SOUTH PORTLAND – After a three-week delay caused by questions over a special reserve fund for the high school construction project, the South Portland City Council on Monday finally adopted an operating budget for the next fiscal year.

“This is the real meat of what we do on the City Council,” said Councilor Tom Coward, who called this year’s budget process “less rancorous than in years past.”

The spending plan that begins July 1 rings in at $69,272,422, in increase of $2.16 million (or, 3.22 percent) over this year’s budget. The new property tax rate tops out at $16.10 per $1,000 of valuation, up 40 cents from last year.

The budget breaks down to $28.08 million for municipal operations (up 3.34 percent), $38.07 million for the public schools (up 1.85 percent), $2.07 million in taxes to Cumberland County (up 0.68 percent), and $1.05 million to a high school renovation reserve fund (up 107 percent).

That latter amount is an appropriate from taxes for future payments on the $41.5 million high school construction bond package approved by voters last fall. School and town officials agreed to begin raising money last year, when they appropriated $506,623, to hold in reserve as a way to mitigate the impact of bond payments on the tax rate, when the annual bills finally comes due.

At the May 16 council meeting, when the budget originally came up for a vote, Al DiMillo, a frequent critic of town and school administrators, and a columnist for The Current, rose a red flag.

DiMillo pointed out that the $1.05 million to be raised for the high school reserve was not part of the warrant posted at polling places May 10, on the day of the school budget validation vote. For that reason, he said, the city could not raise that money on behalf of the schools.

The May 16 meeting broke up after a series of hallway kerfuffles failed to break the stalemate. City Manger Jim Gailey later said attorneys and assessors and cleared passage of the budget.

“That $1.05 million is separate and apart from either the school or city budget,” he said at Monday’s meeting. “It stands on its own.”

With that in mind, DiMillo tried another tact during the public comment period.

“That’s absurd, but that’s fine,” he said, of the fund’s newfound independence.

School officials say the mistake actually occurred last year, when the appropriation for the renovation reserve was shown to be part of the school budget warrant.

“That’s good,” said DiMillo, “because that means you as a City Council control that money, not the school board. “

DiMillo asked councilors to drain the reserve in the form of a rebate to taxpayers, based on his frequent complaint that it is wrong for the school department to carry a surplus year-to-year. Although dedicated to a reserve fund, the appropriation has been referred to by all sides at various meetings as surplus, perhaps confusing it with the budget money left unspent at the end of each fiscal year.

Councilors refused to take the bait, or to even answer DiMillo’s question about why they believe a school surplus is appropriate.

By the time they got to the budget vote, nearly four hours after the start of the meeting, DiMillo, along with everyone else in the audience, had already left.

In other budget highlights, Gailey said he expects the city to generate $9,541,476 in revenue next year, including excise tax ($4.23 million), state revenue sharing ($1.74 million), fees for services ($1.39 million), licenses and permits ($773,450) and investment income ($600,000).

That means the city will need to collect $54.04 million in taxes to support the budget. Gailey pointed out one benefit of the DiMillo-caused delay. Over the intervening three weeks, he and the city finance director had been able to “firm up” revenue projections. With revenue expected to come in higher than originally anticipated, the new property tax rate tops out at $16.10 per $1,000 of valuation, up 40 cents from last year, but down four cents from what Gailey initially intended to collect.

The property tax rate is based on the April 1 state total valuation for the city, $3.36 billion.

Under the new tax rate, a home valued at $200,000 can expect a property tax bill of $3,220. In that case, the four-cent drop in the rate equates to an annual savings of $4.