JAY – Selectmen will hold a public hearing Monday on a proposed $6.08 million municipal budget for 2009-10.

They also will hear a request for a citizen initiative to go before voters during the annual town meeting referendum on April 27. The proposal pertains to a $215,199 penalty expected to be imposed by the state for not voting to merge with SAD 36 in a joint school system. Jay schools are anticipating about $1 million less in revenue from the state to help fund operations.

All three towns – Jay, Livermore and Livermore Falls – rejected the measure on Jan. 27.

Jay Budget Committee member Mike Schaedler wants to put the question before voters. He says that since Jay voters chose to accept the penalty from the state when “we voted down consolidation, we admit our responsibility for the fine imposed upon us by the state through the reduction of school subsidy to our school system, and desire to pay for that specific reduction.”

The article offers four options to choose from:

• Have the fine cost added to property taxes as a temporary surcharge and reimburse the school system with the money annually until the issue is resolved.

• Have selectpersons reimburse “our school system for our fine out of our general fund, annually, until the issue is resolved.”

• Have the schools pay 100 percent of the fine until the issue is resolved.

• “Have all of the towns and school departments reimburse the School Department out their budgets, according to their ratio to the town budget and the amount of our fine, annually, until the issue is resolved.”

The hearing will start at 6 p.m. March 16, at the Jay Middle School cafeteria. It will be followed by a selectmen’s meeting that will take up Schaedler’s proposal for the ballot.

The proposed municipal portion of next fiscal year’s budget represents less than a 1 percent increase or $61,619 increase over this year’s budget, Town Manager Ruth Marden said.

After factoring in $3.04 million of anticipated revenues, the net budget would be about $3.04 million, according a comparison expenditure sheet

Most of the increase comes from the town’s Sewer Department and donation requests, Marden said. The sewer reserve account was not funded last year, Marden said.

Selectmen and Budget Committee members recommend voters approve a request to put $27,000 in a capital reserve account for the Sewer Department. The town is facing major sewer costs, including upgrading sewer lines on a section of Route 4 in conjunction with Maine Department of Transportation project.

Also contributing to the higher budget are requests from Spruce Mountain Ski Club’s totaling $20,190.

In addition, to an annual request for insurance on the property, $8,333 in the new budget, there is a request for an additional $5,000 for a heating oil reserve account and $6,860 to help with maintenance.

The club owns the equipment and oversees operations of the property owned by the three towns.