ELLSWORTH, Maine — City officials are tightening their municipal belts in the face of declining revenues.
Town Manager Michelle Beal said Thursday that the city was waiting to learn how the cuts in the governor’s proposed supplemental state budget would affect Ellsworth. But, she said the city’s overall revenues, including some state funds, already are down 8.5 percent since the start of the fiscal year in July, a total of about $117,000.
That includes significant shortfalls in state revenue sharing and in the motor vehicle excise tax, a key source of municipal revenues. Tammy Mote, the city’s finance director, told councilors earlier this week that the she anticipated a 5 percent decrease in state revenue sharing, which would amount to about a $30,000 shortfall. According to Beal, that decrease would come on top of a $45,000 cut earlier in the year.
In addition, the motor vehicle excise tax has declined by about 10 percent compared to last year. The city generally collects approximately $1.3 million in motor vehicle excise tax annually. If that trend continues for the rest of the year, it would translate into a $130,000 shortfall in that account.
Those funds offset the city’s highway budget and the $1.3 million is earmarked for planned road maintenance and reconstruction ($700,000) and winter maintenance ($600,000). The city’s net municipal budget, not including the school budget, is about $5.7 million.
“A loss of $130,000 would be a big hit,” Beal said Thursday. “Ellsworth has so many miles of road and we’re already behind on road maintenance. I don’t think we could take that from highway. I think we’d have to make it up elsewhere.”
Those shortfalls have been offset somewhat by increases in other revenue accounts, Beal said. The city has seen increases in revenues from city and state licenses and from cable television franchise fees. In what may be an indicator of the current economic crisis, the city also has seen increases in tax and lien interest, she said.
“That’s one place where we hate to see an increase in revenues,” she said.
Although the number of foreclosures was low this year, Beal said the number of liens on property has increased this year.
“We’ve sent out more liens this year than ever before,” she said. “Now, we’re sending out more tax bills, so you would expect the number of liens to increase as well, but the percentage should stay the same. Our percentage is up too.”
In the face of revenue shortfalls, the city is doing a little belt tightening in a budget that already was bare bones, Beal said.
“We made severe cuts in the budget this year,” she said. “We knew the school department was going to need funds, because of cuts in state subsidy. We were reducing the mill rate, so we prepared a really bare-bones budget.”
Beal said the city has postponed some planned maintenance projects at City Hall and other city buildings, projects such as replacing carpeting and creating storage space. Department heads already have curtailed travel and training except where it is essential to maintain required licenses.
City workers also are cutting down their use of office supplies, particularly paper, Beal said. Paper is a big city expense, and Beal said that if they don’t absolutely need a paper copy of a document, “then don’t print it.”
Tightening spending will not affect public safety, Beal said.
“For instance, we’re not cutting overtime for the police department,” she said. “If we did, that would mean that there would be one officer on patrol by himself. That’s not safe for the officer and not safe for the public.”
The same is true for the fire department, she said.
In fact, most of the spending curtailment will not affect the public at all, Beal said. She warned, however, that could change if there are more significant decreases in revenues, Beal said.
“It depends on how deep the cuts are,” she said. “If we lose more subsidy from the state or if excise tax drops by more than 10 percent, then, obviously, we’re going to have to look at cuts that are deeper.”