AUGUSTA — A proposed $80.3 million budget would require a 9.3% property tax increase, according to city officials.

City Manager Susan Robertson said the main drivers of increased city spending are contractual wage increases for city employees, a nearly $500,000 increase in the cost of utilities, the need to use an increase in tax revenues to start paying debt incurred to build the new police station and demand for increased services to address needs that are going unmet.

The $80.3 million spending plan includes $2.1 million for the city’s portion of the $19.3 million Kennebec County budget, as well as $36.6 million for schools and $41.6 million for municipal expenses.

The spending plan is the subject of a public hearing Thursday at 7 p.m. in council chambers at Augusta City Center.

The budget includes plans to add firefighter/paramedics to address an ongoing staff shortage as the number of fire and rescue calls continues to escalate and an assistant planning position which has been unfilled in recent years. It also includes the addition of two new code enforcement officers and an administrative assistant, whose salaries and benefits could be covered by fees collected from landlords as part of a proposed new rental housing inspection program.

But it does not include a third new code enforcement officer city staff have said is needed, nor four additional firefighter/paramedic positions or a second deputy chief’s position sought by public safety leaders, and leaves a vacant police officer position unfunded.

Robertson said the budget had to increase from last year to try to address growing needs, some of which, she warned, may still go unaddressed. She submitted the spending plan on Saturday to city councilors, who will review it over the next several weeks.

While revenues are up somewhat, they are not increasing at a rate sufficient enough to keep up with inflationary costs or demands for service, according to Robertson.

“Unlike last year I am unable to present a maintenance budget since we are seeing unmet needs that cannot be ignored if we want to meet the expectations of the public,” she said. “This budget addresses some of those needs but there are still positions that are going unfilled and are staffing needs in some areas that are going unaddressed due to fiscal constraints.”

The budget as proposed would increase the property taxes for the owner of an average home in Augusta valued at $129,400 by $262.78, to $3,098.94.

Spending in the budget is up by $7.7 million, a 10.7% increase, though some of that increase is partially offset by an increase in property tax valuation and thus increased tax revenues of about $110,000, or 7.2%.

Much of the increase in revenues comes from the expiration this year of a tax increment financing agreement granted many years ago for the development of the Marketplace at Augusta, which will bring the money from the TIF fund into the city’s general fund to help pay operating costs.

Robertson said the funds coming from the expiring Marketplace TIF account are roughly equal to the new debt service payments due on a loan for the under-construction $20.5 million police station expected to be ready in 2024. City officials, at the time the police station was proposed, planned to use the TIF funds to pay the police station debt service, to avoid it having an impact on taxes. That means those funds would not be available to pay other expenses, Robertson noted.

The city’s tax rate increased last year as well, by 4.7%, the first increase in five years.

Robertson recommended using $2.3 million from the city’s fund balance, an account made up of unspent money from previous years, to help offset the tax impact of the proposed budget. The remaining $6.7 million in the fund balance would still meet the city charter recommendation of keeping 8.33% of the total budget on hand for potential use in emergencies or to pay unexpected expenses.

The budget increase would fully fund firefighter/paramedic positions filled part-way through last year. A total of eight firefighter/paramedics were hired last year, but four of those positions were only filled for half the year. The proposed budget funds the positions for a full year.

The city has applied, for the second time in the last two years, for federal grant funding for 12 new firefighter/paramedic positions, but has not yet heard if either grant application will be successful. Robertson said the budget does not include any projected savings if a grant is awarded and some of the funds from it could be used to cover some of the budgeted firefighter positions.

In Augusta, city councilors approve the city budget, which incorporates county spending and the school budget previously approved by the Board of Education. The school portion of the budget must also be approved by voters in a citywide referendum as part of a June 13 election.