WATERVILLE -- City councilors tonight are scheduled to take a first vote on a proposed $37.9 million municipal and school budget for 2008-09.

The meeting will be held at 7 p.m. in the council chambers at The Center downtown and will be preceded by a private session at 6:30 p.m. to discuss labor contracts and negotiations.

City Manager Michael Roy proposes to decrease the tax rate from $24.90 per $1,000 of valuation to $24.40.

Councilors must take three votes on the budget; Roy said he expects a second vote will be taken May 20 and a third and final vote, June 3. The public would then vote on the proposal at a June 10 referendum.

The proposed municipal budget is $17.8 million; the proposed school budget is $19.7 million. The total represents more than a $2 million increase over the $35.5 million budget approved for 2007-08.

But the bottom line would not be an increase because $2 million would be taken from surplus and used for capital improvements to Waterville Public Library and public works facilities, according to Roy. The city also wants to buy a truck for the Fire Department and vehicles for public works.

The proposed $19.7 million school budget represents a slight increase over the $19.3 million budget approved for 2007-08. Most of that increase is represent in fixed costs including salaries and fuel.

The budget councilors will consider tonight may change between now and the second vote, but Roy says he does not think any major changes will be made.

"As in the past three years, with the cooperation of the school department, we've been able to keep the total such that we've had a tax decrease," Roy said Monday.

The state is mandating a different process be used for approving the budget this year. In previous years, the council made the final decision on the budget; this year, the council must approve it and then voters will consider it at a referendum.

In previous years, councilors at budget workshops prior to the first vote reviewed all city department budgets with department heads present. The council has not yet reviewed all budgets.

"We're taking the first reading on this, even though we haven't reviewed the entire budget," Council Chairman Dana W. Sennett, D-Ward 4, said Monday. "Because of the complexity of ratifying the school budget -- the council has to consider 11 separate categories -- we felt it better to take a reading on this and recognize there will be two additional votes."

Sennett said he is pleased with the proposed budget.

"We're satisfied with what we have; however, it's thin, administrative-wise and also, material-wise."

If voters on June 10 reject the proposal, councilors must start the process over again, he said.

In other matters tonight, councilors will take a first vote to discontinue part of Mayflower Hill Drive through the Colby College campus. Councilors must take a total of three votes on the issue.

Amy Calder -- 861-9247

acalder@centralmaine.com