ELLSWORTH — City councilors Monday approved borrowing almost $2 million for city road improvements, but balked at additional borrowing for storm sewer upgrades.
While councilors acknowledged the need for storm sewer improvements, they raised concerns about the impact borrowing would have on the city’s taxpayers. Tammy Mote, the city’s finance director, presented the council with three funding options: borrowing about $5 million for all of the proposed projects; borrowing $1,872,450 for work on Winkumpaugh and Nicolin roads; or borrowing $2,519,615 for just the storm sewer project.
Issuing bonds for the full $5 million would have added .21 to the city’s mill rate, which now stands at 13.85. The mill rate, or tax rate, is the amount charged to taxpayers for each $1,000 of assessed property value to cover municipal spending. According to Mote, the increase would add about $40 to the tax bill for property valued at $200,000.
All of that added tax would have come from payments on the storm sewer project, according to City Manager Michelle Beal.
Beal explained that the city regularly budgets between $600,000 and $750,000 for road construction projects, a portion of which is dedicated to pay debt service over time on larger projects such as the Winkumpaugh Road improvements. Since those payments already are budgeted, Beal said, they would not affect the tax rate even though the cost of the project was included in the city’s bond issue.
The storm sewer improvements, however, were not included in the road construction budget, so the payments on that portion of the bond issue, about $2.5 million, would have affected the tax rate, she said.
Councilor John Phillips said he was “a bit leery” of adding on a tax increase before the council began its review of next year’s budget. Councilors have not yet seen a draft budget for the next fiscal year, which, according to Beal, is just being completed.
“We’ve been fairly responsible, but last year, after a fairly small increase, I got calls from more people complaining about the increase in the amount of property taxes,” Phillips said. “I won’t vote for anything that adds .21 to the mill rate.”
Other councilors agreed and they voted 6-1 against bonding the full $5 million. That project would have been the first part of a larger project to deal with high water levels in the area around Maine Coast Memorial Hospital.
Beal noted that the state storm drain system cannot handle the amount of water in that area, and many residents near the hospital pay an additional fee to use sump pumps to pump water from their basements into the city’s sewage treatment system. The city plans include upgrading the municipal storm drain system in the area systematically to divert water toward existing storm drains in the downtown area.
With the council’s decision, the start of that multiphase project will be postponed for at least another year.
Councilors, however, supported making improvements to the city’s roads.
Councilor Stephen Beathem argued that the city is not allocating enough money to keep the 100 miles of city roads in good shape.
“If we don’t do a lot more every year, we’re going to have roads disappearing right in front of us,” Beathem said. “We need to bite the bullet and add money [to the road construction budget]. [Spending] $600,000 a year for 100 miles of road is not nearly enough money.”
Councilor John Moore agreed, noting that, “You don’t have to drive too far to find roads we’re not happy with.”
Councilors approved spending $1,872,450 for the projects on Winkumpaugh and Nicolin roads, and approved an additional $20,000 for more design work on the Winkumpaugh project. The projects on both roads will be designed to deal with water issues, including replacing undersized culverts and diverting water away from the roads.