FALLS CITY – The Falls City City Council held a hearing Monday on a budget that will give 3 to 5 percent pay increases for city employees and takes advantage of a sales tax increase approved by voters in May.

Voters approved an extra half cent sales tax, but City Administrator Anthony Nussbaum said the new revenue does not go into the general fund. By ordinance, it can only be used for infrastructure work, utilities upgrades and streets.

The city typically budgets $700,000 for sales tax, but the new budget increased that to $1.1 million due to the new tax.

The proposed budget asks for $750,900 in property tax, about $16,000 higher than the prior year.

The budget includes a 3 to 5 percent pay raise for city employees and also includes a new position of building inspector.

Proposed department budgets are $837,000 for police, $404,000 for streets, $197,000 for fire, and $62,000 for parks. Of the $62,000 for parks, about 90 percent is for water and lights.

City Councilman Mitch Merz credited city administrators Nussbaum and Kevin Cluskey for equipment and machinery management. 

He said Falls City is reaping the benefits of a policy of  regular, scheduled equipment purchases. He said  regularly spending a little each year for items from mowers to police cars reduces maintenance costs and increases trade-in values.

Nussbaum said the city's overall expenditures are expected to be down next year, as the city had a $1.5 million expense for a new generator at the power plant. There were also unexpected expenses because of storm damage to utility facilities at Rulo.

Nussbaum said the city expects reimbursement for most of those costs.

He said a committee has been formed to guide expenditures from the new sales tax sinking fund.