WATERVILLE — The City Council on Tuesday got a first look at a proposed $18.2 municipal budget for 2018-19 that represents a decrease of 0.8 percent from the current $18.3 million budget.

The budget workshop included discussion of budgets for the finance, city clerk, health and welfare, planning, code enforcement, economic development and fire departments.

The city and school budget approved last year was $39.9 million. The reason the proposed budget reflects a decrease is that no capital improvements are being proposed other than $250,000 for roads, according to the city’s finance director, Heather Rowden.

It is not known yet how the current tax rate of $23.33 will be affected with the budget, since the school budget numbers are not yet in; in fact, a meeting of the council and Waterville Board of Education scheduled for last week was postponed because school numbers were not ready.

Rowden said earlier Tuesday that the city’s proposed municipal budget increase would increase the property tax rate by $1.68 per $1,000 worth of valuation. She said that while expenses are proposed to decrease, revenue also has decreased, and that is the reason for the proposed tax increase.

It should be noted that no figures are cast in stone and budget numbers could change during the budget process.

City Manager Michael Roy issued a proposed budget memo to councilors and Mayor Nick Isgro last week that says the proposed budget for 2018-19 includes “good news and bad news.”

The good news: proposed expenses are $141,028 less than last year,” the memo says. “The bad news is that our estimated revenues are also less than last year — in the amount of $1,356,930. This shortfall is almost completely due to the loss of one-time funds which included the use of surplus, PERC (Penobscot Energy Recovery Co.) reimbursement money and prior year bond money.”

Roy’s memo says that on the expense side, the good news is largely the result of a proposed reduction of $700,000 in capital improvement spending. While officials strongly recommend an annual commitment for capital improvement needs, they are proposing a year’s delay since the city will bond in 2019 and could catch up at that time.

The proposed budget requires $1.21 million more from taxation than that of the current budget and the amount could easily be covered by increasing state revenue sharing to what the law requires, according to Roy.

Since 2009, Waterville has had an average annual loss of $1.4 million in state revenue sharing, his memo says. The city covered the annual shortfall in revenue sharing over the last seven or eight years by using surplus money, an increased tax rate, delaying capital improvements and reducing funds for road improvements, according to Roy. As a result, the city’s fund balance took a serious hit, dropping from $10.7 million in 2008 to $5.45 million in 2017, he said.

The city has a policy of keeping the fund balance at 12 percent. The proposed budget includes no funding from the city’s existing reserve, according to Roy. Last year, he said, the council authorized use of $780,000 of surplus.

“In addition to less surplus use, we also are proposing $566,500 less in other one time funds,” Roy says. “We believe that this proposed budget represents a modest approach to preserving current city services while acknowledging the need to maintain a reasonable tax rate.”

In addition to controlling expenses, the other key to maintaining a reasonable tax rate is expanding the tax base, according to Roy.

“With a $50 million dollar improvement in our downtown and a new I-95 interchange on Trafton Road, we now have hope that the city’s tax burden will return to a more even distribution of commercial and residential taxpayers. In the meantime, we hope the proposed budget helps ease the city into a sustainable future.”

At Tuesday’s budget workshop, Rowden and City Clerk Patti Dubois explained they are proposing to split the cost for increasing a counter clerk position from part-time to full-time.

A few years ago a part-time accounting clerk’s position was lost, and now the office is swamped, they said.

Dubois said part-time positions are difficult to maintain and there is a large turnover as well as a steep learning curve, and there would be better retention with a full-time person. She also said if someone is out for any reason, the office is in trouble.

The full-timer would do voter registration and election duties, work at the counter for both the clerk’s and finance offices and do other work.

Dubois said the clerk’s office budget is up about 25 percent, or about $3,700, because with the new polling place at Thomas College, some new equipment had to be purchased, including signs and ballot equipment. She said she proposes buying a lighted sign to direct voters to the polling place, as it is difficult for people to find the location. The sign would be a significant investment of $1,000, but renting one would cost about $600, she said.

Health and Welfare Department Director Linda Fossa said there are no big changes in her budget on the administration side except in the cost for benefits. Fossa said she plans to retire March 7, 2019.

“That’s a lot of institutional knowledge that we will miss,” Isgro said. Councilor Nathaniel White, D-Ward 2, concurred.

“We appreciate your service,” he said, to which Councilor Sydney Mayhew, R-Ward 4, added: “Absolutely.”

With so many administrators retiring or leaving, White asked Roy if the city has a plan to ensure there is knowledge passed on to the new employees, to which Roy said there is — that the city tries to do that whenever it can.

Fire Chief David LaFountain will retire this year, and City Engineer Greg Brown retired and was replaced by Nick Champagne, a former councilor.

The next budget workshop is scheduled for 7 p.m. April 10 in the council chambers at The Center, where the library, police, airport, parks and recreation and human resources budgets are scheduled to be discussed.

Amy Calder — 861-9247

acalder@centralmaine.com

Twitter: @AmyCalder17