MECHANIC FALLS – Holding the line on town spending and leading a statewide effort to reduce property taxes has earned Town Manager Dana Lee another extension on his contract.

Lee will continue running town operations through 2006, as a result of an executive session with the Town Council this week. Council members approved a 1.5 percent pay raise and a $600 bonus, according to this year’s draft budget. The manager’s salary this year is $54,400.

“All of the council is very supportive of him,” said Council Chairman William Diehl. “People can always go and talk to him, and he’s got a good head on his shoulders.”

Diehl said the council especially appreciates Lee’s efforts in getting property tax relief for residents. Lee serves as president of Citizens to Reduce Local Property Taxes Statewide and vice president of the Maine Municipal Association.

Both groups backed Question 1A on last November’s ballot. The initiative called for the state to fund 55 percent of education costs. It did not receive enough votes to pass but did garner the majority it needed to reappear on June’s ballot.

Lee participated in negotiations with Gov. John Baldacci, which showed some promise of compromise in early January but has since fallen apart. Talks are ongoing with the state Legislature, but the MMA are gearing up for a full campaign, Lee said.

“Dana’s done a very good job keeping our spending down,” said Diehl. “We’re doing all we can to hold our taxes down, but it’s a very frustrating thing to meet all of these state and federal mandates when they’re not funded.”

Currently, the town’s major project is completing the renovations to Town Hall. When the project began last May, the completion date was scheduled for the end of February. While the renovation is still on budget, occupying the refurbished building may be delayed a few weeks, said Lee.