The Mechanicville City Council this week approved a $4.9 million city budget that will raise taxes by 17.7 percent to cover costs after depleting its surplus funds.
The 4-1 approval by a council that included some members who left office on Dec. 31 means taxes will rise about $250 for a house assessed at $100,000. The increase will raise about $350,000 in revenue.
“I didn’t love doing it, but I think it’s the best we could do given the situation,” said Accounts Commissioner C. Mark Seber, the only council member who didn’t have to run for re-election this past fall.
The approval vote came after the council voted down a version of the budget that contained a 19.5 percent increase and would have included borrowing $500,000 next year to buy a new fire truck.
Only Finance Commissioner Peter Chauvin, who didn’t seek re-election and is being replaced by Jodie Gilheany, voted against adopting the budget.
The new budget brings the city’s tax rate to $16.47 per $1,000 assessed value. City tax bills go out around March 1.
Council members have been told the city has burned through $1.6 million in fund balance since 2010, leaving the city with a need to raise an additional $350,000 to balance the 2014 budget.
New Mayor Dennis Baker, who was sworn into office on Wednesday, said it might have been better to raise taxes by small amounts over several years, rather than deplete the surplus.
“It’s unfortunate, but it needed to be done,” Baker said of the tax hike. “It would have been better to do it a little at a time, rather than all at once.”
He said he’ll be looking for ways to cut spending during the year, possibly if some senior police officers retire.
Baker said city residents get a lot for their money, and right now he doesn’t want to see the city cutting services like garbage collection.
The city of 5,200 has had a cloud hanging over its fiscal health for at least the last year. A state comptroller’s audit early last year that covered 2010-2012 found serious issues with bookkeeping.
Seber said he’s hopeful that part of the city’s financial problem is that bookkeeping issues prevented it from receiving full reimbursement for some of the $12 million in federal and state grants Mechanicville had received in recent years.
Gilheany has a background in municipal finance, creating hopes she can restore accuracy to the city’s finances.
“We need to move forward. We have a lot of good things going on in the city,” said Seber, who with Baker is one of two Republicans on the City Council.
Baker, who replaces Democrat Anthony Sylvester as mayor, was sworn in at the Mechanicville Senior Center. Term limits prevented Sylvester from running again.