OLD TOWN, Maine — The city of Old Town is facing a significant shortfall in its proposed budget that could result in property tax increases and cuts to services, an official said Friday.
Old Town has a shortfall of more than $1 million due to cuts in state revenue sharing, lost revenue from the Juniper Ridge Landfill, and a proposed increase in the budget, according to Old Town City Manager Bill Mayo.
The current budget for Old Town is $8.4 million, while the proposed budget for next year is $8.6 million.
Mayo said Old Town has a revenue decrease of $516,390, plus a proposed total increase of $274,082 for the city, school and county budgets. There’s also a projected loss of $264,040 from cutbacks in state revenue sharing for a total of $1,054,512.
A 5 percent increase in the tax rate would recover $440,000, but the city would still need to cut services and/or personnel to make up the remaining $614,512. Old Town’s mill rate is currently $18.69 per $1,000 of property value. Next year, it could jump to $19.52.
“Potentially there could be cuts, and it will affect every department in the city,” Mayo said on Friday.
Mayo said he’s met with personnel in several departments to tell them of potential cuts the city council could make.
“I’ve talked to council members and a number of personnel who could be impacted,” he said.
The city had already cut 11 full-time positions in the past two years, he said.
The council could use the city’s fund balance to help offset the shortfall, said Mayo.
Part of the reason for the more than half-million dollar revenue decrease was due to lost money from Juniper Ridge.
The city of Biddeford and Casella reached a $6.65 million deal in August of last year to shut down the Maine Energy Recovery Co. incinerator — resolving a quarter-century of complaints from residents about the smell and truck traffic created by the downtown facility — and put the building in the hands of the city.
“When Biddeford bought [Maine Energy Recovery Co.] out, that ash used to come here to Juniper Ridge,” explained Mayo. “Juniper Ridge is currently trying to get their expansion. They haven’t received it yet. As a business decision, Juniper Ridge is looking at where these 16 towns that were serviced by MERC are going to go if we can’t take it here. By doing that, we lose between $35,000-$40,000 a month in revenue from the landfill.“
The Old Town City Council will meet to discuss the budget at 7 p.m. on Monday. Mayo said he expects a large turnout.
“There’s room in there to seat 60 people, and I’m sure every chair will be full and there will be people standing out here in the hallway,” Mayo said. “When you start talking about cuts … everybody is going to have a dog in the fight.”
The council will have to make some tough decisions, he said.
“They’re going to have to decide on leisure services or health and safety services or wherever they go. At this point, I have no idea where they’re going to go. I’ll give them a list and that’s what they’re going to talk about.”
Mayo decline to give specifics on cuts he will recommend.
Two public hearings will be held after Monday’s meeting and then the city council will vote to approve the budget.