2016-04-01 / Front Page

Tax bills to rise 6.2 percent

By Wm. Duke Harrington Staff Writer

KENNEBUNK — If the town budget for the coming fiscal year, to start July 1, is approved by voters, it will mean a 6.2 percent increase in property tax bills.

That hike is based on an anticipated 1.5 percent increase in Kennebunk’s share of the York County budget, a proposed $44.53 million school budget unveiled March 21, and a $12.65 million municipal budget finalized at the most recent selectmen’s meeting on March 22.

That session was the final opportunity for selectmen to enact changes to town spending, but all seemed satisfied with the spending plan. Also seemingly content are residents. A public hearing on the municipal budget at the March 22 meeting drew no public comment.

Kennebunk’s gross budget increase comes to $990,078 (or, 7.7 percent) to $12.65 million. That breaks down as $4.08 million for general government administration, $3.84 million for public safety, $2.99 million for public services (i.e. the highway department), $760,000 for debt service, and $553,819 for the library.

However, after accounting for anticipated revenue during the year, from excise taxes and other fees, plus state revenue sharing and $100,000 taken from the town’s undesignated surplus fund to help reduce taxes, the net budget for the coming year rings in at $8.45 million – up $779,728 (10.2 per- cent).

According to Town Manager Barry Tibbetts, he and the town’s financial director, Joel Downs, have penciled in a 3.2 increase in revenues, to $4.1 million. This includes the expectation of an extra $75,000 in excise taxes (to $1.96 million), as well as an additional $25,000 in beach parking permits sold to non-residents.

Downs said state revenue sharing, the town’s share of the state sales tax, is pegged at $375,000, while Kennebunk can count on state reimbursements of $150,000 from the homestead tax exemption program and $200,000 on business equipment taxes.

With all that revenue, it may seem counter-intuitive that the year-to-year increase in the town’s net budget is larger than the jump in gross spending. However, the increase is due to the addition of $435,000 to the budget – money that, if voters approve a separate warrant article, will be used to eliminate the town’s unpopular pay-as-you-throw (PAYT) model of trash collection.

That program, in place for more than a decade, requires residents to purchase special bags for curbside collection of their household garbage. Instead, selectmen, who initially voted 5-2 to end the program last month, before immediately reversing themselves and deciding to send the question to voters, are asking residents if they’d rather just pay for the trash pickup as a municipal service via their property taxes.

Tibbetts said the $435,000 figure includes roughly $289,000 to have Pine Tree Waste collect residential trash while the rest is made of “tipping fees” the town pays each time a trailer full of refuse is hauled from the transfer station on Sea Road.

If approved at the town meeting budget referendum in June, the trash change will also result in a warrant article Kennebunk voters have seen only once since 2005, when the state Legislature began requiring approval for a municipal budget to outpace the annual growth in local incomes and total town-wide property values.

If the PAYT program is eliminated, the move into the budget of $435,000 now mostly covered by bag fees – mostly, because PAYT has run a deficit in all but one year of its existence, including $87,000 this time out – will put the town’s FY 2017 budget $247,230 over the so-called LD1 spending cap.

“We’ve always been really careful about even coming close to that tax levy limit,” Tibbetts said.

“If the town doesn’t vote to increase the limit, we’ll have to find the difference in some other manner,” Downs said.

Also ringing in on the expense side of the ledger, all town employees in Kennebunk will enjoy average wage increases of 1.5 percent. Meanwhile, the bottom line on manpower will grow 3.8 percent with the hiring of an info-tech assistant, a public services truck driver and two new firefighters, plus part-time and summer help in both the highway and fire departments.

Tibbetts said the IT person is needed because, at present, the town has just one person to manage a network of 109 personal computers and nine servers, in addition to mobile units used by the fire and police departments.

“We’ve found that when we’ve tried to outsource some of that we still don’t have the manpower to maintain everything in the manner we want,” Tibbetts said.

Given the increases to both school and town budgets in Kennebunk, the tax rate is pegged to increase 95 cents, from $15.30 to $16.25 per $1,000 of assessed property value. This assumes the school and county assessments come in as currently proposed.

The municipal share of the new mil rate is slated to jump 43 cents, from $3.52 to $3.95 per $1,000 of assessed value – an increase of 12.22 percent.

The bottom line of these numbers is that, as currently proposed by both the school district and the town, the annual property tax bill on the median single-family home in Kennebunk, assessed at $250,000, will ring in at $4,063. That’s a $238 (6.2 percent) increase over the current tax bill of $3,825 on that same home.

Falling outside of spending covered by the tax rate is $954,000 to be taken from the town’s general fund. Of that, $452,000 will be used to fund capital projects and vehicle purchases, $340,000 will go into a reserve account to cover current and future bond payments, helping to smooth the hit of initial payments, while $87,000 will be plugged in for the PAYT deficit.

In the budget, but mostly affecting tax rates in future years, will be a $2.57 million bond voters will be asked to approve.

Of that, $1.5 million will be spent on paving projects and road repairs, while $500,000 will go toward bridge repairs and roadside drainage work. That bond will be for 10 years, at an expected 3.25 percent interest rate, meaning annual payments of about $235,000.

The remainder of the bond – $570,000 – will be used to buy a new ambulance, a new dump truck, two buses for the recreation department and a backup system for the town’s computer network. The $570,000 will be bonded for five years, at the same 3.25 percent interest rate, equating to annual payments of about $125,000.

A second public hearing on the budget will be held at the May 24 selectmen’s meeting. That will be for informational purposes only, however, as the budget was set by the lack of edits at the March 22 session. That fact that no changes can be made based on any public comment May 24 is underscored by the fact that absentee ballots will already be in circulation, having been made available starting May 16.

The annual town meeting referendum on the municipal portion of the budget will be held on June 14.

Staff Writer Duke Harrington can be reached at news@kennebunkpost.com.

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