AUBURN — Years of financial decisions caught up the city this year, City Manager Glenn Aho told councilors Monday.
Councilors put an end to a difficult budget process at Monday’s meeting, adopting a budget that cuts $537,764 from the first draft of the the 2010-11 budget but would still increase property taxes.
Most Maine cities are in the same situation as Auburn, facing steep property tax hikes, deep service cuts or both because of cuts in state revenue sharing.
Other cities have been able to cut capital projects from their general fund spending or dip into their fund balances to soften the budget impacts.
“But Auburn can’t do either of those,” Aho said. “We bond most of our capital work. We have a $190,000 in the general fund and that doesn’t let us cut much. And we don’t have a big fund balance we can rely on.”
Those are financial decisions city management and city councilors have made for years, he said.
“It’s our own fault,” Aho said. “Our own fiscal policies have put us in this position.”
The current plan relies on using $700,000 from the fund balance to buy down the property tax rate in addition to $537,764 in spending cuts compared to Aho’s original budget. Overall, budget spending increases $356,097 compared to the current budget.
The budget would set the city’s tax rate at about $19.38 per $1,000 of value, depending on the city’s property valuation. That valuation is still pending, but Aho said it should result in a tax rate increase of $1.07. That’s an estimated increase of $135 more for a $150,000 home — the budget actually cuts services.
Councilors began working on a proposed 2010-11 budget in April and directed Aho to find at least $1 million in cuts. He responded with $1.12 million in budget reductions that meant less snow plowing, closing city offices two hours early every Friday, taking police officers out of the schools and having a single polling place for voters.
After reviewing those proposed cuts, councilors changed their bottom line to $400,000 and directed Aho to remove $700,000 from the city’s ongoing fund balance to help buy down the tax rate.
Councilors voted 4-3 to approve the budget, with Councilors Belinda Gerry, Mike Farrell and Dan Herrick voting against it. Herrick said he thought the council could still have trimmed more. Gerry said councilors did not meet often enough to work effectively on the budget.