Interim City Manager Ed Wyatt presented a balanced, $14,272,016, budget for the upcoming fiscal year that includes no proposed tax increase and a 3 percent cost of living adjustment for city employees.

In delivering the city’s budget, which will be available online Wednesday on the city’s website, Wyatt also outlined concerns for the city’s future fiscal wellbeing.

At this point the budget is balanced without use of the city’s fund balance, although Wyatt said a modest amount may have to be used before the financial plan is adopted on June 30.

Mayor Emery Doughtie suggested following the meeting it would most likely be used to pay theater debt.

The budget, which is 2 percent less than last year’s, maintains the city’s tax rate at 62.4 cents per $100 of value.

The budget contains no tax increase proposal.

The property tax rate is 49.78 percent of the general fund budget and is projected to raise some $6,702,588 based on a 96 percent collection rate.

That projection nearly mirrors what the city collected last year, Wyatt said. “Within the last five years revenues have been flat. There haven’t been the most ideal circumstances.”

Sales tax projections, however, are projected to be up by 3 percent and will bring in nearly $2 million. “That’s one of the bright spots,” the interim city manager said.

The city is recommending a 5.7 percent increase in the solid waste user fee based on debt service and the increasing cost of diesel fuel. The last increase was in the 2008-2009 fiscal year.

Wyatt is proposing a small increase in the privilege license fee and an increase in the fee for Internet cafes. The increases are expected to generate $157,870 for the city. The proposal is to increase the fee for the first five machines to $2,000 and each additional machine to $1,000 each.

Staff watch the PowerPoint.

“The theater,” Wyatt said, “is larger than life.”

The goal, he said, is to continue to make it more viable and work to selling it with assistance from county economic development. “We’re better to try to make it have viability than to lock it up.”

Maintenance of the theater is $150,000 a year. The debt service payment due by July 1 is $750,000. The annual debt on the theater is $1,789,836.

There are no position cuts planned in the upcoming fiscal year budget. Seven positions remain frozen. The budget does plan for a 3 percent cost of living adjustment, the first since 2010, Wyatt said.

The city will renew its health insurance with Blue Cross and Blue Shield with First Carolina Agency serving as broker.

The major changes in the plan include increasing the deductible from $2,500 to $3,000. The employee will be responsible for $1,000 and the city will continue to pay $2,000.

Emergency room visits were increased from $300 to $500 and the primary care physician co-pay decreased from $35 to $25 while specialist co-pay decreased from $70 to $50.

Meanwhile, the city found room in the budget for some capital expenses, namely $600,000 for a new ladder truck for the fire department with the understanding the current one be sold for $120,000.

The city is also planning to have the state Department of Transportation take over traffic signals but must upgrade the ones it currently operates at a cost of $41,838.

The city is asking for $125,000 for a new knuckle boom truck and $100,000 for street resurfacing.

In addition, the city is asking for $40,000 for a 15-passenger van to carry the inmates who have been doing work for public works and parks and recreation.

The next step in the process is a public hearing, which has been scheduled for June 5 at 7 p.m. at the Lloyd Andrews City Meeting Hall on Jackson Street.

“We have a lot of challenges ahead of us,” Mayor Emery Doughtie said. “I do see some signs in this that things are getting better. I think the ad valorem tax rate is a positive for the market.”

Wyatt said following the meeting the proposed budget was done without tapping into the fund balance but said before the process ends a modest amount may have to be used.

“That payment is on there,” Doughtie said of the theater payment. “It has to be made.”