PROVO — The Provo City Council sent the proposed 2009 budget back to the drawing board earlier this week, instructing city staff to find funding for employee benefits.

While most council members agreed Tuesday the city is facing a tight budget year, they didn't agree with Mayor Lewis Billings' recommendations for the upcoming year to scale back employee pay grades, cut their cost-of-living adjustments and to require them to pay a portion of rising health-benefit costs.

Instead, the council voted to send the budget back to city staff requesting alternatives to find money to cover some of those employee needs.

"We have to look after our own," City Councilwoman Midge Johnson said.

As currently drafted, the proposed 2009 budget of approximately $149.2 million doesn't allot a cost-of-living adjustment to city employees. It also changes the first five steps of employees' pay range from a 5 percent annual pay step for the first five years of employment to an approximate 2.5 percent annual pay step for the first 10 years of employment.

The proposed budget would also require city employees to pick up a portion of the rising costs of health benefits. Provo Finance Director John Borget said the cost of family health insurance is expected to rise from about $853 per month in 2008 to $1,048 in 2009, and single coverage could increase to $578 from $467.

According to the proposed budget, city employees would pay a portion of that increase — $60 per month for those with family coverage and $34 for those with single coverage — starting in January 2009.

City employees have objected to the proposed changes, saying the budget is being balanced on their backs. Borget said the city is facing a difficult situation and has exhausted a variety of remedies to balance the budget. The proposed budget reduces city department costs by $539,070, and increases fees, including those for parking tickets and city sports programs, by $516,689.

"We didn't want to have to go to the employees," Borget said.

But Johnson said she thinks more can be done to cut the fat and help employees.

For starters, she said they could raise taxes to keep up with the costs of maintaining the city, increase the contribution of the energy department to the city's general fund, or postpone some of the capital improvement projects. That would generate the $607,370 necessary for a 2 percent cost-of-living adjustment to help employees cope with inflation.

"That's what's going up for everyone," she said. "Gas and food and rice and rent — those things are so high."

City Councilman George Stewart, on the other hand, said it was more important to fund employees' health benefits and maintain the pay step adjustments. He said the 5 percent pay step is what motivates most employees to come work for the city.

"That's kind of like a promise," he said. "I'd hate to see that taken away."

Stewart recommended increasing fees for energy, wastewater, water and sanitation to generate $907,353 to meet those employee benefits as well as to reduce deficits in the enterprise funds.

Billings said if anyone wanted to give the employees everything they needed it was him. He also said city staff would be willing to go back and re-examine the budget, but he didn't like the idea of taking money from the enterprise departments or postponing capital improvement projects. He preferred the city staff be given flexibility in deciding where to trim from the budget.

"I'm just uncomfortable that we're willing to borrow from the future," he said. "We have to stay within our means."

Johnson said the city's future is in its employees.

"We're borrowing from the future if we're not helping them out," she said.

The council voted to instruct city administration to give them alternatives for funding employee health benefits, pay grades and a 1 percent cost-of-living adjustment.

Provo City Employees Association president Skip Tandy said he appreciated the mayor and council's willingness to rehash the budget to address city employees' needs.

"We are so happy with the council and the working relationship they have with the mayor in looking at these alternatives," he said.

The City Council will address the budget at their next City Council Meeting scheduled for 7 p.m. Tuesday in the Council Chambers at 351 W. Center.

E-mail: [email protected]