By Rick Wright

Staff Writer

The South Portland City Council is considering a budget that would mean no increases for city property owners for fiscal year 2011.

South Portland City Manager Jim Gailey presented the proposed budget to the council during a workshop Monday. If approved, it would go into effect July 1. 

To achieve a zero percent tax rate increase, the city must find $887,731 in savings. Gailey’s proposal came within $32,355 of that figure according to a spreadsheet he released at the workshop.

Gailey’s savings come from $568,338 in proposed cuts to positions, programs and services; $250,000 in surplus funds and $37,038 from increased fees and bus fares. 

Gailey said he is confident he can find the additional $32,355 before the council gives its final approval at a special meeting scheduled for May 24. 

“None of us like what’s before you this evening,” Gailey said to councilors. It has been an extremely difficult budget for all of our staff,” he said.  

Gailey said the fiscal year 2011 budget would be $1.3 million less than the current municipal budget. 

Finance Director Greg L’Heureux said this year’s municipal budget is $27.5 million.

“I want to express my appreciation to the staff for pulling this budget together. The work you’ve done here is excellent,” said Councilor Tom Blake, who said he favors a zero percent tax rate increase. 

“I think you’re right on target. Good job,” he said.

The budget as proposed would eliminate 7.75 positions, including two firefighters, one police officer and one police detective. Gailey said all of the positions are vacant.

Councilor Jim Hughes was concerned about public safety consequences of cutting four positions from the fire and police departments. 

“I don’t want to see us getting to the point where we’re hurting our core responsibilities like fire and police,” Hughes said. 

The city is expected to save $200,776 in salaries and benefits by not filling these positions, according to Gailey’s spreadsheets.

Additional revenues are expected to be generated by increasing a variety of fees, including ambulance service and bus fares, according to Gailey’s proposal.  If approved by the council, bus fares would increase from $1.25 to $1.50. Gailey’s projectioned the hike in bus fares would garner $13,038 in extra revenues.

“I personally feel an increase in the bus fare is the right thing to do,” said Councilor Patti Smith. “It’s a pretty good deal. I think the increase is valid and I think it’s necessary to make this budget work.” 

City Councilor Rosemarie De Angelis proposed one more cut to the budget – health insurance for councilors.

“It needs to be on the table for consideration as a cut,” De Angelis said. “We cannot save face without putting that out there. It’s not a service. It’s a benefit and it’s one that we could eliminate.”

Health insurance has been offered to city councilors since 1977, Gailey said. Some current councilors participate in the program and some do not.

Last August, the council considered an order to let citizens decide by referendum if councilors should be entitled to health insurance. 

A motion to put the question on the November ballot failed by a vote of 4-2.

If health insurance for councilors was eliminated, Gailey estimated it would save the city $63,000 to $65,000.  

“I think we need to look at increasing revenue. Look at what we gain for $10 per household per year,” said Mayor Tom Coward.

A 1 percent increase in the tax rate would generate an additional $170,000 for the city, according to Gailey’s figures. It would add $9.61 to the annual tax bill for a homeowner with property valued at $216,000.

“Being careful with the public’s money is a good thing to do,” Coward said. “But if we concentrate too much on the bottom line, we lose what makes South Portland, South Portland. Crippling essential services is a false economy. I’m not willing to cripple the city to be able to say I kept taxes level.”

Rick Wright can be reached at 282-4337, ext. 237 or news@inthesentry.com.