HALLOWELL — After a majority of councilors rejected a $7.7 million municipal budget Monday night, officials retook the vote and approved the spending plan following a speech by Councilor Kate Dufor and reassurances from other members that it was a “good budget.”
“It was unusual,” said City Manager Gary Lamb. “But it was a nice gesture — there was a lot of good work done on the budget, and people understood that.”
Ahead of Monday’s vote, the budget was projected last month to carry the largest property tax increase in at least a decade, at 9.2%.
Councilors said they reduced the expected tax increase to about 4% by cutting expenses and applying revenues from various sources, including $573,000 generated from the city’s downtown Tax Increment Financing, or TIF, district.
The final $7,719,532 budget allows Hallowell to buy a plow truck and excavator and make its first payment on a loan used to purchase land for a new public works facility. Rather than fund a fifth public works position for a full year, officials decided to fund it for part of a year starting in January.
The budget is 4.47% higher than last year’s budget of $7,388,927.
Councilors initially rejected the spending plan on Monday in a 4-2 vote, with Maureen AuCoin and Ryan Martin the only ones in support of the plan.
Dufor abstained from the initial vote, then moments later addressed the council, saying it was important to reach an unanimous decision.
“Nobody is getting everything they want, and nobody is getting everything they need and there are elements of this budget that we (aren’t) necessarily here for,” said Dufor, who is also the director of advocacy and communications for the Maine Municipal Association. “But I think we need to present a united front. I think we have done as much work as we possibly can, so I’m calling on all of us to support the budget to take those leaps of faith, because we have made some cuts, we’ve agreed to the inclusion of new positions without really knowing what that might entail, so I would again ask whoever voted against this motion to ask for reconsideration so we can adopt this budget in unison and move forward. ”
The council then unanimously voted to reconsider the budget.
During the second budget vote of the evening, councilors Peter Spiegel and Michael Frett decided to support the spending plan and Dufor voted also in favor of it, allowing the council to pass the budget by a vote of 5 to 2.
“I think Kate’s speech helped,” said Mayor George Lapointe. “We have new members and there were numbers that were not exact like revenue sharing, taxes, etc. People just needed a little time to reflect. A combination of myself and other people saying that it is a good budget helped.”
Councilor Patrick Wynne and Berkeley Almand-Hunter opposed the spending plan in both votes.
“It’s a good budget. Out of all the budgets I’ve worked on, this does the best on capital improvements,” said Wynne. “But I voted against it because I felt there were still some numbers we could recheck. (I had) questions on relatively small number changes, and I felt the public wanted a little bit more time with the council to go with the budget.”
Almand-Hunter could not be reached for a comment.
Maureen AuCoin, who had voiced concerns that the tax increase projected last month would be too much of a burden for property owners, said the latest plan is more favorable.
“This budget maintains and enhances a quality level of municipal services for our citizens,” said AuCoin, who sits on the finance committee. “In the future, I remain committed to pursuing new sources of revenue and better utilization of tools for economic development to lower the tax burden on our residents.”
Although a new projected mill rate from the assessor won’t come until the end of the week, Lapointe said the council is expecting the increase to be within 4% — less than half of the initial 9.2% projection last month.
At $23.10 per $1,000 of assessed valuation, the proposed tax increase would add $197.73 in taxes for the owner of a home with the median value of $219,700.
Lapointe said officials were mostly able to reduce the tax increase by using money generated from the city’s TIF districts. These districts, designed to encourage economic development, allow municipalities to keep the property taxes generated by new projects within a designated area. This sheltered amount does not count towards the state’s municipal valuation, meaning the amount a town or city receives through revenue sharing is not affected when its valuation goes up.
The city used $573,000 from the downtown TIF district to lessen the tax impact of the new budget, Lamb said. The money earmarked for the downtown TIF district in this year’s budget is 46.1% higher than last year’s $353,364. The TIF reserve currently contains $400,000, according to AuCoin.
She added that $236,000 was taken from the accrued state revenue sharing funds to “alleviate the fiscal impacts on the taxpayers.”
Several items listed in the budget are planned to be partially financed through TIF reserve funds. The new $165,000 plow truck, a $125,000 excavator, a police cruiser, the costs of maintaining roads, buildings and equipment and 50% of the first down payment for the public works property on Pinnacle Drive will all borrow from the TIF reserve, having no tax impact on residents.
Another fortunate turn was the surplus the town received through state revenue sharing which was projected to be $486,859 but the actual amount received was $536,421.
“Hats off to the finance committee, who found a balance between expenses and revenues to bring us closer to our goal,” said Lapointe. “No one likes the increase, but it is going to help us provide residents with services they need while balancing the tax impact.”
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