By Fallan Patterson
Staff Writer

The St. Cloud City Council will eye a property tax hike at its meeting today, part of their proposed budget for the 2012-13 fiscal year, which begins Oct. 1.

The rate of 5.0851 mills, which is .1723 mills higher than last year’s rate of 4.9128 mills, allows the city to collect the same amount of money despite continuing declining property values.

For a home with an assessed value of $100,000, their property taxes would rise $16 next year from $491 to $508.

The rate hike, according to City Manager Tom Hurt, will allow the city to continue offering services to residents at the current level.

“Positive growth is anticipated for 2012-2013 based upon recent data on consumer spending, business investment and the continuing influence of the Federal Reserve Bank; on the other hand, the realities of our current situation is grave,” he said in a memo to the City Council Monday. “The city’s revenues have experienced significant declines in the past several years, and are not expected to reach pre-recession levels for years to come.”

The $172 million budget is 65 percent lower than the 2011-12 budget due to the project carryover construction expenses from Nolte Road, which was completed June 9, and construction on Budinger Avenue, which was funded in the 2008-2009 fiscal year Capital Projects Fund.

The tightening of the budget will not allow for employee raises, although employees were given a one-time bonus last year. With 73 percent of the general fund expenditures being related to personnel costs, the city has continued to freeze 31 positions, which will save the city just over $1 million in salaries and benefits.

“We’re in a hiring freeze. They’ll continue to be frozen until that position becomes critical,” city spokeswoman Sandra Ramirez said, citing the building department as an example as fewer construction projects are in the works due to the economy. “The only ones not on a freeze are critical positions such as police officers and firefighters.”

Those frozen positions are part of various departments and will have a minimum effect on services provided to residents, Hurt said.

“The preparation of this budget was a painful process,” he said. “Cooperation, coordination and collaboration were the essential tools used in the process; furthermore, we know challenges to the city are likely to increase before things get better.”

Funds were moved around to accommodate new programs or to fill gaps in what Hurt called “substantial losses” sustained to the city’s retirement and pension fund.

Under the proposed budget, the St. Cloud Police Department will see an increase of $25,345 for communications.

However, the city was recently awarded a $500,000 grant from the United States Department of Justice COPS hiring program to allocated funding over the next three years, allowing four new police officers to be hired to the force.

“When you start talking budgets, most cities start talking layoffs and begin with their largest departments, which for us is the police and fire departments,” Ramirez said. “This grant takes the edge off.”

St. Cloud Fire Rescue has been allotted a $508,000 increase to its budget, mainly for pensions and insurance benefits.

The St. Cloud City Council will conduct public workshops in August on the proposed budget and will vote on the final budget in September.