Scarborough municipal and school budgets that increase more than 3 percent from the previous year would face town-wide referendums under a town charter amendment proposed by Town Councilor Shawn Babine.
“I think the idea has merit for future discussions,” said Town Council Chairman Jeffrey Messer, adding that traditionally the school budget is contentious issue.
However, Councilor Sylvia Most countered that Scarborough residents voted against the proposed tax cap last year and said she does not see why the town should institute its own.
“I don’t think we should make isolated charter amendments unless there is an extreme need to do so,” Most said.
Babine proposed the amendment, along with two others that would alter the town’s bonding policies, during last week’s Town Council meeting.
The proposals are still in their conceptual stages and need some refining. For example, Babine said he is not particularly attached to the 3 percent number and said it is simply a starting point for discussion.
Most councilors agree the municipal budget should be included in the proposal in order to preserve fairness. In addition, it also has to be decided whether the budget will be approved by the Town Council and then forwarded to voters or if it will go directly to the voters for their approval.
Another remaining question is how the percentage increase will be calculated. It could be based on the gross budget, net budget or tax rate increase, each of which would mean different budget increase amounts.
Councilor Steve Ross said his concern with a cap is the economy’s instability, which he said is bordering on inflation or deflation.
Babine’s two other charter amendments would change the way the Town Council borrows money for capital improvements.
The Town Council can now approve, without a referendum, bond packages that are less than $400,000 or infrastructure projects of any amount, such as road or sewer construction. Projects that cost more than $400,000 and are not infrastructure-related require voter approval.
Babine’s proposal would increase the $400,000 amount to seven hundredths of 1 percent of the town’s total assessed property value. For this year, the cap as proposed would be $1.47 million. The number will fluctuate with the town’s assessment.
Babine feels the town would be better served with the higher threshold because many of the town’s capital needs cost more than $400,000.
“That number has proven to be on the low side,” agreed Messer, adding he too would like to see the figure joined with the town’s assessed value.
In addition, Babine’s proposal would introduce a secondary cap on council bonding. The cap would prevent the council from independently issuing bonds totaling more than $3.3 million a year, even if it was done on projects that individually were below the per-item threshold. Any project that would take borrowing over $3.3 million would have to be approved by the voters. Babine said it was not yet determined whether the secondary cap would apply to infrastructure bonding.
Babine developed the $3.3 million figure by taking 10 percent of the town’s current debt load minus the high school construction debt. He said Wednesday he expected to propose raising the figure to $4.2 million.
“I think the citizens need to be involved with these decisions,” Babine said. “I think some of these projects need to go to citizens when it reaches a cap.”
However, Most does not like this proposal, saying she could not support any set dollar figure in the charter. Rather she wants any figure included in the charter to be tied to some sort of an index.
Town Manager Ron Owens, said he has not had time to fully explore the amendment’s implications, but has found one downside.
“In my view you weaken the system” of council review of spending, he said. “There’s less accountability over the decisions that are made.”
Normally, the town does not spend more than $3 million a year for capital improvements, but it does occur from time to time, as with the high school construction and the Haigis Parkway improvements.
Still, the $3.3 million secondary cap could make it more difficult to make major street repairs and reconstruction, undertake stormwater improvements in older neighborhoods and extend sewers to neighborhoods with failing septic systems or for economic development, Owens said.
The proposals require Town Council approval and an affirmative vote by residents. In order to get them on this November’s ballot, the changes would have to be accepted by August.
There have been a number of charter updates over the years. Last year voters approved changing the date when the town’s audit is completed to December. The last major change came in 2002 when voters approved the exemption of utility improvements from the $400,000 council-passage-only cap. This allowed the eventual bond for the Haigis Parkway improvements.
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