Facing more cuts to state aid and increased expenses, the Belfast City Council is calling for a 5 percent cut to all municipal departments, recommending a freeze on new projects, and considering a cap on contributions to outside organizations and social service agencies.

Belfast residents have seen no increase to the tax rate for three years, but according to city officials, another zero-increase budget is unlikely.

The city lost $250,000 in municipal revenue sharing from the state last year, according to City Manager Joe Slocum, and stands to lose an additional $150,000 in the 2011-12 budget cycle.

Feb. 1, the Council stood behind Slocum’s recommendation to tell department heads to cut 5-percent from their budgets with the expectation the money would not be restored for three years.

Councilor Roger Lee explained the timeframe – which was proposed at an earlier Council budget workshop – saying within three years the city should expect to see a return of state subsidies to restore funding to those areas cut in the upcoming budget.

“We’re going through a period where Augusta has taken money from Belfast, big time,” he said.

Another issue facing the Council is the anticipated $1.9 million shortfall in the Regional School Unit 20 budget.

Belfast pays around 40 percent of the local appropriation for the school district, a figure that comes in just under $6 million. During the past two years, the Council has ponied up $178,000 out of surplus to offset a gap in the school district budget.

The reasoning has been that city property owners get one tax bill that includes not only city but also county and school district appropriations — in proportions of roughly 35, 10 and 55 percent, respectively. In order to hold the overall tax rate level, the Council was willing to take up the slack for the city’s share of the district’s shortfall.

Slocum expressed strong concern that the RSU 20 Board of Directors currently has two vacancies among the six seats allocated to Belfast on the 18-member board.

“If we lose our influence on the board and we’re paying 40 percent, that can be a dangerous thing,” he said, speaking after the meeting.

Among members of the Council, opinions differed on what to do in the coming year. Councilor Mike Hurley said he is opposed to having the city foot the bill for a larger portion of the school budget.

“I represent the city, not the county and schools,” he said. “I’m not going to hack away at the budget because the school has got a problem. They have to do their job and I plan on doing mine.”

Several councilors argued the school district is facing unfunded mandates and the final tax bill will ultimately be paid by Belfast property owners. Hurley later said he was under the impression the city was considering paying more of the school district budget than its regular share.

On the question of what to contribute to outside groups and social services, the Council has yet to make a decision. In the past, groups made requests to the city and group representatives have typically presented supporting evidence and arguments during the Council’s budget hearings.

According to Slocum, the Council discussed capping the overall pool of money allocated to outside organizations and social service agencies at a preliminary budget workshop.

At the Feb. 1 meeting, the city manager recommended streamlining the application process for outside groups by having a standardized form, rather than opening the budget hearings to the sometimes lengthy presentations by representatives of each applicant.

Dates for the Council budget hearings have yet to be announced.

In other business, the Council:

• Reappointed City Assessor Robert Whiteley to a two-year term.

• Authorized City Economic Development Director Thomas Kittredge to apply for a $200,000 Community Development Block Grant from the state on behalf of the new owners of the former Stinson Seafood property. The grant, which would require matching funds from the property owners would be used to assist with the redevelopment of the property as the Front Street Shipyard.

• Passed a resolution supporting the an effort by the Social Justice Committee of the Universalist Unitarian Church to make more downtown stores handicap accessible, primarily by encouraging business owners to invest in inexpensive, portable ramps that can support wheelchairs, power chairs and scooters. Representatives of the group displayed a version capable of clearing a six-inch rise that folded like a suitcase and cost under $100 from an online supplier.