SANFORD — No increase in the tax rate was the goal of the Sanford Budget Committee and on Tuesday, the City Council agreed. The council approved a combined municipal and school budget for the fiscal year beginning July 1 that peg the mil rate at $22.74 — the same as the current rate.

The combined spending plan is $69.2 million, $30.6  million of which is to be raised through taxation.

Voters in the city will get their chance to cast validation ballots on both budgets on June 13.

It is the first time in several years that the mil rate is to remain flat.

The flat rate was achieved through an increase in the use of the undesignated fund balance — comparing undesignated funds to a person’s home budget, that would be savings that aren’t earmarked for some other purpose.

As well, for the first time in 25 years, the budget contains carry-over from the School Department, which contributed to the flat-funding goal. The school will use $400,000 from an undesignated fund balance and a projected $725,000 carryover to help reduce expenses.

The city will use $1.1 million from the municipal undesignated fund balance, up from the $850,000 it has earmarked to offset the budget the last few years, though City Manager Steve Buck said the city has been able to avoid using those funds.

Hoenig said the goal of the budget committee — made up of volunteers and city councilors, was to achieve a balance.

There is increased spending in the budget — overall, salaries on the municipal side are up by nearly $600,000 because the city will hire one new police officer, one new dispatcher and two firefighter/paramedics to meet increasing demand for services. The  salary increase also includes raises for employees. As well, health insurance premiums are up 13 percent, and there are hikes in worker’s compensation and retirement costs. On the plus side, there’s a $185,000 decrease in municipal debt, since the bond for repairs to the Springvale Fire Station has been paid.

Budget Committee Chairman Lance Hoenig told the City Council on Tuesday that the municipal side had budgeted $8.2 million in revenue in 2016, but actually received $10.4 million in revenue, mostly through excise taxes and permitting fees.

Hoenig said the undesignated fund balance is higher than historical levels and relatively high compared to the city’s debt level, though he pointed out the budget includes $422,000 in new school debt and that will increase by another $435,000 in the budget for the following year.

Hoenig said the school has consistently spent less than budgeted in recent years. The budget approved by the City Council will allow for the return of freshman sports and clubs that were cut a few years ago.

Councilor Robert Stackpole, a former longtime school committee member, expressed concern over the use of undesignated funds and carry over in the school budget, particularly because some of the figures are projections.

“To me this is a bit unconventional and concerning,” Stackpole said.

Deputy Mayor Maura Herlihy said the School Department has had  much stronger control over their budget in recent years than previously. 

“This is the year to give a little bit of relief,” said Herlihy.

Hoenig said other school districts in Maine maintain a carry forward of about three percent — and he said school expenses have been significantly lower than budgets over the past few years, a trend he believes will continue.

He pointed out that the School Department was able to pay the city the $1.2 million debt it owed.

“We considered a variety of options” for the budget, Hoenig said. “We wanted to balance the needs of taxpayers, the city and the school.”

While there may be adjustments in the city’s contribution to county taxes and  valuations could change, as currently configured, the tax rate could mean a projected $100 decrease for someone with a home of average value who has signed up for the Homestead Exemption.

Mayor Tom Cote said he hopes the flat tax rate for the coming year will translate into a tax rate reduction in ensuing years.

He said the city is focused on increasing revenue.

“I’m imagining reducing the mil rate over the next couple of years,” he said.

 “I feel confident we’re doing the right thing,” said Councilor John Tuttle as he and the other councilors voted in favor of the budget.

— Senior Staff Writer Tammy Wells can be contacted at 324-4444 (local call in Sanford) or 282-1535, ext. 327 or twells@journaltribune.com.