WESTBROOK – The Westbrook City Council will be considering a proposal to create a tax stabilization fund that, if approved, would eliminate an increase in the property tax rate this year.

At a meeting of the council’s Finance Committee on Monday, councilors received the 2011 audit report from Tim Greene of Roberts and Greene, the firm that conducted the audit for the city.

The audit showed that while general fund revenues came in about $98,000 below budget, that was offset by the fact that spending from the city’s general fund was about $570,000 below budget, giving the city a positive balance of approximately $472,000.

City Administrator Jerre Bryant said that money would be added to the city’s cumulative fund balance, which is money that the city keeps in reserve for emergencies and unanticipated expenses.

According to Bryant, the city looks to keep a cumulative fund balance of about 14 to 20 percent of the city’s total tax commitment, which this fiscal year should be between $4.3 and $6.1 million. Bryant said that the city has more than $9 million in the account, and he presented a proposal to the committee to use the excess money to help ease taxes.

The proposal that will most directly affect Westbrook taxpayers is the creation of a tax stabilization reserve. Bryant said that the city would initially place about $900,000 in the fund, which would be used to help mitigate property tax increases. In fact, if the council approves the creation of the fund next month, Bryant said, about $183,000 of that fund would be used to help offset a tax increase in the 2012-2013 budget, keeping taxes level with this year’s rate.

In addition to creating a pool of money to help offset tax increases, Bryant said, the administration also wanted to use approximately $762,000 to cover a deficit at the school department. Bryant said while the city and school department have separate finances, it made sense for the city to use its excess money to cover the school debt.

“The city of Westbrook is the unit of government served by the Westbrook School Department and is ultimately responsible for the finances of the school department,” Bryant said. “It is illogical for the school department to raise funds to cover its deficit when the city has an available fund balance.”

School Superintendent Marc Gousse said Tuesday that the deficit was incurred before he took over in March 2011. He said that the question of how the deficit happened was still being investigated.

“It is under review and being reconciled,” he said. “We inherited this and we’re cleaning it up.”

Gousse added that since he has been superintendent, he has implemented a policy for school spending to ensure that the school department does not overspend its budget again. He said that Jeremy Ray, the director of operations, must approve any potential expenditure before it can even be entered into the purchasing system.

Once the request is in the system, Gousse said, a purchase order is generated and he reviews and signs off on every purchase order. After that, he said, it goes to the School Committee’s Finance Committee, where two out of the three members must approve it before a check is issued for the purchase.

“We are tracking everything to the penny on an ongoing basis,” Gousse said.

In addition to the money for the school deficit and the tax stabilization reserve money, Bryant also proposed that the council approve using $1.2 million to pay for the city’s capital improvement program, a move which, if approved, would allow the city to avoid having to borrow money or pay interest for its capital improvement programs in the coming year.

The council will vote on the proposed changes at its next meeting, scheduled for May 7 at 7 p.m. in room 114 of Westbrook High School. The council will also hold its first vote on the combined city, county and school budget at the same meeting. The second and final vote on the budget will be the next Monday, May 14.

During the meeting Monday, former City Finance Director Susan Rossignol addressed the committee, reading a letter regarding some city accounts that she recently discovered still had her name attached to them. Rossignol said she informed the city about the issue on April 4 and then again on April 21, when she saw that her name hadn’t been removed from the accounts.

On Tuesday afternoon, Bryant said that the issue had been resolved and Rossignol’s name was no longer on any of the city’s accounts, adding that no matter whose name appeared on the accounts, there was no way for money to be withdrawn from the accounts in question without his direct authorization.