McLENDON-CHISHOLM — To implement its first property-tax funded budget in the history of McLendon-Chisholm, the council has chosen to follow closely the recommendations of a citizens committee on the subject and has presented a balanced budget.

It begins by establishing a tax rate of 9.75 cents per $100 valuation, just one-quarter of a cent more than that recommended by the committee for fiscal issues. It ends with a budget of $301,860, which, though $58,000 more than last year’s, develops a reserve of nearly $40,000 and pulls the city out of its current deficit ending.

The tax rate is a compromise between citizenry views, two camps of which were expressed in the Tuesday night public hearing on the 2009-10 budget, which was held as the opening of the regular city council workshop and meeting.

Chuck Samples said his concern was that the initial tax rate could be too low, noting the 9.75 is a “bare bones” tax rate. “Will a 9.75 tax rate do what the city needs for three to five years without coming back to the city?” he asked, noting an 8 percent cap on rate raises exists.

Tom Richmond said he was very pleased the council was able to limit the rate to 9.75 to keep the city operating, and “not generate a host of surplus funds.”

“What you’re witnessing is a balancing act between what Mr. Richmond said and what Mr. Samples said,” said Mayor Mike Donegan. “I applaud the council for the work they did to achieve this balance,” he said.

The 2009-10 proposed budget addresses the main recommendations of the citizens committee as noted it its final report after four meetings culminating in January 2009.

It requested that the city cut expenses, use reserve for emergencies, spend within budget limits, and improve communication with property owners.

Operating expenses were cut. Legal and professional fees are projected to be 33 percent less than the amount originally set for the current fiscal year. Even accounting for cuts made to this year, the $28,350 total is still 31 percent less.

That is one reason why the proposed operations budget for 2009-10 is down 6 percent, or $12,000, from the current year’s budget as it has been amended.

Other operations line items received no or only slight increases. Salaries and mileage expenses remained flat.

In the area of capital expenses, which has traditionally consisted of a single line item, other line items were added, in large part to fulfill the committee request that a reserve fund be established.

A cash reserve of $39,482 is to be established for next fiscal year. It falls under the heading of capital expenditures. It is invested into two local government investment pools, overseen by the state comptroller.

Also under capital expenses, a loan payment of $20,000 is scheduled, because the city took out a line of credit as of July, to make it through the fiscal year and the first month of next fiscal year. No more than $20,000 is expected to be needed. It was this year’s deficit ending which prompted the formation of the citizens committee

These two expenses to secure the city’s solvency, account for almost $60,000, which is primarily the difference in the 2009-10 budget and the current fiscal year budget.

Road repair, which in both past and current fiscal years was originally budgeted at $10,000, is dropped to $6,000, prompting former council member Beverly Stibbens to mention that in the public hearing.

It was noted that developers are expected to improve League Road, and Klutz Road.

Council member Patrick Short added, “We can’t tax enough to fix the roads. I don’t think that’s the will of the people in this community.”

Total expenses are projected to be $301,860. That same amount in revenue is expected, with the ad valorem tax to bring in 45 percent of that, or $163,460.

“I think the subtotals are very good,” said Jackie Pullen, council member, to open council discussion in response to the public hearing.

“We tried to stay within the parameters the citizens committee asked us to do.”

Steve Hatfield said, “I personally get tired of elected officials who think they’re so much smarter than the general populace. We’ve not heard people come in and say they want a park system, or a new city hall. Right now, I feel we have dealt with the needs of this city as best we can.”