As a special joint meeting between the Damariscotta selectmen and budget committee wound down, Selectman James Cosgrove asked both boards what kind of town in which they wanted to live.

On the one hand, Cosgrove said, the town had previously denied expanding the tax base. On the other, the town now faces a serious budget dilemma and will likely have to make cut backs to make up what could be a 34 percent increase in the secondary school budget.

“We can't have it all,” he said. “We can't have no tax base, and have all these Cadillac services.”

The two boards met Monday, May 18 to discuss possible plans of action to help offset what could be up to a $440,000 increase stemming from the secondary school and special education budgets.

Damariscotta voters turned down the proposed budgets at the May 6 meeting, and much of the attention was given to a proposed $205,000 increase that would cover the cost of one special needs student who would attend specialized schooling out-of-state.

A good portion of the discussion during the May 6 meeting swirled around how much money the town was liable to pay for such a situation.

During Monday's meeting, town attorney Jennifer Villeneuve said that originally, the money was supposed to come from the federal level, but that over time the cost has been downshifted until it ultimately landed at the town's feet.

Now, the funding is based on a formula that determines which percentages are paid for by the town, and what percentages are paid for by the state.

Damariscotta is what is a called a “minimum receiver” town, which means that approximately 30 percent of the cost will be coming back, Lutkus said. All told, with the rebates and money coming back over time, the cost is likely to be closer to $100,000 per year.

But those funds will still need to be made up.

Both the budget committee and the board of selectmen agreed to implement a series of changes that would reduce the current budget by .06 percent; or approximately $35,000 to start.

That decrease includes trimming Lutkus' time and hours by about one day per pay period.

There are instances when the cost could have been side-stepped because it qualified as an unknown or surprise expense, but because the school board has known about the impending increase for some time, the current situation doesn't fall into that category, Villeneuve said.

Former select board chairman and current budget committee member Dick McLean said the town should consider taking out a bond to allow the town more time to spread the cost out over several years. McLean said the goal should be a constant tax rate, even if it is higher.

“Whenever I see towns that have a tax rate with peaks and valleys it creates all kinds of chaos,” he said. “We're going to have to borrow, cut or have some combination of the two. It's important to avoid the spikes and valleys, and (borrowing) would let us spread the cost out over several years.”

Lutkus said borrowing the money was an option, but there were other added expenses associated with borrowing that the town would have pay down the line, as well.

Former select board chairman and current candidate for a selectman's seat Josh Pinkham said there were painful choices upcoming, but that it would do the board more good to get creative with money-saving measures.

One thing Pinkham suggested was again taking a look at the interlocal agreement.

“You need to look through the budget and see what do we duplicate,” he said. “We need to look at those numbers and no department is safe. We need to look at the fire department, at the police department. We can trim money off the public works department; there are plenty of areas where we can save.

“I think we need to look at all the alternatives and say 'Where can we save.' Because $35,000 ... I think we can do better.”

Pinkham asked the board if it would look at the costs associated with splitting the public works department with Newcastle, and if the town might be better served by backing-out of the current agreement and going back to contracting for projects. The town currently contracts the bulk of its winter plowing to Hagar Enterprises.

Pinkham said budget season “was like Christmas to me” when he was on the board, and would like to see the town take money out of the budget instead of adding more to the tax rate.

“I speak for a younger generation here in town, and people come up to me and say 'What should we do? We're struggling to pay our taxes already,'” he said. “These are people who volunteer, coach teams and they're looking for a way to stay in town.”

But all the talk about trimming down staff and hours of operation wouldn't sit well with Police Chief Ron Young, who said he faced something similar in the past, and has no desire for history to repeat itself.

One of the proposed budget cuts was to keep a part-time secretary for the department, and to potentially cut back on patrol hours. Young, who was the police chief of Lincolnville before the town decided to shutter its police department, said he wants to stick around in Damariscotta for a while.

“A few years ago when I came down here, I fell in love,” he said. “I applied (for the chief's job), went through the process, and I knew the turmoil that was going on.

“I have a loyalty to this town; this is it, this is where I want to be.”

Young said he worked to bring in staff that shared his love of the town, and weren't likely to leave after a short period of time on the staff. That includes the new secretary, whom Young said has been instrumental in making the department more efficient.

“I have some loyalty, and I'm willing to give up my pay increase to keep her here,” he said. “She's good for the town, and for the department.

“I understand the cutting. But I would think long and hard before you take someone away who wants to be here. And your own police department that is proactive, not reactive.”

The boards will continue to look for areas where savings can be found, or for potential cuts. Both boards approved the first measures.