By David Purtell

david.purtell@salisburypost.com

Salisbury City Council will vote on the city’s proposed budget for the 2015-2016 fiscal year during its meeting Tuesday.

The budget includes a small increase of 0.31 cents in the property tax rate, which will bring the city’s tax rate to 66 cents per $100 of valuation. The budget also increases the city’s monthly residential stormwater fee by 75 cents to $5.

The tax increase is not as high as originally proposed by city staff — 1.49 cents. Council members decided to dip into the city’s fund balance, which is essentially a savings account, to avoid raising taxes any more than is necessary to make the budget revenue neutral.

The city will take nearly $1.8 million from city savings in order to cover costs in the coming fiscal year. But city officials say the city’s fund balance, expected to total more than $12 million at the end of the current fiscal year June 30, is healthy. However, City Manager Lane Bailey said in a message to council about the budget that he “would be remiss if I didn’t offer a word of caution that we are reducing our fund balance by almost 5 percent in one fiscal year.” But he added he thinks the balance will still be at a safe level. The state wants municipalities to have a fund balance equal to 8 percent of their annual general fund budget. Currently Salisbury’s fund balance is equal to more than 33 percent of the city’s general fund.

In the message, Bailey said he is more concerned that the city is replacing recurring revenue — the loss of $320,000 annually due to the expiration of the business privilege license tax — by using money from the fund balance. He said the city will have to address the lost revenue sooner rather than later. It’s likely the city will, at some point, have to increase taxes to make up for the lost revenue. That tax increase, 1.18 cents, was included in the the proposed budget before council decided to use money from the fund balance.

Money taken from the fund balance for the next year includes $150,ooo for the city’s neglected hosing initiative, $500,000 for funds already approved to go toward the school system’s new central office building, $320,000 for adding bike lanes and sidewalks along Newsome Road, $550,000 for implementing parts of the city’s Complete Streets plan for Innes and Long streets and $200,000 for incentives to encourage development in the downtown. Another $78,000 will be used for police equipment.

Rates for Fibrant’s TV packages will increase in the new budget. The increases range from 6 percent to 18 percent depending on the package. City officials say the cost increase is necessary to offset the rising costs the city pays to its program providers.

Including transfers from other city funds, the city’s general fund budget will total slightly more than $40 million in the coming year. The current year’s budget was set at $36.2 million.

The new budget includes the hiring of a Parks and Recreation director, which the city has been without for more than two years since the previous one was fired after city staff discovered the department had been inflating participation figures.

The water and sewer fund budget for next year is $22.7 million and about $70,ooo more than the current year.

Council meets at 4 p.m. at City Hall.

During the meeting, council will also consider a request to rezone property along Faith Road to allow for a hair salon.

Tasha Hall and Crystal Vanhoy, who work at Touch of Class on South Main Street, plan to make the house at the corner of Faith Road and Ann Street — 230 Ann Street is the address — into a salon and open their own business there. The property is currently zoned urban residential. Vanhoy and Hall plan to buy the property and are requesting it be rezoned to residential mixed-use to allow for the salon.

The agenda has council going into closed session concerning the acquisition of property. The property in question is along Airport Road and is owned by Akzo Nobel Chemicals. The city’s fire chief has been talking with the company about the possibillity of Akzo Nobel donating land for the city to use for a new substation for the fire department, according to Bailey.

In other business Tuesday, council will:

• Hold a moment of silence for Karen Young, who died June 3. She was the first woman to serve on Salisbury City Council. The moment of silence will be at the beginning of the meeting.

• Receive an update on the 2015-2016 Salisbury Citizen’s Academy.

• Consider appointments to various boards and commissions. The city currently has vacancies on the Human Relations Council, the Parks and Recreation Advisory Board and one seat for a city alternate for the Zoning Board of Adjustment.

• Receive an update on the parking situation along Ridge Avenue and South Fulton Street. Earlier this year, the city restricted parking on Ridge Avenue near the corner of Fulton Street to allow city buses to more easily make the turn from Fulton Street to Ridge Avenue. But the owner of Mean Mug Coffee Shop says the loss of parking on Ridge Avenue is hurting her business. City staff have been trying to find a solution to the problem.

• Consider adopting a resolution declaring the city’s intent to permanently close Hall Street and make it a private drive. Hall Street runs through what will be the new development at the old Civic Park Apartments. The developer wants to make Hall Street a private drive. If council adopts the resolution, a public hearing on the issue will be held July 21.