The city’s use of surplus and the receipt of less revenues than expected combined to cut the city’s year-end balance.

The audit compiled by certified public accountant James Wadman of Ellsworth pegged the city’s surplus as of June 30, 2009, at $647,250. This was $298,647 less than the surplus held a year earlier.

The auditor met with the City Council April 26. The auditor repeated what he has said in past meetings with the Rockland City Council that the Maine Municipal Association recommends that municipalities maintain a surplus equal to 8 to 10 percent of the money they collect annually in taxes. In Rockland’s case that would be more than $1.8 million that should be available in surplus.

Councilor Brian Harden voiced concern about the decline in surplus.

“I don’t think we’re at a safe level,” he said.

He noted that if the state had not paid for the repair of the sinkhole on Old County Road, that one project would have used up half of the city’s surplus. He said the only way to rebuild is to budget money for adding to the balance.

The city had been rebuilding its surplus after it reached a low of $407,000 as of June 30, 2006.

Municipalities are urged to retain a surplus to deal with unexpected large expenses. A surplus can also have a community avoid the need to borrow money in anticipation of property taxes being received.

For the year covered in the most recent audit, the city of Rockland spent $53,891 less than it had budgeted. The public works budget was overspent by $144,055 due to overtime and salt and sand for clearing the streets during the winter of 2008-2009. That overrun was more than offset by reduced spending in other departments.

Revenues, however, fell $157,093 short of projections in the budget for 2008-2009.

The revenue gap mainly was due to less revenues being generated at the transfer station.