WATERLOO - Mayor Tim Hurley and his staff were expected to be fine-tuning a proposed city budget this weekend.

But when Waterloo City Council members wrapped up their final work session Friday on the projected spending plan for the fiscal year starting July 1, they were staring at a nearly 3.9 percent increase in overall property tax collection.

"We're squeezing operations but trying to hold onto the services that we have," Hurley said. "Hopefully there will be clarity by Monday night."

Council members are scheduled to hold a public budget hearing at 5:30 p.m. Monday in the council chambers on the second floor of City Hall. After presenting the budget and taking residents' comments, the council is expected to adopt a budget that will affect property tax bills in September.

The proposed property tax rate would fall from $18.37 to $18.31 per $1,000 of taxable property value. But thanks to growth in the tax base both from new construction and increases in the taxable value of existing homes, the lower rate still would generate $1.43 million more in taxes to support the budget.

That new tax rate translates into a 3.1 percent increase in the city's share of the overall property tax bill on residential property, while commercial and industrial properties would see tax cuts of less than a half percent. The discrepancy between the tax bills on homes and businesses is set by state formula.

Under the projected tax rate, a home with an assessed value of $100,000 would see city property taxes climb to about $835, a $25 increase. The owner of a $500,000 commercial building would see the tax bill fall about $4 to $9,155; and the owner of a $1 million industrial plant would see taxes cut by about $58, for a total of $18,309 next year.

While council members generally have agreed to move departmental budgets forward after reviewing them during work sessions, not everyone was satisfied with the final results.

"I still believe we can do better than this," said Councilman Steve Schmitt. "Instead of looking under every little rock for every nickel and dime, we need to step back and look at how we deliver our services."

But Councilman Harold Getty, noting 80 percent of the operating budget is personnel costs, said deeper cuts will affect the services provided.

"That's the bottom line," he said. "That's the only place there is."

Hurley said he believes the city must continue to invest in a quality of life that will attract new workers and businesses, helping add to the tax base.

"My philosophy as a councilman and as mayor has been to continue that tough path and grow out of it," he said.

The city received some late good news Thursday when its projected health insurance premium costs fell from an original 10 percent increase to just 3 percent. It was offset by a realization that the 2 percent pay increases projected for all city employees most likely will not cover the labor union contracts now in the late stages of negotiation.

Neither the mayor nor council members will get a raise in the next budget.

Hurley noted cuts in the police and fire overtime budgets could put a crimp in the city's ability to provide a police presence at various community events and could include "rolling," or temporary, shut downs at various fire stations.

Contact Tim Jamison at (319) 291-1577 or tim.jamison@wcfcourier.com.