Loss of revenue sharing funds
would impact local service
By Kathy McCarty
Staff Writer
PRESQUE ISLE — City Manager Jim Bennett and Finance Director Pat Webb met with councilors for a workshop Monday night with the goal of brainstorming how to address the shortfall that may result, should the state withhold revenue sharing and other funds local officials had factored into the 2013 municipal budget. The city could face a loss of between $200,000 and $300,000, based on decisions made in Augusta as lawmakers work to set the state’s budget.
“We knew there’d be tough decisions. We’re one of the few in the area and probably in the state that hasn’t seen a tax increase in the past few years,” said Bennett. “It seemed to make sense to have the budget discussion now. We’re looking at a loss of about $200,000. That still may be off — depends on what comes in from the state.”
Working with city staff, Bennett said he was able to come up with about $400,000 in cost-cutting alternatives.
“My suggestion is we look at these and talk about them but not take any real action until we know a definite number. Just take these under advisement,” said the city manager.
Bennett provided councilors with a list of the options and the amounts each would save. They included:
• Deauthorize airport allocation (changes to overtime due to schedule), $5,000;
• Higher building permit revenue (negative because a revenue item), $25,000;
• Increase excise tax revenue, $7,500;
• Police turnover credit (due to new hires being paid at entry-level rate), $3,000;
• General government, $4,500;
• Public works operation investments, $5,000; and
• Capital reductions: Industrial Council, $10,000; Presque Isle Fire Department, $5,000; City Hall, $5,000; Police, $2,500; downtown, $2,500; and Public Works, $5,000. Capital deferments total $30,000.
Bennett also discussed changing all employees to post-1996 benefit rates, which would cut $15,000; implementing one furlough day for a savings of $6,000; going to a 35-hour work week for non-essential staff (not including salaried employees) for a savings of $90,000, and including salaried personnel in the above reduction would result in an additional cut of $45,000.
Bennett and Webb also discussed the possibility of deferring one year of funding to the emergency fund, which would eliminate $91,550 from the budget.
The three items garnering the most discussion were the indoor and outdoor pools and funding for the future purchase of a fire truck. With regard to the pools, Bennett said cuts to either would affect employees and the services they provide.
“Not opening the outdoor pool would save $30,000. That would be a one-time deal. If you decide to close the indoor pool, that would be a $50,000 savings for a half year. With the exception of shutting down the pool, there’d be no layoffs but it would impact employees,” said Bennett.
If all these reductions are approved by councilors, Bennett said $407,550 could be cut from the municipal budget.
Councilors Craig Green and Micah Desmond raised questions about the pool with regard to who uses it and if using the University of Maine at Presque Isle’s pool might be an option for citizens. Chris Beaulieu, director of the Park and Rec Department, said he was more concerned about (swim) lesson numbers rather than general use. Bennett indicated it had been some time since city officials talked with UMPI officials about the pool.
“UMPI’s pool isn’t long enough to hold official meets. The decision (to close the indoor pool) will have an impact on having competitive swim meets in the community,” said Bennett.
Bennett said it would likely be at least two to three weeks before this issue would be looked at again, “until we hear back from Augusta.”
The city manager gave councilors one last alternative that would have no impact on staff but would affect the future purchase of a fire truck. The PIFD is looking to replace an aging tanker truck by 2014, with funds already set aside for its purchase and more money going into that account annually. Bennett suggested not putting the full amount in as well as taking some out — about $175,000.
“You’d have to come up with the money or finance the purchase in 2014,” he said, noting councilors would have a better idea what the new truck would cost later this year.
“In July you’ll have to come up with specifications to go out to bid. In October bids should be back, so you’ll know what the cost will be. It takes eight months to a year to have the truck built,” said Bennett. “That’s the only way to have a truck for next year so as not to get stuck with one pumper next year.”
The school and county budgets will also factor into what, if any, cuts councilors ultimately make, but Bennett said those figures won’t be known for a few weeks yet. “The school budget goes to referendum in June. A rough number of $1 million is shaping up for their shortfall. They’re in the same boat as us — facing about $300,000 increase for insurance. Southern Maine has stabilized, while northern Maine’s insurance is going up due to insurance changes implemented last year,” said Bennett.
“The impact at the local level, if (the school’s budget) goes up $1 million, it would mean an $800,000 increase to the municipal budget, or 80 cents on the tax dollar,” said Bennett.
Bennett told councilors to consider the options, with discussion likely continuing on the matter at their next monthly meeting, slated for Monday, May 6, at 6 p.m. at City Hall.
In other business, Bennett told councilors there “appears to be bond money available for some projects that are shovel ready, including riverfront and downtown community development.”
“Our Community Center will qualify,” said Bennett, noting it will take about four months to prepare documents to apply. To do so, Bennett said about $250,000 would be needed to pay Architect Mark Carter to prepare the necessary documents. He suggested putting the matter on Monday’s agenda for further discussion.
“The problem is we’re trying to cut here and there, but looking at money to fund this,” said Desmond.
“The problem is the state didn’t allocate here (city’s revenue sharing), they allocated there (bond money for development projects). They obviously thought it was more important for riverfront development than revenue sharing,” said Council Chair Emily Smith.
