Staff Writer

Taxpayers in Saco will see no increase in their tax bills if the proposed municipal budget is approved by the city council.

City Administrator Richard Michaud said the proposed $19.9 million municipal budget allows the city to avoid layoffs and maintain city services, but does not allow for many capital improvements.

“It’s really a status quo budget,” he said. “There are no improvements of service.”

Michaud said the city council’s goal this year was to create a budget with a flat mil rate. That was accomplished by giving up the capital improvements program and making a “major draw” of $1.4 million from the general fund balance, he said.

The city council held a public hearing Monday night on the budget, but no residents offered comment, Michaud said. He said that did not surprise him because the city budget will not increase taxes.

Finance Director Cheryl Fournier said Saco’s contribution to the education budget for Regional School Unit 23 will be determined when voters approve the budget in a validation referendum later this spring. The RSU 23 regional budget meeting is scheduled for May 24. At the meeting, residents of Saco, Dayton and Old Orchard Beach will vote on individual cost centers and may change the budget amount.

The proposed city budget of nearly $20 million is an increase of 5.9 percent over the fiscal year 2009-2010 budget. A 36 percent increase to debt service costs reflects the voter-approved construction of a new central fire station, as well as roads bond work and trails bond funding. More than $834,000 from the ambulance billing account will be used to pay debt service and other costs associated with the fire department, Fournier said. 

Also in the proposed budget is a 45 percent reduction in capital projects, Michaud said. He said he requested $80,000 be used to address a “serious” erosion issue along the Saco River. Councilors have indicated by consensus they support adding $50,000 for energy conservation and $35,000 as a match for a $200,000 Environmental Protection Agency grant to address pollution on city-owned land on Lund Road. The council will vote on those items May 17.

Fournier said the proposed 5.9 percent increase is offset by a projected 10.4 percent increase in municipal revenue. The city projects a 28 percent increase in excise taxes, largely from an Enterprise Rent-A-Car registering vehicles in the city. The budget also includes a proposed sewer rate increase from $3.60 to $4.25.

While the budget will not lead to layoffs, it also does not allow the city to add new employees. Michaud said a position in the codes office has been left vacant and can be filled if the workload increases.

The council is expected to finalize and adopt the budget at its May 17 meeting at 7 p.m. at city hall. Budget documents are available on the city website,www.sacomaine.org.

Staff Writer Gillian Graham can be reached at 282-4337, ext. 213.