ROCKLAND, Maine — City Manager James Smith unveiled his proposed 2012-2013 municipal budget Monday night, a package that increases spending by about 4 percent but takes what he said is a small step toward reducing the community’s debt dependency.
With about a month under his belt as Rockland’s city manager, Smith presented his $10.4 million budget to city councilors. Coupled with a higher proposed school budget, the average homeowner with property assessed at $167,000 will pay an additional $105 in taxes.
The proposed budget calls for a reduction in public library hours as well as a pay freeze for all employees until union contracts are settled.
Smith’s budget message to councilors, however, stressed the need to reduce debt.
“I am saying that we have created a reliance on debt financing. This is known as debt dependency cycle, and management is committed to breaking this dependency and improving the fiscal health of the city,” Smith said to the council at its Monday night meeting.
The amount of debt repayment in the proposed 2012-2013 budget is $988,151. This is up 6 percent, or $55,663, from this year’s budget but down from the $1,128,068 spent in 2009-2010.
The city’s general fund debt is $4.1 million with the majority from work on sewer lines. The city’s wastewater treatment plant — which is paid for through sewer fees — has debts of another $6.9 million.
“By reducing our debt dependency and improving our availability of cash, we are moving the city of Rockland toward a stable rate of taxation. This goal is most valuable to the small businesses, entrepreneurs and those living on fixed incomes,” Smith said.
The proposed $10,397,545 budget for 2012-2013 represents a 4.2 percent, or $420,581, increase from the $9,976,964 budget approved last year by the City Council.
Increases include the $55,663 in added debt payments, $48,000 more for employee health insurance, $48,000 more for employee retirement system contributions, $25,000 more in general assistance, and $20,000 more for fuel.
The city also projects it will lose $89,000 in state aid.
The city manager said until union contracts are settled there will be a pay freeze for all employees. The manager’s budget also calls for restructuring health insurance programs although no specifics were included in the written budget.
The budget also includes $134,433 in contingencies.
The budget calls for cutting library hours from 67 to 61 per week.
Last year, then-City Manager Rosemary Kulow called for eliminating Sunday hours at the library. Library supporters voiced opposition to that plan and councilors agreed to add money to keep the library open on Sundays.
The budget calls for using $300,000 in surplus to offset some of the higher expenses and reduced state aid.
With the use of surplus, the amount of property taxes for municipal operations will increase 3.2 percent, or $196,996, reaching $6.44 million.
The tax rate is proposed to increase from $18.78 to $19.41 per $1,000 of assessment. Average homeowners will see their annual tax bills rise from $3,136 to $3,241. The majority of the tax hike is due to an increase in the city’s share of the Regional School Unit 13 budget.
The largest account in the proposed municipal budget is the Police Department at $1.99 million, which is up 4 percent. The Public Works Department budget is proposed at $1.65 million, up 4.6 percent. The Fire Department budget is proposed at $1.5 million, up 4.3 percent. Lights and hydrants are proposed at $601,000, up 1.3 percent. The library is proposed at $592,000, down 1.5 percent. The Recreation Department is proposed at $380,000, up 1.5 percent.