Belfast City Manager Joe Slocum doesn’t have a lot of good things to say about the next municipal budget cycle.
With challenges that include decreasing municipal revenue and increasing expenses, city councilors will have some hard decisions to make as they come up with a budget that he doubts will make anyone happy. The budget process needs to be completed by mid-July.
“There’s no question at all that people will notice,” Slocum said of the expected cuts to services. “This is a very challenging and difficult budget.”
In addition to those annual challenges, a new strain — related to a former resident’s death — is adding stress to this year’s budget deliberations.
The city has a budget of about $10 million and receives a little less than $5 million in nonproperty tax revenue. The rest of the money required to run the city comes from property taxes, although the lion’s share, or 69 percent, of Belfast’s property tax bill pays for the city’s portion of Regional School Unit 71 and Waldo County budgets.
City officials have worked aggressively in recent years to keep the municipal budget in check.
“They’ve picked the carcass,” Slocum said.
But this year, he believes, something will have to give, and not in a way that taxpayers are going to appreciate.
In large part, revenue losses are to blame. In recent years, Belfast has lost $500,000 annually in state revenue sharing, Slocum said, and in the past two years, the city has seen its property tax rolls decrease by another $500,000 because of the devaluation of the Bank of America campus.
But there is another, more unusual reason why the challenge faced by the city seems so acute, the city manager said — an estimated $265,000 loss in ambulance revenue. A portion of that is caused by Medicare stopping its previous practice of reimbursing the city for return ambulance trips, because those are now deemed not to be medically necessary. The largest part of the decrease in ambulance revenue, though, derives from something no one had foreseen.
“One of the things we didn’t realize is that our revenues were impacted heavily by one person,” Slocum said.
That person, a Belfast resident who was on dialysis, went back and forth to the hospital by ambulance a couple of times a week. That individual was single-handedly responsible for $200,000 worth of ambulance receipts, and when the person died, the city’s bottom line was affected.
“If we’ve learned anything from this, it’s that we’ve got some volatility,” Slocum said. “One person can have an impact.”
On the other side of the ledger, one expense now being borne by property taxpayers is the cost of a lawsuit filed against the city by two neighbors of Nordic Aquafarms’ proposed salmon farm. Slocum said that the last legal bill he paid was for $20,000, and he expected to pay at least $30,000 more before the suit, which is still in the discovery phase, is decided.
“No matter who you are or what enterprise you run, you are subject to being pulled into litigation,” the city manager said. “I’ve been here 11 years, and we’ve had a couple of litigations, but nothing quite like this. Nothing this expensive.”
Additionally, the city has some mandatory increases in expenses to contend with as councilors work through the budget. Those include an additional $50,000 for health insurance for city employees and $96,000 in salary adjustments for police and public works employees.
Slocum said that after years of no — or minimal — cost-of-living increases for those workers, the city found that it is now underpaying them. A survey showed that Belfast police officers were paid as much as $5 less per hour than officers working in comparable municipalities, which contributed to staff departures. It’s a problem that is being addressed in the next employee contract.
“The same property tax bill was paying [Waldo County] Sheriff’s Office employees more per hour than our police officers,” he said. “There’s no justification for that.”
Slocum goes through the numbers in more detail in his 2019-20 budget message, posted on the city’s website. In the message, he points out that if the budget passes with all the requests from department heads intact, it would mean that the city would have to raise an additional $776,000 from property taxes.
“I do not know a soul who wants to see that kind of increase, especially considering that it is highly unlikely that county taxes and school taxes will stay the same this next year,” the manager said.
To avoid it, though, the city likely will need to do two things: increase non-property tax revenue, such as transfer station fees, auto excise taxes, harbor fees and more, and cut the budget.
Slocum said he is reluctantly making recommendations such as eliminating one patrol officer position that is currently vacant, eliminating a vacant truck driver position from public works and cutting the position of a part-time library assistant, a position that is filled.
The cuts won’t stop there, he said.
“No one should expect this to be easy. It will not be easy,” Slocum said. “I think the whole community’s got to talk about it.”