AUBURN – The City Council is one step closer to approving a 2.7 percent budget increase.

Councilors approved the first reading of their $64.9 million budget for the new fiscal year on first reading Monday night. That amounts to a $1.72 million increase in spending overall compared to the current fiscal year, a 2.72 percent increase.

They’re scheduled to vote on it at second reading at a special meeting June 11.

Laurie Smith, interim city manager, said the new budget will mean a property tax increase of about $8 per year on a $125,000 home, based on last year’s property values.

“If we can walk away from this budget and agree that it represents our values, then we’ve done our job,” Councilor Ellen Peters said. “I’m happy with this budget.”

The budget included an additional $10,000 to provide police support to festivals, bike races, parades and marches. Councilors were considering a deal to split the cost of police officer overtime with event organizers. Councilors eventually turned that idea away, saying the events are good for the community.

Councilors also adjusted the emergency reserve fund by $273,000. That’s money the city sets aside to pay for capital goods or in case of emergency. This year, councilors banked $326,900 in the fund, almost half of what they set aside last year.

Councilor Eric Samson acknowledged that he’d like to increase the reserve.

“But I know of several councilors that would still like to trim $200,000 more from the budget,” Samson said. “So, if we could find another $200,000 would we put it in the reserve or pass it along to taxpayers?”

But Ward 5 Councilor Ray Berube said there was still work to be done. Councilors still have to decide on property revaluations.

“Considering that what we decide could increase taxes another $200 to $900 per home, this is a just start,” he said. “I’d suggest that we need to keep budgets down like this for the next four or five years to really give them some relief.”

Last year, the City Council decided to phase property values in, setting citywide assessed values at 80 percent. Councilors this year are faced with doing the same thing or taking the full property revaluation.

Several people Monday made the case for going to full value.

“If we go to full value, people will be able to figure out their tax bills,” said Dan Herrick of 470 Hatch Road. “If we go full value, then we just have to keep control on spending to keep our budget in line.”

Mayor John Jenkins congratulated councilors and city staff for hard work during his comment period.

“We are in good hands, we are in good order and we have a very clear direction because this council has worked hard to hear each other,” Jenkins said. “Although agreed on a number of issues, we agreed on one thing for sure; we are listening.”