The Urban County Council gave first reading on Tuesday to the city's $279 million general-fund budget for the fiscal year that begins July 1.
The budget includes a number of cuts, including reducing the work force by 96 full-time positions through retirement and attrition, and cutting operating expenses by 9 percent in selected divisions, except for those that provide social services.
The council's budget gives a 1 percent raise to full-time city employees, with the exception of police, fire and corrections, at a cost of $932,000. It does not require any layoffs.
Pam Brandenburg, president-elect of the Civil Service Employees Association, said she appreciated no layoffs but that council members went against a city ordinance that links employee raises to a market rate index. According to the index, raises should be 2.9 percent.
The membership wanted a raise of 1.5 percent, which she said was "not an unacceptable or unreasonable request."
Brandenburg could live with the 1 percent raise, she said, if the council would guarantee no layoffs or no increase in health insurance rates for the next year.
Police officers, firefighters and corrections officers are covered by a contract that is negotiated separately. The budget includes a $6 million increase to meet those obligations.
The budget overcomes a $27 million projected shortfall, but revenue director Bill O'Mara stopped short of predicting that the city would end the year with a surplus. "We don't know at this point," he said. By comparison, there was a $4.6 million surplus at the close of fiscal year 2008.
The budget does not dip into the city's $13 million rainy-day fund. However, it uses $4.1 million in one-time revenue from a variety of sources to meet ongoing obligations.
The one-time funds include $1 million from a state severance tax on minerals mined in Fayette County, $1.9 million from the prisoners' activity fund, $1 million from landfill fees, and $185,000 from a coal severance tax.
The city will receive a projected $5.3 million from a new storm-sewer fee to pay for water-quality and storm-water projects.
The budget requires a second reading for final approval. That's scheduled for Thursday night's council meeting.
"Given the state of the entire economy, this is a real good budget in that we don't have layoffs and no new taxes, but maintain the same level of services," 6th district councilman Kevin Stinnett said.
Highlights of the budget:
■ Reduce work force by 95 employees through attrition and retirement, for a savings of $932,000.
■ $70 million bond to address the unfunded liability in the police and fire pension at an annual cost of $5.8 million.
■ $250,000 for a third installment to bring parity to maintenance among city parks.
■ A 9 percent reduction in operating expenses.
■ $3 million for purchase of development rights to take advantage of a matching grant.
■ $1 million bonded for trails.
■ $3 million for neighborhood road resurfacing.
■ $75,000 for the council's economic development task force.
■ $1.2 million transfer from fire and emergency service overtime account to regular personnel account to hire 38 new firefighters.
■ $110,000 added to maintain animal control staffing levels.
