References to it being a “rainy day” came up several times during the last scheduled work session on the 2010-11 Belfast municipal budget, as the City Council recommended taking $620,000 from surplus in order to hold last year’s bottom line.

Under the proposed budget, the mill rate would remain at 18.1 (dollars per $1,000 of property value). The mill rate calculation includes the school and county budget appropriations. According to City Treasurer Rickie LeSan, the county share dropped by roughly $15,000 this year, while the school portion increased by around $31,000.

LeSan said the Council originally proposed taking $300,000 from surplus. At the end of the budget work sessions, however, the budget was up $142,000 and there was $178,000 that the city received from the school district last year because of a state accounting error that was used to offset taxes last year, but would not appear in the budget this year.

City officials blamed a drop in revenues from state revenue-sharing and excise tax for a major shortfall in this year’s budget. The city also increased spending in several areas, including the hiring of a new economic development director ($62,000 with salary and expenses), increased spending on promotions (up roughly $23,000) through Our Town Belfast and the Belfast Area Chamber of Commerce.

Social service spending is up $7,000 from last year and General Assistance increased by $20,000 to an estimated $90,000 for the coming year.

The Council cut a number of expenses from the budget, including a $50,000 reduction to the road construction budget and the near elimination of the “reserve fund” required under the city charter, from $10,000 last year to $100.

The police department will get one less cruiser than requested, cutting $28,330 from the budget bottom line.

LeSan said insurance costs were down since the city switched to a new carrier, and debt service was down because the city recently paid off several notes.

The cuts, however, still left the city over a half-million dollars in the hole. To make up the difference, the Council has favored taking the money from the city’s roughly $3.1 million surplus.

“It’s a rainy day. It’s time to spend that money,” said Councilor Marina Delune June 29. Delune added that the surplus had been increasing and that she didn’t want it to continue to do so indefinitely.

Delune said taking money from surplus should be done this year with the caveat that it cannot happen every year.

Opinions on the purpose of the surplus were split among the Council, with some seeing it as a safety net to be used in tough economic times like these, and others of the opinion that it was safer to leave it untouched and cut from city expenditures first.

Councilor Lewis Baker said he had mixed feelings about the surplus. On one hand, it’s good to have money in the bank, he said, but having the money available makes it more likely that the city will spend it on things that the Council would not otherwise include in a budget.

Councilor Mike Hurley said he supported making up the shortfall from surplus, but that he wouldn’t be opposed to a tax hike of several tenths.

“You can’t have a first-class library and police department, and fire department, and sewer and cemetery and transfer station and dog park … You can’t have these things and not pay for it,” he said.

Councilor Roger Lee noted that the mill rate had gone down or remained the same for the past five years. During that time, the rate was highest in 2007, at 19.4.

City Manager Joe Slocum said he had typically been conservative in estimating revenues, and that the city did not aim to spend every penny budgeted in a given year. This combination of factors often means there is money left over at the end of the year that is put in the city’s undesignated fund, or surplus, he said.

As an example, he offered the $35,000 the city saved this year on snowplowing because it was a mild winter.

Slocum said the Council’s decision to dip into the surplus did not necessarily mean the city would have a half-million dollars less in the bank next year, because some of that money would likely be replaced at the end of the year.

A public hearing on the budget is scheduled for Thursday, July 15, at 7 p.m. in the Council Chambers at City Hall, with a possible confirmation of the budget at the Council’s regular meeting Tuesday, July 20.