Friday, April 9–Berlin Budget To Shrink 10%

By Cara Dahl

Staff Writer

BERLIN – Berlin will have $1.3 million less to spend in fiscal year 2011, with revenues estimated at $12.4 million.

In the current fiscal year, Berlin has $13.7 million in revenues to work with, but that number has dropped 10 percent overall for the next fiscal year.

“We do not see any essential services cut back at all,” said Berlin Mayor Gee Williams, who presented the town’s budget during the first of two budget work sessions this week.

Overall, town departments have cut their budgets by 12.7 percent.

Williams presented a balanced budget to start, saying that it would be easier to assess the impact of any budget changes that come up during the budget process.

The state has projected slightly higher property tax revenue for the town, but staff has budgeted conservatively, said Finance Director Lynn Musgrave.

The proposed budget is based on retaining the same property tax rate as the current budget year, 73 cents per $100 of assessed value.

The budget presented freezes salaries and all hiring except for the currently vacant senior accountant position.

The budget includes $100,000 for a contingency fund and money for youth programs in the parks as part of a crime prevention initiative.

The only out of the ordinary request as each department presented a budget was the suggestion by Economic Development Director Michael Day that Berlin should create a revolving loan fund for small business loans, which would allow town businesses to buy equipment or expand their operations, Day said. Loans would be made up to $25,000 for just 10 years.

“This is just a proposal to get you thinking on it, see what you think,” Day said.

A loan fund would help create a business-friendly economic environment, Williams said. A loan fund would provide local businesses with a competitive advantage.

A local bank has offered to help administer a revolving loan fund. Potential borrowers would complete a detailed loan application, just like for a bank loan.

“It’d be pretty tightly reviewed before the money was lent,” Day said.

Some town businesses are looking at making changes, such as replacing heating and cooling systems, to increase energy efficiency, Day said. A loan of $3,000 or $4,000 would cover those costs.

A loan fund could put some of the town’s reserves to work, Williams said, with a one-time investment. The fund would be replenished as borrowers repaid loans.

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