilor G. Melvin Hovey, at the same meeting, indicated the public needed to know how their taxes would be affected.
Councilor Calvin Hall said at the May session he was unwilling to slash the municipal budget just to meet the school budget. He stressed the importance of educating the citizens when they go to the polls and they vote to support the SAD 1 budget, they need to know they are supporting a tax increase.
Chairman Ed Nickerson expressed his frustration on what venue to use to get the public involved to a point that they ask some hard questions regarding the school budget.
Councilor Walt Elish suggested before councilors spoke in opposition to the school budget, they should review what cuts were made to it as it appears now.
Nickerson reiterated at the May meeting that the one thing that the City Council wanted is to make it very clear to the taxpayers of the city that they are going to receive at least a mil increase this year, not because of something the city government has done but what SAD 1 has done.
Following a lengthy discussion Monday, councilors agreed more was necessary before any final budget decisions were reached.
“All these meld into each other but in a way are separate. I don’t want to wait until July 6 to be hammering out changes. We’ll have to hammer them out, then address tax changes. Before that, I’ll want the most recent numbers, certainly through May, where figures are trending. I have a lot of questions as to where we’re looking (for cuts) or where we could look,” said Hall. “We have to deal with the budget revisions before we can deal with the others. Dealing with the tax rate is when we discuss surplus.”
Councilors set a June 15 date for a workshop to go over the budget again, hoping to arrive at a workable figure. By that time, voters will have reached a decision on the SAD 1 budget, giving Council a definite school figure to factor into the budget. The meeting will be held at City Hall at 6 p.m. The public is welcome. For more information, contact 764-4485 or e-mail nmcentee@presqueisleme.us.
Council’s next regularly-scheduled session will be held Monday, July 6, at City Hall at 6 p.m.
