City Council looked over its proposed budget for the 08-09 fiscal year at last week's work session and discussed how to shrink the gap between money it expect to receive and what it wishes to spend.

To close the gap between the $7.9 million forecasted in income and the $8.5 million foreseen as expenses, council approved a budget option that matched revenue and expense at $8.2 million.

The nearly $400,000 adjustment came through a council-adopted plan that expands revenue and cuts spending.

For additional revenue, council plans to draw from increases in tax and solid waste collection fees, loan proceeds and withdrawals from the city's fund balance, best understood as the city's savings account.

The tax and solid waste collection fee increase will boost revenue by $70,000 and $47,000 respectively. Loan proceeds will add $145,000 to revenue, as will $160,000 from the fund balance.

To cut spending, council plans to lower the city workers' proposed salary increase from 4 to 3 percent. The percentage point decrease reduces planned expenditures by $46,000.

The property tax increase generating $70,000 is allowed by a state-authorized formula based on the heightened cost of consumer goods and services and population growth.

Considering the city's estimated 1.1 percent population growth, the city can raise the tax by 3.6 mills, or 3.6 units that represent citizens' shared cost to fund needed budget money.

The 3.6 mill increase means homeowners of a home assessed at $75,000 will pay $11 extra a year.

The fee for garbage collection will rise from the current $6 a month fee to $7 a month; this is collected from all households equally.

Together, the tax and fee increase will cost homeowners of a $75,000 home, for example, $23 extra this fiscal year.

The proposed fund budget is up 1.86 percent from last year's $8,091,119 adjusted total.

Within the budget, $145,000 is allotted for a garbage truck for the sanitation division, $123,900 for fire department equipment, $100,000 to resurface city streets and sidewalks and $88,000 toward the purchase of four police cars.

Budget plans did not fill requests for a four-wheel-drive pickup truck for the police department or a fire captain position at the fire department.

No new services or positions are included in the budget, though the city will consider establishing a storm water service and may accept a grant that opens positions for six new firefighters.

The city will have its first reading and public hearing on the budget on June 10 and a special meeting for the budget's second reading and final adoption on June 17.