POST FALLS - The proposed Post Falls city budget for fiscal year 2016 includes a 1 percent cost of living increase, merit raises up to 3 percent and no property tax hike.

The city council will hold a public hearing on the proposal on Tuesday at 6 p.m.

"The total maximum raise is budgeted at 4 percent," said Shelly Enderud, city administrator. "This is pretty consistent with the other cities (based on staff research)."

The merit raises will be based on performance evaluations, said Jason Faulkner, finance director.

The amount budgeted for the cost of living increase is $96,500, while $289,500 is set aside for the merit hikes.

The proposed General Fund budget amount is $17.17 million, which is $419,000 less than the current year.

Two new positions are proposed, including an emergency communications officer budgeted for $54,459 and a street worker for $52,892.

Other budget highlights include police vehicle replacements, $130,000; street reconstruction, $80,000; ADA sidewalk improvements, $100,000; striping, $5,000; radio system for the street department, $20,000; ADA improvements to city buildings, $40,000; and legal services, $25,000.

Faulkner said the city expects to bring in $40.7 million in new construction dollars in the next fiscal year and nearly $500,000 in annexation fees.

The city has more than $2 million in foregone taxes available, but it does not plan to use those funds in the next fiscal year.

Faulkner said the city will continue to assess the street light fee on residents' utility bills despite Kootenai County resident Larry Spencer's suggestion to pay for lights through the General Fund. Spencer's argument was based on a U.S. Supreme Court decision distinguishing fees from taxes in that fees are based on usage by individual homeowners, and services funded by taxes benefit the general public.

The city's proposed budget is available at www.postfallsidaho.org on the Finance page. Click on the "Budget Detail FY16" button.

* Meanwhile, the council will also consider whether to allow Viking Construction to proceed with an annexation request for the proposed Viking Estates subdivision. The proposal consists of 87 single-family lots on 37 acres east of Syringa Street between 16th and Horsehaven avenues and south of Post Falls High School.

The Planning and Zoning Commission in July recommended that the council approve the request if nine conditions are agreed upon. No public comment was received at the public hearing held by the commission. Dave Fair, the city's parks and recreation director, has requested the need for pathways and trails be addressed in the final plans.