BREWER, Maine — Steep declines in revenues, a flat citywide property value and increased costs mean city officials are proposing a property tax increase of $1.04, Finance Director Karen Fussell and City Manager Steve Bost said Thursday.

“We’re actually having a mill rate increase — the first in a decade,” Fussell said. “We knew this day would come and we’ve put it off as long as possible.”

The City Council will hold a special meeting 6 p.m. Tuesday to present the city and school budgets to the public.

Brewer has held or lowered its property tax rate for the past 10 years, with this year’s rate set at $17.95 per $1,000 in property value. Under the draft fiscal year 2013 budget, the tax rate would increase to $18.99, Fussell said.

“Everybody’s taxes are pretty much going up across the state,” she said.

“We knew there was going to be an increase, and our job was to keep it as low as possible,” Bost said.

Brewer’s proposed municipal budget is approximately $33.1 million for next year, about $590,000 more than the 2012 budget.

The lion’s share of the increase — around $392,000 — is from increases to the school department budget, Fussell said.

“The city and school both worked extremely hard to offset revenue losses and reduce costs,” she added.

The fiscal year 2013 school budget is $19.98 million, about a 2 percent increase. It includes funding for one half-time gifted and talented teacher, but no others, and maintains all the programs and services now offered, Gretchen Gardner, the school department’s business manager, has said.

The school department is getting about $475,000 less in state and federal revenue, and the city’s state revenue sharing has decreased for the fifth straight year.

“We’ve seen a $450,000 decrease [annually] since ’08,” Fussell said. “I didn’t think it could go any lower.”

Both the school and the city are tapping undesignated fund balances to offset what residents must pull out of their pockets, according to Fussell and Gardner.

The school department plans to use around $1.7 million of its carry-forward funds, leaving about $900,000, Gardner has said, and the city is using $450,000, which is $100,000 less than last year and leaves around $3 million, Fussell said.

Since the city’s property value has decreased slightly over the past three years, “having no change [in the value for 2013] we think is a positive sign” about the economy, Fussell said.

Tax increment financing, to the tune of $1 million, also is being used to pay for the entire economic development department, the Brewer Business and Commerce Park, and for the debt service for both the public safety building and the performing arts center at the Brewer Community School.

“It takes a considerable amount of pressure off the budget,” Bost said.

The city also is seeing increased fuel and retirement costs, and is proposing a 2.5 percent increase to the sewer rate while holding the water rate steady, the finance director said.

The draft municipal budget maintains all city services and doesn’t cut any jobs, Fussell said.

“Overall, we feel very good about this budget,” she said.

Gardner and Superintendent Daniel Lee will present the proposed school budget to the City Council on Tuesday, May 29, and the council is expected to vote on the combined budget June 5.

A school budget referendum is scheduled for June 12, which is the same day residents will cast ballots about possibly changing the city charter to require future school superintendents to be Brewer residents.