In a close vote, the Payson City Council approved a $5.5 million budget Wednesday for 1988-89 that will maintain city services without raising taxes.

The budget is 8 percent larger than the 1987-88 budget, but the extra revenue will come in increased utility profits."We have had three big businesses move in, and they use a lot of water and power, which gives us a profit," Mayor Curtis Arrington said. "We have American Stores, McDonald's and a motel."

He said Payson can expect more sales tax revenue from the new businesses and from the state legislature's decision to redistribute sales taxes from large towns where people shop to some of the smaller towns where the shoppers live.

Some of the money will be used to give all permanent city employees a 53-cent-per-hour raise.

"We had originally talked about giving a 5 percent raise across the board," Arrington said. "But that would give the top earners a lot more money than the people at the bottom. Council members felt a flat raise every few years would help keep the top and the bottom closer together."

The mayor also said this will be the first year the new golf course can begin paying for itself.

"We think it will take in about $200,000. We anticipate it will not be a money maker this year, and it will still have to be subsidized with about $25,000, but we are making more money than we expected to the first year."

Funds were also set aside to buy a new firefighting truck.

"It will be a brush truck. It's like a pickup truck with a water tank in back, and it is used to fight brush fires. It can get into areas where larger trucks can't," Arrington said.

"We have five trucks now," Rod Watkins, city administrator, said. "One of them probably has more value as an antique than as a firefighter."

Payson also boasts a reserve fund of about $250,000.

"We have saved it over the last eight years," Arrington said. "The philosophy is, the money will allow us to help ourselves in an emergency, or to take advantage of opportunities that come along. An example of a business opportunity would be if a large company wanted to move into our industrial park, but only if we could get utilities in quickly."

It could also help Payson weather the storm if the Utah state tax-limitation initiative passes.

"We are guessing it would cost us about $130,000," Watkins said. "About $30,000 from class C road money and $100,000 in property tax." Arrington said he is not sure how such losses would affect individual city departments.

The city's streets budget will increase more than $92,000 over the current year's. Arrington said some funds will be used to pave an area near the recreation center and a parking lot at Hillman Field.

He said the city's pool would be renovated, and there would be improvements to the culinary water system.

Two of the five council members voted against the budget. Councilman Stephen Hanson thought the police budget of $487,919 was too high, and should be maintained at the 1986-87 level of $471,341. Councilman Mike Rogers said he didn't feel he had put enough time into studying the budget, and wanted to interview department heads about their needs.

The budget will go into effect July 1.