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The city will spend $33.5 million next year to serve its 38,000 residents.

The City Council passed a budget Wednesday that contains no increases in the property-tax rate or fees and only a small jump in franchise taxes for cable TV watchers.Cable rates will increase by 40 cents a month for the average user, up 2 percent from last year. The city uses the money to subsidize road, fire and police accounts.

Most of the city's revenue comes from the sale of electricity - about $12.6 million each year. The second-largest source is sales tax, which accounts for $3.8 million in revenue. Its largest expenditures are for maintenance and operation of the city's utility company and street projects.

"We haven't had an increase in our property-tax rate for 13 years. And most of our fees have remained the same for at least five years," said City Manager Tom Hardy.

The city has avoided increases because it has not issued bonds for construction of roads, buildings or other major expenses. And its commercial-tax base has grown with new business development around 500 South.

Next year's overall budget is up 6 percent from last year's total. Most of the increase will pay for two more police officers to work in the city's schools.

"These officers will build bridges between students and administrators and help curb student-related crime," said Hardy.

The city will still keep $26.4 million in reserves, a practice some candidates for elected office opposed during November's campaign. Officials say the reserves allow the city to pay for major expenses without borrowing money.

But perennial mayoral candidate Dave Piggott says some of the money ought to be returned to taxpayers in the form of lower franchise taxes. The city currently charges the legal limit, 6 percent, on most utility-related services. Piggott said the city ought to reduce that amount to 3 percent.

"You've got a lot of money running around, money you're not using. The city lives better than most of its residents and that isn't right," he said.

He also criticized the city's practice of shifting most of its reserves to capital expenditure accounts within enterprise funds like the water department and golf course.

"You're not earmarking things properly; it's a diversion."

However, the city agreed to change the way it accounts for the reserves in capital expense accounts last year after talking with the state auditor's office.

Officials now attach specific projects to the reserves and must go before the public if they want to spend money on projects not contained in the original budget.