MECHANIC FALLS — Town Manager John Hawley released his proposed budget for 2011-12 to council members and the Budget Committee on Monday night.

The budget calls for total expenditures of $2.4 million, which is about $300,000 more than this fiscal year, which ends June 30. And it does so while keeping the amount to be raised through property taxes level.

This was achieved, Hawley said, by taking a little over $300,000 out of the town’s fund balance, a move he justified by showing that in the past year, due to some extraordinary circumstances, the town has been able to increase the amount in its fund balance from $1,230,000 to $1,541,000.

“Keep in mind that our fund balance is considered healthy and safe at $800,000,” Hawley said.

Hawley also noted that a significant part of the increased spending is the $170,000 he is recommending be added to reserve accounts, something the town hasn’t been doing for the past few years.

The budget also includes an $84,000 increase in the utilities line, an amount required to pay the Sanitary District’s $40,000 bill, which the town did not pay this year, plus another $40,000 to cover next year’s bill.

The proposed budget includes pay increases for all town employees that amount to 3 percent for full-time staff and 2½ percent for part-time staff.

“Our full-time employees have not received a pay increase since July 2007,” Hawley said.

Hawley noted that during these years that town employees essentially had their wages frozen, local school employees were being voted raises of from 2½ to 5 percent a year.

The RSU16 Board of Directors, Hawley pointed out, recently signed a contract whereby entry level custodial staff will start at $12 per hour.

“Our entry level police officers start at a little more than $15,” Hawley said.

The council will discuss the proposed budget in April. Meanwhile, Hawley said that he and Lisa Prevost, the town’s finance director, will meet with the Budget Committee, which elected Bonnie Payette and Oliver Emery as chairman and vice chairman, respectively, on March 16.

In other business, the council awarded the bid for insulating about 800 feet of heating pipe in the fire station and public works garage to High Tech Insulation Services of New Gloucester at a bid price of $2,945.

The council also awarded the bid for replacing three electric hot water heaters with on-demand propane heaters in the fire station/public works garage and the town office to Nadeau Refrigeration of Auburn.

Hawley reported that with the recent warm-up in the weather came a few leaks in the Municipal Building’s roof above the Police Department offices. He said it appears the 15- to 17-year-old roof has developed leaks in four places and he hoped that when he can get up there with a contractor to check on things, the problems can be solved with just some patching.

Hawley also noted that while the winter has been harsh, with a good many storms, the winter roads budget is still intact, with room for more storms, if they come.