Jun. 17--Although at first glance, at 10.1 percent increase in Kinston's budget would appear to be a good sign, it is more a reflection of the city's higher operating expenses rather than significant growth.

"Our budget is not necessarily a growth budget," City Manager Scott Stevens said of the $98.1 million budget for the 2009-2010 fiscal year. "It has some increased costs, but that's primarily electric costs and water costs."

The City Council voted 3-1 in favor of the budget this week. Councilman Joe Tyson was absent.

Councilman Jimmy Cousins, who voted for the budget along with Councilwoman Alice Tingle and Councilman Robbie Swinson, said it helps maintain the current level of city services.

"It wasn't exactly what I wanted, but it was the best we could do with the circumstances we are under right now," Cousins said.

Councilman Will Barker voted against the budget, though.

"I think we have to look hard at the spending side," Barker said Monday. "I'm concerned about where we're going in future years."

Barker, who is a CPA by trade, gave a presentation to the council Monday about his concerns over the effects of continued general fund balance transfers several years from now.

"You've got four consecutive years we are experiencing losses in the general fund, and in 2010 we're struggling to create a budget that doesn't use fund balance," he said after the presentation. "In three of those five years we have increased revenues either through stormwater fees or property taxes."

The general fund, supported by property and sales taxes, plus other revenue sources, covers Public Safety and Recreation Department expenses, plus capital spending, debt service and outside agency support.

"It's not a warning anymore, it's a reality that he showed us with his numbers last night," Cousins said of Barker's presentation. "We're going to have to do something unless the economy really turns around."

Barker said the current spending levels cannot be sustained over the next few years without major cuts or hikes in taxes -- or savings withdrawals -- since no new construction projects are anticipated.

Most revenue from the Spirit AeroSystems project at the Global TransPark will go to the state and the county, he said.

"At this point in time there's no discussion of cuts but what we've got to do is, we have got to look at what can we cut and what services will be affected by those cuts," Barker warned.

The city manager avoided making a nearly $600,000 fund balance transfer to balance the budget, though. Freezing funding for four vacant positions, cutting police salaries by 5 percent and eliminating pay raises for all city employees made that possible, along with higher property revenues.

Property tax and electric rates will not increase this year, but wastewater and water rates will, because the city must pay for a full year's worth of water from the NRWASA plant and make up lost revenue from Smithfield's closed Vernon Avenue plant, Stevens said.

David Anderson can be reached at (252) 559-1077 or danderson@freedomenc.com.

FY 2010 budget highlights:

- No increase in property tax rates, electric rates or environmental services and stormwater fees

- City residents who pay their bills by credit card will be charged a fee after Sept. 1

- Water rates:

$2 increase in base rate for customers inside city limits, $4 increase for customers outside

11 percent increase in volumetric rates for non-industrial customers

16.6 percent increase in bills of inside customers using 5,000 gallons per month

-Wastewater rates:

No base rate increase

25 percent increase in volumetric rates

11.8 percent increase in bills of inside customers using 5,000 gallons per month

- $2.1 million in proposed capital spending for two fire trucks, 10 police cars, two dump trucks, two backhoes and one electric line truck

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