Staff Writer

 Saco taxpayers will see a jump in their tax bills if the city council passes the proposed $20.6 million municipal budget.

City Administrator Richard Michaud on Monday presented the council his proposed budget, which is a 2.76 percent increase over the current budget. He said the proposed budget maintains service levels in the city, manages rising costs and proposes an “insignificant” capital program.

Michaud also recommends a “major draw” of $1.9 million from the city’s undesignated fund.

“The intent is to maintain service levels and that does require a mil rate increase,” he said.

Michaud said the budget requires a property tax increase of 4.3 percent. The mil rate will increase by 60 cents. That means an additional $120 for the tax bill of a $200,000 home, he said.

The budget does not include any new employees or programs or propose elimination of any positions. The budget does not take into account the school budget, which is approved by voters in Regional School Unit 23 (Saco, Dayton and Old Orchard Beach).

Michaud said the city expects a $1 million decline in excise tax revenue.

“That loss of income is enormous,” he said.

Revenue sharing is expected to decline by $341,000. The budget includes a proposed sewer user rate increase from $4.05 to $4.25.

Budget expenditures include an increase of 1.5 percent for council-approved labor contracts and a 3.75 percent increase in health insurance rates.

Michaud said his proposed budget maintains the capital budget at the current rate of $165,000. Heating fuel and diesel costs are anticipated to rise from $2.45 this year to about $3, necessitating a total increase of $99,000.

“Every day that goes by I’m not sure that number is high enough,” he said.

Michaud said councilors can look at alternatives to the proposed budget, including considering new fees such as pay-to-throw and pay-to-park. He said the council also can explore regional cooperation for services such as dispatch or look at eliminating staff.

Michaud told councilors they could reduce the budget by $1 million by laying off 25 of 158 employees in six city departments. Those cuts could include six employees each in public works, fire department and police department; two positions in dispatch; four positions at city hall; and one position in the parks and recreation department.

“My belief is if you were apt to do layoffs, probably public safety would be the last place you’d want to do,” Michaud said.

Councilor Leslie Smith Jr. said he is “not particularly happy” about drawing $1.9 million from the undesignated fund.

“We have basically milked this thing down. There is nothing left,” he said.

Councilor Eric Cote said budgeting $185,000 for legal expenses is “ridiculous.” He said the city can save money by hiring a part-time attorney to handle simple legal issues, while spending more on legal advice for complex cases. He said the city has to deal with five or six cases each year.

“Most of our work is simple work,” he said.

Councilor Margaret Mills said she recognizes the hard work Michaud and department leaders spent developing the budget. She said everyone is trying to provide the best possible city services.

“It’s going to be a painful and difficult decision making process,” she said.

Councilor Arthur Tardif said he had hoped for a lower budget and thinks serious cuts are needed, even if that means eliminating staff.

“I think it has to be done. We have no choice,” he said.

The council is expected to review the budget in a series of upcoming workshops. Budget materials are posted on the city website.

Also at Monday’s meeting, the council tabled a motion to list the Central Fire Station for sale on the open real estate market for six months. Councilors are expected to again consider the motion following a public hearing at its next meeting on April 4.

The city council recognized the Thornton Academy hockey team for earning the Class A state championship. Each player and coach was given a city pin and the team was given a key to the city.