CALAIS, Maine — Voters who go to the polls Tuesday will be asked to not only approve the 2009-10 school budget, but to vote on two changes to the city’s charter.
In years past, the City Council approved the school budget and it went into effect, but not now. Under state law, the proposed school budget must go before voters for final approval.
“I am encouraging voters to pass the school budget,” City Manager Diane Barnes said earlier this week. “It is a very good budget this year. In spite of what is going on in the economy, the superintendent came in with a reduction.”
The municipal and school budgets total more than $13 million, $266,569 less than last year.
Of that, the school budget, if approved by voters, will be $8.7 million or $127,844 less than last year.
Voters also will be asked to approve changes to the city’s charter, which Barnes says would help save the city money.
Question 1 asks voters if they would amend the charter to authorize the “borrowing of money to be paid over a period in excess of five years.”
The reasoning behind the change, Barnes said, was because the current language requires the city to seek an ordinance when borrowing money to be paid over a period of more than two years. “That costs us money when we do that,” she said. “It costs us $2,000 and two years is really a small amount of time to borrow money.”
If voters approve the change, then the city would be able to borrow money for more than five years without having to seek an ordinance.
There are other complications with the way that portion of the charter is now worded, she said.
“An ordinance requires bond counsel and takes effect 30 days after the public hearing and approval by City Council,” she said. “Hiring bond counsel is an additional expense to the taxpayers, and the 30-day waiting period could have a negative affect on the bid price if the lending agency must wait 30 days to close on a loan.”
Question 2, if approved, would make changes to the charter that would allow for more flexible rules when borrowing money.
The change reads, “The City Council, from time to time, may refinance or refund existing indebtedness as it deems appropriate without submitting a proposal for approval by the voters, provided that the refinancing reduces the rate of interest and does not materially extend the term during which payment is to be made.”
The city has three loans through the U.S. Department of Agriculture’s Rural Development program, which, if refinanced, would save the city money.
“All three of them are at 4.125 percent,” she said. “We are looking to refinance through the Maine Municipal Bond Bank, and we are estimating we can do it around 2½ percent. Over the life of those three loans, we are going to save $341,543, which is approximately $17,000 a year.”
If voters approve the changes, Barnes said, she did not see them having any adverse effect on city finances.