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Updated: February 2, 2024

South Portland freezes hiring to help plug $4M budget gap

Town Hall exterior in winter File Photo / Renee Cordes The city of South Portland announced a plan to address a $4 million shortfall in this fiscal year's budget.

The city of South Portland said it is only $1 million away from closing a $4 million budget shortfall, thanks to measures including a hiring freeze in effect through June 1. 

The $4 million gap, which represents about 3% of the current fiscal-year municipal budget, resulted from a billing error publicly disclosed last month. The city said at the time that it would seek to fix the problem without raising taxes for residents.

In a plan announced Thursday, officials said South Portland has closed the  gap by roughly $3 million, which includes a budgeted $500,000 from the municipal fund balance.

The hiring freeze is on some city positions through June 1, though the city said the timeframe may be shortened — or extended through June 30.

“We’re using a number of tools to close the budget gap, and the hiring freeze is one,” said City Manager Scott Morelli, offering the reassurance that the impacts on critical services over the next several months are expected to be minimal.

"Although most positions must be filled due to their critical nature, there are some where a delayed hiring of a few months will only result in a minimal impact on service delivery,” he added. “These temporary delays will result in some of the savings needed to achieve our target savings.”

Positions exempt from the hiring freeze include noncivilian police and fire department personnel; Public Works Department employees and parks staff who have a role in Public Works operations; bus service staff; and Water Resource Protection staff. The city said the hiring freeze will allow the city to continue to provide critical service to the public while creating savings necessary to address the budget shortfall. Both Morelli and Human Resources Director Stephanie Weaver will review and approve any positions posted during the freeze.

Other responses announced by the city to address the budget shortfall include accounting for surplus revenues, tapping into grant and reserve funds for eligible costs and working with departments to reduce expenses.

South Portland said the tax revenue that went uncollected due to the billing error will be part of next year's fiscal budget, covering the period between July 1, 2024, and June 30, 2025. The proposed budget will be posted online on March 19.

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