Eastport lays off staff and cuts hours to meet city budget

The City of Eastport is laying off and cutting back on hours for a number of staff and reducing hours at city hall to offset decreased revenues and rising expenses. City Manager George "Bud" Finch hopes that the cuts will be short-term, ranging between three to six months. He says the city council is supportive of the action, although the council has not formally considered the layoffs.

City hall will now be open four days a week, Monday through Thursday. Among the temporary cuts are the elimination of the fifth police officer position and a reduction in reserve officer time; the reduction of five full-time positions at city hall to part-time, with a 20% cut in hours; elimination of two full-time positions and a reduction in part-time hours for the public works department; elimination of one full-time position in the sewer department; and the reduction of hours for seasonal work by the cemetery crew by 25%. The move will provide additional savings in fuel, transportation and insurance costs, as the cuts will affect employee benefits.

Without the cutbacks, the city would be facing an overexpenditure of the budget for this year, says Finch, both because of cost increases and a decline in revenues. Rising costs include a 9.9% hike in health insurance in January, and increases in other insurance costs, heating fuel, gas and diesel. With the cuts, the city will be able to meet this year's budget projections. "We've had a bare-bones budget for 10 years with no fat in it," explains the city manager. "Everything's been trimmed out of the municipal side of the budget," he says. "There's little left that isn't payroll and benefits."

The city has not yet received a proposed budget for educational funding from the Eastport school system. While the city usually would be setting the date for the final hearing on the budget for the next fiscal year, Finch comments, "We haven't had the first hearing on the budget yet." He does expect the superintendent to come out with a budget within the next couple of weeks.

Finch says the move is not a ploy to improve the city's position during the upcoming consideration of the municipal and school budgets. "We've been looking at doing this for six months," he says, adding that he would not lay off staff to improve the city's negotiating position. "It's the most difficult function I've had to do in my years as city manager."

The city's tax rate is currently 35 mills, and Finch notes that property owners have indicated that they do not want their taxes raised any more.

The city manager says he needs to plan for the future. He says the move is driven by what he calls "the feeding frenzy" for tax reform, in which as many as one-third of the municipalities in the state may lose school funding under the implementation of the new Essential Programs and Services funding model. Although transition funding is expected to keep the Eastport school system from losing state subsidy this year, Finch expects there will be a loss soon.

He also points to other tax reform initiatives, such as the effort to repeal the tax on personal property, which accounts for about $8 million of the city's valuation. There is also concern about the city property revaluation, which is currently under way, and also uncertainty about the tourism season this year, with high gas prices, and about whether Cooke Aquaculture will reopen its processing plant in the city.