Billings' bird's-eye view

PROVO — From a helicopter flying over the city, Provo Mayor Lewis Billings laid out a bird's-eye view Tuesday of his proposed $139 million budget for next year.

The proposal does not call for new taxes but does include a 5 percent increase in water rates. It also calls for a raise for city employees and a new loan subsidy to iProvo, the city's ambitious and controversial telecommunications project that by next week will make broadband Internet, telephone and digital video services available to every home in Provo.

Billings disembarked from the helicopter to stride into Tuesday's press conference at the Novell Incubator and present a copy of his plan to the City Council, which has until late June to approve a budget for the fiscal year that begins July 1. The mayor's staff also made a 30-minute budget presentation to the council on Tuesday night.

The mayor's proposal includes room for loans of up to $2.1 million over the next year to help iProvo make its bond repayments on time.

"That number is probably in the realm of the extreme," Billings said. "I would like to see it be much less than that."

In March, the council approved a $1 million loan from the city's energy fund to iProvo.

The proposed budget projects 60 new iProvo customers a week, which Billings believed was conservative. He said the project has nearly 6,000 customers. It needs at least 10,000 customers to break even and pay back a $40 million bond.

Vince Hancock, a Qwest spokesman, said the company has "long said government shouldn't get into the telecommunications business. This loan validates our position that this is a risky scheme that jeopardizes taxpayers."

Billings said a strengthening economy allowed him to propose a 2 percent cost-of-living increase for city employees that would start on July 1, the first day of the new fiscal year.

Last year, employees got a 1.5 percent COLA increase that didn't kick in until January.

The city also would continue to share savings 50-50 with employees if operational accounts come in under budget. Billings said employees earned about a 1.6 percent bonus last year through the program.

The proposed 5 percent water rate increase would follow a 6 percent hike last year and a 6.5 percent increase the year before. Even with the back-to-back-to-back hikes, only Orem and American Fork would have water rates lower than Provo's among Utah County cities and towns, Billings said.