The Belfast City Council signed off on a 2010-11 budget July 20 that would borrow heavily from surplus in order to maintain the current tax rate.

The city would levy $4,295,117 from property taxes, and add $620,000 from surplus to fill an anticipated shortfall in revenues.

“We won’t be able to do this indefinitely,” said City Manager Joe Slocum, “but everybody thought these are tough times and we need to hold the line.”

Slocum attributed the need to borrow from surplus to shrinking state aid. The city lost $252,000 in state aid from 2008 to 2009 and will likely lose a similar amount this year, he said.

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.

Slocum called the decision to use city surplus to offset some expenses related to the school system an “unusual twist,” but said the decision was necessary to avoid increasing taxes.

“It’s not about the schools, which we love. It’s not about the county, which we respect. It’s about the taxpayer,” he said.

In other business, the Council:

• Accepted the resignation of Code Enforcement Officer David Studer, who will serve until Oct. 15 under an extended appointment. Studer has served as Belfast CEO for eight years. In June he was selected as Code Enforcement Officer of the Year by the Midcoast Code Enforcement Officers Association.

• Heard from City Planner Wayne Marshall that a pair of lawsuits against the owner of the former Stinson Seafood property is underway. The city is seeking a court decision on it’s December 2009 demand that the skeletal building at the north end of the property be demolished. A second lawsuit seeks clarity in the contract rezoning agreement between the city and property owner. Marshall said a first hearing, scheduled for July 20, was postponed until Aug. 6.

• Heard from City Manager Joe Slocum about a feasibility study done by single-stream recycling service ECoMaine. Slocum said transportation costs to bring Belfast’s recyclables to the company’s Portland sorting facility would be prohibitive. “If such a facility was to someday be built in Bangor, the numbers might work out,” he said.

• Voted to allow the city to exceed the state’s L.D. 1 property tax levy limit of $4,305,007. Slocum said the vote was a precaution, and that it was unlikely that reductions in state aid would exceed the half-million-dollar difference between the $3.7 million net budget used in the L.D. 1 calculation and the $4.3 million L.D. 1 cap.

• Approved a request by American Veterans AMVETS Post 6829 to sell sealed tickets (games of chance) during the group’s picnic and Civil War encampment in City Park Aug. 22.

• Staggered the terms of sitting Planning Board members to prevent the entire board’s terms from expiring simultaneously. All seven members of the board were present Tuesday night. At the suggestion of Councilor Roger Lee, the board members blindly drew slips of paper from a cup. The slips indicated the year, between 2011 and 2015 when the members’ terms would expire: Biff Atlass (2011), Roger Pickering (2012), Paul Hamilton (2013), Diane Allmayer-Beck (2014), Elizabeth Minor (2015).

• Voted to allow city employees to borrow against their retirement savings, after a request by a city employee.

• Voted to require property owners to pay late fees on their tax bills, even when they claim not to have received the bill. The vote was in response to a request from a property owner not to pay a $23 late fee, because he or she claimed not to have received a bill. Asked how late the payment was, City Treasurer Rickie LeSan said 8 to10 months. “After eight months, you figure, if you didn’t get your tax bill, you’d better come in and get it,” said Councilor Lewis Baker. The Council rejected the complaint and extended that rejection to all future lost-in-the-mail pleas.

• Approved a request to sell a piece of foreclosed real estate to family members of the property owner for the amount of money owed to the city in back taxes and interest. Slocum described the one-acre parcel as being surrounded by land owned by one family. The property owner “left town,” and could not be reached by the city or family members, he said. Several councilors expressed some hesitation about circumventing the city’s normal bid process, but the vote was unanimous in favor.