Raise taxes, cut services or reduce employee benefits? Those are the questions the Boothbay selectmen must face when trying to balance the town budget.

During the December 11 selectmen meeting, Town Manager Jim Chaousis proposed a budget for fiscal year 2015 in which he recommended reducing healthcare coverage and retirement plans for the town's 11 full time employees, including himself.

It's a tough decision to make, Chaousis said, but under the new budget proposal, employee benefits would still be generous and competitive to other organizations with similar service.

The changes would switch employees healthcare coverage from the Maine Municipal Employee Health Trust POS-A plan, to the POS-C plan, creating higher co-payments. But Chaousis also recommended changing the staff retirement contribution over the next three years.

Currently the town pays 10 percent of staff salaries into individual retirement plans, with no matching contribution from the employee. The proposed budget for next year would require the employee to chip in at least 1 percent of the cost to the town's 9 percent.

According to Chaousis, the changes would save the town $26,143 in just one year, which would bring more stability to personnel costs, and avoid incurring increases for healthcare coverage.

When the town employees found out about the proposed changes, they were “not all entirely thrilled,” Chaousis said.

“We had a department meeting in which we informed them of the budget,” Chaousis said. “I took some criticism for it. Some employees understand the business aspect of it, and obviously all employees are concerned about losing some kind of benefit.”

In the past several years the town has found ways to avoid rate increases, but Chaousis contends the town must now find a solution if they want to keep a consistent “flat line” in the operating budget.

Since 2010, rates have increased across the board for the school budget and Lincoln County expenditures. In the three years Chaousis has managed Boothbay, the town has avoided budget increases by reducing the public works crew size and restructuring the code enforcement department, all the while creating a capital improvement fund.

“There's no more budgetary gimmicks,” Chaousis said. “We're not at the point where we can do anything with this budget and not make a sacrifice.”

In order to avoid a tax increase, the selectmen will ultimately have to make a sacrifice when they adopt the budget next year. If the selectmen did nothing, the “mock budget” for fiscal year 2015 would increase by $34,343, or 1.79 percent, according to Chaousis.

The selectmen said the decision would be very tough, but in the meantime they proposed holding an open workshop with town employees to further discuss the pontential benefit changes.

Town employees are scheduled to meet with the selectmen and town manager at 2 p.m. on December 31. The meeting will be open to the public, and the budget for fiscal year 2015 will be discussed.