POST FALLS - The Post Falls City Council is moving ahead to shape the fiscal year 2015 city budget with no property tax increase.

During a workshop with city department heads Tuesday night, no council members voiced the need to increase taxes to maintain the level of service in the year ahead.

"If there's a justifiable and defensible reason to take an increase, that's fine, but my preference would be no increase," Mayor Ron Jacobson said.

The consensus of the entire board was to move ahead with no tax hike. The last time the council approved a tax increase was for fiscal 2012 at 2 percent. Government agencies can approve as much as a 3 percent hike.

The public hearing on the budget will be Aug. 19 at 6 p.m. The council will hold another budget workshop in July to finalize the budget proposal.

The city's current General Fund budget amount is $18.7 million.

The fiscal 2015 budget is proposed to be $19.9 million.

City Finance Director Jason Faulkner said the increase is largely due to the budget proposal including grant-funded expenditures.

The proposal includes an across-the-board 2 percent cost-of-living adjustment (COLA) increase for employees.

Large expenditure requests in the budget proposal include:

* The $550,000 Seventh Avenue modernization project, which will be funded by multiple sources

* $74,000 worth of safety improvements to Mullan Avenue and Idaho Street, a grant-funded project that requires a $4,500 match from the city

* The $800,000 Highway 41 trail project from Seltice Way to Mullan Avenue, which is grant- and urban renewal-funded

* A $49,000 citywide signal timing system, which is grant-funded with a $2,670 city match

* Three new police cars, totaling $130,000.

The council also won't likely take any foregone taxes to develop the budget. The last time it did that was in fiscal 2009.

City staff said revenue to date from liquor sales is comparable to recent years, but income from building permits is down from a year ago.

In an online citizen comment questionnaire completed by 40 residents, the top budget priority was police, followed by streets.

Another proposal supported by the council during the workshop was reducing the maximum number of paid-time off (PTO) hours that can be accrued by an employee from 330 to 290.

In other business, the council, on a 4-2 vote, approved an ordinance allowing the zoning at 324 N. Corbin Road to be changed from single-family residential to multi-family residential. Mike and Cathy Solomon made the request for the 4-acre site along Interstate 90.

Council members Skip Hissong and Alan Wolfe voted against the ordinance.

The June 17 council meeting is canceled due to some staff and Jacobson being out of town.