LEWISTON — The reality of rising costs and spending increases to the tune of $6 million marked the first city budget presentation before the City Council on Tuesday.

City Administrator Bryan Kaenrath presented a proposed budget for 2027, including debt service and county share, of $73.8 million, which is $6 million and 8.7% more than the current year’s $67.8 million budget.

Kaenrath said the proposed budget reflects $4.1 million in cuts from initial budget proposals presented to him by municipal department heads in the weeks leading up to the Tuesday workshop.

“This was a very challenging budget, will be a very challenging budget going forward,” Kaenrath said. “The city of Lewiston is not alone in a lot of these challenges when you look at our neighboring communities and communities across the country. Many are in the same position with regard to increasing costs really all over the place.”

Costs up, revenues down

The city budget process is still in its early stages, but Kaenrath indicated the challenges are on both the spending and revenue sides.

Kaenrath said the budget drivers this year are salary increases, workers’ compensation costs, health insurance rates, retirement, software, county budget lease payments for the police department and the heavy use of fund balance in the previous fiscal year. 

The city is also facing about $1.03 million less in state revenue sharing, Kaenrath said. In all, city revenues have decreased by about 3.7%.

The squeeze comes as the city works to retain staffing levels and maintain existing services while limiting the financial impact on taxpayers, Kaenrath said.

Property values jump

In its first revaluation in 40 years, Lewiston’s assessed value has increased by more than 90%, about $2 billion, to $5.1 billion. 

As a result, the projected tax rate — which includes city, county and school costs — will decrease by about 40%, from $32.78 per $1,000 of valuation to $19.68. 

Individual tax impacts will vary depending on how each property’s assessed value changed in the revaluation. City officials said the revaluation does not increase the amount of taxes collected, it redistributes the tax burden based on updated market values.

Rising costs

Some of Lewiston’s increases in the proposed budget come from costs the city has no control over. 

Among them, Lewiston’s share of the county budget is increasing 20.5%, rising by more than $900,000 to $5.33 million. 

A debt service increase of 13.3% increase, about $1 million, to $9 million is due primarily to the lease on the new Lewiston police station.

Joint agencies increases, about $155,000 for transit and $190,000 for LA 911, total $344,779.

Other increases include nearly $260,000 in supplies and over $1 million in contractual services. Kaenrath noted that some of the increases are due to higher costs for fuel, winter materials, building maintenance and repairs that must be accounted for in the budget.

Over $4 million cut from department proposals

Kaenrath said his office cut about $4.1 million from municipal departments’ submitted budget proposals. 

Savings include the freezing of six new positions totaling $973,214, $250,000 from the Economic Development’s Small Business Grant, $240,000 from salary reserve, and some $445,000 from line items, including electrical repairs to signals, construction materials, highway and street line painting, parks maintenance, Lewiston Armory building upgrades and public art.

Personnel freezes from 2026, including two police officers, three highway workers and one mechanic, will continue into this year, Kaenrath said. The move saves the city from committing some $1.82 million to this year’s budget and increases frozen positions to 12.

Savings from the Lewiston Police Department include $623,504 from the vehicles budget and an additional $59,000 in mobile radio, car cameras and drone cuts.

Savings from Lewiston Public Works, totaling $2.56 million, include less for guardrails, winter operations, sidewalks, waste disposal, parks and open spaces, and the municipal garage, which includes vehicles and shop equipment.

“Our primary concern was not having to go to layoffs, to make sure that positions that are currently occupied with people would continue to be funded for the next year,” Kaenrath said. “None of these cuts are easy, none of them are fun, but it really got to the point of it’s either people in seats or it’s some of these other items.”

Use of reserve funds created new pressure

Another challenge for the city is refraining from the use of its fund balance — its savings account — which the city leaned on significantly for the current budget, Kaenrath said. 

Per state statute, municipalities must keep a ceiling of 12% of its budget and a floor of 8% in unassigned funds. The city stands at 10.05% for a total of $18.7 million, Kaenrath said.

“We had a heavy use of fund balance in the FY 2026 budget,” Kaenrath said. “We don’t have that option, or it’s not recommended for this year to use any fund balance at all.”

The school budget

The Lewiston school budget will increase by about $12 million, or about 11%, according to the district’s separate proposal, which totals $129.7 million. Like the city council, the school committee is still formulating next year’s budget.

The council and school committee will hold a budget workshop at 5:30 p.m. March 16 at the Green Ladle. 

Kaenrath noted that just the city’s operating budget, which is at $55,466,715, would increase by 7.1% to $59,427,720. That amount doesn’t include the county assessment, debt service or the schools budget.

“City side, we’re up 7%, with school we’re up 11%, and county is up 20 (percent),” Kaenrath summarized. “So all these numbers are challenging.”

What’s next?

The council must adopt a final budget ahead of the June 30 deadline.

Kaenrath’s presentation Tuesday reflected the current proposed budget, months before a new budget needs to be adopted. He said there will undoubtedly be changes as the City Council discusses the details at future workshops.

“We’re going to be digging a lot deeper into this. We’re going to have departments here and we’re going to get into a lot more of the details,” Kaenrath said. “This is not an easy budget. Departments are absorbing a lot of cuts, they’re absorbing frozen positions and the outlook is generally difficult. It doesn’t mean we won’t get through this, but with this budget, we have tried to do everything we can to make sure current personnel are maintained in the future budget.”

Lewiston Mayor Carl Sheline said the city’s annual budget process requires a careful and disciplined approach to every dollar.

“We are working diligently to control expenses while protecting the services our community depends on,” Sheline said. “Over the coming weeks, residents can expect open discussions, public meetings, and clear information about how the budget is developed and where resources are being allocated. Our commitment is simple: to be transparent, responsible, and fully focused on delivering a budget that reflects the needs and priorities of Lewiston.”