COEUR d'ALENE - The high-water mark for next year's budget is all but set.

The city of Coeur d'Alene is moving forward with its proposed $77.97 million fiscal year 2011-2012 financial plan. Next up, putting it before the City Council Sept. 6 for adoption.

"We didn't want to raise taxes and we wanted to balance the budget," Councilman Al Hassell told the city financial team following Thursday evening's workshop, which outlined key components of the 85-page financial plan that details expected city spending to the cent. "And you took it to heart."

With many of the city's revenues, including from the state, mirroring last year totals, the proposal does anticipate shifts in some line items.

Included in the package is $628,000 cost of living increases spread out over 353.5 full-time equivalent positions for the city.

Merit pay, equaling another roughly $187,000, will bring the pay increases to $815,600.

Merit pay is achieved through longevity on staff, and is in addition to COLA, so some employees could see 8 percent increases next fiscal year.

The COLA and merit increases are tied to three contracts the city has with its collective bargaining agencies. The city had room to make good on the contracts without amending them, as it had the previous two years due to budget reasons.

The city's Human Resource Department is tallying the number of employees who could hit the 8 percent increase next year, as requested by The Press Thursday.

A decrease in supplies and services by $316,500, new growth adding $345,000 in property taxes, an increase of $133,000 in annexation fees and $90,000 saved because the police department will no longer absorb the school resource officer program in the Coeur d'Alene School District, since the school district is taking it back on, helped fund the increase.

Not included in the proposal is a property tax increase. The city is allowed to request a 3 percent increase from the previous year, but is not asking for a raise. It's $2 million in forgone taxes - essentially taxes the city is entitled too but did not take over the years - makes it the second highest total for all Idaho cities, Troy Tymesen, finance director, pointed out.

A 3 percent request could have netted the city nearly $500,000.

What that does to the levy rate remains to be seen. Likely it will still go up based on projected Kootenai County valuations, Tymesen said.

So property taxes could go up for homeowners if their valuations remained the same or increase, or could drop if the valuations dropped.

Coeur d'Alene's $3 billion valuation is expected to drop, once the numbers are final, by nearly 12 percent, or roughly $365 million. Taken those numbers, property owners for a $100,000 home paid $5.76 per 1,000 square feet this year. Adding the decrease in the homeowner's exemption, that same house, should it's value remain the same would pay $6.50 per 1,000 square feet.

The 353.5 proposed full-time equivalent positions in 2012 is up .87 positions from the current plan. However, three years ago the city had 363 positions. Taking into account four positions now funded by federal grants in the police department, the city has cut back 14 positions from its payroll.

"How do we avoid layoffs," Tymesen said. "Because we did not grow (personnel wise) when times were really good."

The city has plans to add four new police cars, two front loaders for the street department and $60,000 for design plans for a office expansion on the south side of City Hall for its criminal legal department, which currently rents office space.

The plan will go before the City Council at 6 p.m. Tuesday, Sept. 6 in the Community Room of the public library. Public testimony will be taken.