The City Council approved a $8.5-million city budget for fiscal year 2004-2005 on Monday night.
The budget passed 3-1, with council member Susan Kirk casting the nay vote. Council Chairwoman Kitty Ebert was absent. The council also voted 3-1 to decrease the millage rate from 5.8 to 5.6. Kirk also voted against the proposed millage rate.
A mill equals $1 in tax for every $1,000 in assessed, nonexempt real property. With the rate decrease, a property owner whose home, for tax purposes, is assessed at $100,000 and who takes the standard $25,000 homestead exemption would pay $420, down from $435 during the 2003-2004 fiscal year.
Kirk said Tuesday that she opposed both the budget and millage rate because "it was not prudent fiscal policy" to include roughly $140,000 in revenue from the newly annexed portion of the city in the new budget. The funds are designated for infrastructure improvements, such as new culverts, said City Manager Susan Boyer.
With the city still in litigation with the county over the April annexation, Kirk said the city should place the funds in an escrow account until a judge makes a final ruling on the annexed property.
"When it's free and clear and all questions are answered, it should be returned to the taxpayers," she said.
If a judge orders the city to repay the county, the funds can be immediately returned, she said. If the funds are spent on infrastructure, the burden to repay the county could fall on taxpayers, Kirk said.
Boyer said the council could free the funds by opting not to go ahead with the planned infrastructure improvements. She added that city officials think the city will not have to repay the funds because the city has already expended money to provide services, such as police and fire, to the newly annexed portion.
_ RAGHURAM VADAREVU