The city council gave preliminary approval Tuesday to a $95.9 million general fund budget that includes a 2 percent raise for the city’s nonunion employees during the budget year that begins Oct. 1.
The council also approved on first reading a slightly lower tax rate — a reflection of the uptick in the taxable value of city property as the real estate market rebounds from the housing bust.
The new rate of $5.91 per $1,000 taxable value, including debt service, is down slightly from $5.92.
Vice Mayor Eric Jablin noted that the rate covers the cost of police and fire-rescue service and garbage collection.
Under the proposed new rate, the owner of a $250,000 home with a homestead exemption would pay $1,184 for the budget year that begins Oct. 1. That’s $1.14 less than they paid this year, assuming the taxable value of the home doesn’t change.
The taxable value of city property rose 3.6 percent to $8.27 billion, including about $98 million in new construction. The increase is expected to generate another $1.5 million for the general fund.
“We’re in a very strong financial position,” Councilman David Levy said, citing a recent upgrade in the city’s bond rating. “We’re on the right course.”
Councilman Joe Russo said the tax rate should be reduced in future years if the value of city property continues to rise.
“I don’t want to see us spending money we don’t need to be spending,” Russo said.
The general fund budget includes $23.5 million set aside for reserves, about 35 percent of expenditures. Total spending in the general fund budget is $67.7 million.
The city’s Budget Oversight Committee recommended that the city continue to maintain reserves well above the minimum of 17 percent of expenditures “due to the financial crisis we have just experienced.”
Capital projects planned include the construction of a fire station No. 2 on Campus Drive; playground equipment at Mirasol Park; the addition of five lighted clay tennis courts at the Tennis Center; and intersection/traffic signal improvements at Johnson Dairy Road and Military Trail.
The final public hearing and vote on the budget and tax rate is scheduled for 7 p.m. Sept. 19 at in the council chamber at city hall.