There will be no property tax hike for Laurinburg residents, at least is City Council approves the proposed budget presented this week by City Manager Ed Burchins.

The proposed city budget for fiscal year 2010-2011 also seeks to maintain current utility rates. Costs of supplying water and electricity to current city customers are expected to remain the same, but the city anticipates some of the costs of collecting trash will increase as the county hiked tipping fees. Burchins predicts that these extra costs will be offset by cost-saving efforts in the Electric Department.

The budget projects a 2.47 percent growth in revenues to the General Fund, or about $220,000 more in revenues, for a total of $8.3 million. The budget also calls for slashing five vacant positions for a savings of $180,480.

Burchins has suggested using some of that money for onetime bonuses to employees. The bonus would be $750 for employees at Pay Grade 14 or below and $500 for those at Pay Grade 15 and above. Employees at Pay Grade 14 are paid between $33,448 and $49,418 annually, based on their years of service. Those at Pay Grade 15 are paid from $35,12 and $51,888 annually.

The total cost of the bonuses would be $108,250.

Burchins also proposed $291,058 in a contingency fund that will be allocated at the discretion of council.

Members of council seemed pleased with the budget, but several questioned the use of loans to finance capital items.

The budget calls for 11 capital items costing nearly $4 million to be paid for by loans.

Councilman Curtis Leak said it didn't make sense to have a five-year loan for police cars that will only last three years.

"A police care in five years ain't no good no how," he said.

Leak said he can see borrowing for some big-ticket items, but not those with a short life span.

Mayor Pro Tempore Tommy Parker agreed.

"One thing that I agree with Curtis on is if the car is going to last three years and you borrow for five years on it, you have two years of indebtedness where the car is worthless," he said.

"The city of Laurinburg is always pay as you go," Leak said. "... We always carry debts on about two big capital items at a time."

Councilman Herbert Rainer defended the practice of borrowing.

"I don't have a problem with using somebody else's money," he said. "It depends on what our objective is. If our objective is to have more money on hand by reducing our expenditures, I wouldn't have a problem with it... Borrowed money is a way of doing business."

Councilman Ken Spencer also voiced his support for borrowing, especially as the city can get better interest rates than individuals.

Leak told his fellow council members that there was a lot of risk with associated with locking into a long-term debt, especially as there has been little growth in the city's tax base.

"You're in the middle of a recession," Leak said. "Ain't nothing growing in Laurinburg except children."

Parker expressed similar concerns.

"We're stretching way out there," Parker said. "I think it's good to try to use cheap money, but to be more selective about it... You're obligating yourself for a lengthy period of time when you stick out there 10 years."

He told Burchins to consider paying cash for the police cars.

Burchins said the idea behind financing these capital expenses was that the city would rotate which department would acquire new big ticket items, paying

He promised council he would formulate a new way to approach capital expenditures.

Mayor Matthew Block thought the budget meeting was productive.

"I think the meeting went very well," Block said. "I think the staff and manager have done a lot of work on it (the budget) and a lot of the wrinkles have been worked out. It's just really working out some of the details regarding the capital projects, like the automated reading system... It's not so much whether we need these items but how best to pay for them."

The mayor said council is risk-adverse and hopes to avoid accumulating debt, especially with economic uncertainty always threatening future city revenues.

"I think there is always the concern that council doesn't want to tie us into any long-term debt," he said. "The city has always had a policy of paying as we go and has been very adverse to taking on any long-term finance commitments. From what we heard tonight, I think that is still the policy that council favors."