Tim Gobble

East Ridge's city manager says next year's budget will not include a property tax hike, but that could change as the city seeks to cope with the fallout from Tennessee American Water's decision to cancel its 60-year practice of providing sewer billing services.

In a 15 minute briefing during the East Ridge City Council's Thursday agenda session, City Manager Tim Gobble briefly outlined the main adjustments to the $16 million budget, which projects a $70,000 to $90,000 surplus.

Though Gobble said a property tax is not necessary up front, city officials say they may need to adjust their sanitation fee to deal with the canceled billing services -- an obstacle most local governments are facing after Tennessee American's decision. The city could stand to lose $216,000 in revenue from the cancellation, Gobble said.

"I think we ought to raise the taxes and completely do away with the sanitation fee," Councilman Darwin Branam suggested during the work session. "Those are the kinds of decisions that are really going to affect the budget."

Councilman Denny Manning spoke up against that idea, saying the city needed to eat any extra costs, while Councilman Jim Bethune said the council needed to discuss more options.

Though there is no employee raise planned in the budget, Gobble said at this point the city did plan to assist employees with rising health insurance costs.

He said it was too early to tell what the difference was between a raise and the increase in insurance pay.

Employees currently pay 17 percent of their insurance premium if they have a family, and 10 percent if they are an individual.

Last year, the budget included a 30 cent property tax raise to make the current rate of $1.42.

The council also raised the city's hotel-motel tax by 30 percent earlier this year. Gobble said that revenue will be directly channeled to debt service.

The council is slated to vote on a first reading of the budget during its April 27 meeting.