CARIBOU, Maine — Caribou City Council approved a $10,394,685 total budget for 2021 on March 15 after a public hearing — a decrease of $41,613 from last year’s budget.
The total budget includes funds for enterprise accounts, operations and capital budgets in 2021. The total for operations and capital is $9,861,241, and the total for just the operations budget is $9,115,382, or $207,415 less than last year’s budget.
This year’s budget was prepared under a new charter process approved by voters during the November 2020 election, in which the city would change its budget preparation process from one that starts in October and ends in December of the prior year, to one that starts in November of the previous year and run up until March 15 of the current budget year.
The new process allows city officials to simultaneously review revenues and expenses, and includes a provision that the city will be able to operate on the previous year’s budget numbers until the new budget is adopted.
Caribou City Manager Dennis Marker, in a budget message included in the council packet, wrote that while these changes can make it easier for city officials to create the budget, the COVID-19 pandemic still led to uncertainties while creating this year’s budget.
“Early 2020 revenues projections were $10.63 million, and then the state of emergency was instated, and the unaudited end-of-year revenues were only $9.95 million, a difference of over $678,000. Expenses initially budgeted at $10.44 million ended the year at $9.78 million after program cuts from social distancing requirements, cutting projects to match the revenue shortfalls and even a very mild winter that reduced snow plowing needs. Facing the pandemic situation continues to be a focus in 2021,” he wrote.
Marker wrote that while pandemic protocols are anticipated to lift with vaccinations coming to the area, most of the year will still likely include pandemic restrictions.
Changes this year include a $125,000 increase in personnel-related expenses as a result of mandates from state and insurance providers. This year’s budget includes a 2 percent cost of living adjustment for all personnel, and the state’s minimum wage increase of $12 to $12.15 an hour will primarily affect seasonal recreation center employees, but Marker said this could be offset because of pandemic protocols limiting recreation programs this year.
And though the city was at one time considering adding two new positions — a grant writer and an official responsible for overseeing facilities maintenance — they will no longer be funded this year in an effort to curb property tax increases. Marker said the combined cost of both positions, including benefits, would have been roughly $85,000.
Revenue projections for the operations and capital budget are estimated to be $9,899,511 or $167,602 less than last year’s budget.
“The primary contributing factor to the difference in the estimates is that the 2020 budget assumed the mill rate would be the same as in 2019 at [$24.55 per $1,000 valuation]. The council arbitrarily reduced the mill rate by a full mill last year, which resulted in $695,000 less funds coming to the city. This budget assumes the mill rate will be increased slightly from the 2020 rate of [$23.55 per $1,000], and that the city will receive nearly $400,000 more in state revenue sharing based on the governor’s 2021-2022 budget numbers,” Marker wrote.
The city manager said it’s not yet possible to determine this year’s final mill rate, as the RSU 39 school board is just beginning its budget process and the city’s valuation will not be known until April 1.
Marker concluded in his statement that this year’s budget is focused on maintaining operational budgets amid the pandemic while investing more in capital facilities maintenance.
“Department heads have effectively cut their operational budgets for the past four years while dealing with mandated cost increases and major capital projects,” he wrote. “This means there are fewer opportunities to reduce spending without making major changes to services and programs, limiting maintenance of assets, reducing integral benefits for staff, or tapping into foundational reserves.”
No public comments were made during the public hearing portion of the council’s March 15 meeting. The council then approved the budget and adjourned roughly five minutes after the meeting began.
