COEUR d'ALENE — The city of Coeur d'Alene's initial budget for the upcoming fiscal year contains raises for city employees, as well as a proposed 3 percent increase to property taxes.

Department heads, city officials, and the city council met Wednesday morning for a workshop to discuss a proposed budget totaling $95.7 million, which Finance Director Troy Tymesen said has been in development for more than a month. According to Tymesen, Coeur d'Alene is in the business of service, which means people are its biggest asset.

"They accompany that with being a large portion of our expenses," he added.

Tymesen added the current fiscal year plan is approximately $86 million, and said planned purchases of equipment make up a large portion of the change. He also noted several other significant budget changes for the 2016-17 fiscal year, including $891,187 in additional salary to account for a 2 percent cost of living adjustment and merit-based raises.

Health insurance rates for city employees have also increased approximately 22 percent, and Tymesen said the city is on the hook for 7 percent of it.

The general fund balance and library funds total around $39 million, according to Tymesen. The city has an expected fund balance of $7.6 million.

"That's why I would be comfortable with looking to use some of that money to buy capital," Tymesen said.

To balance the budget, Tymesen and his staff proposed a 3 percent property tax increase, which he said would bring in an additional $588,663. Tymesen noted the city has increased property taxes by a total of 3.5 percent since 2010, adding state statute allows up to a 3 percent increase annually.

Councilmen Ron Edinger and Woody McEvers both expressed interest in lowering the proposed increase to property taxes, which Tymesen confirmed were not set in stone.

“Year after year it’s discouraging that we can’t seem to make ends meet without increasing what folks pay,” McEvers said. “I don’t know if there’s an answer but it’s one of those heartbreakers because we want to take care of our citizens and don’t want to raise their taxes. Yet I look at what I pay for and what I get.”

Tymesen responded by encouraging council members to address increase-related concerns by stating the city of Coeur d’Alene has one of the highest foregone tax balances of any city in the state of Idaho.

“That’s the measurement that says you have not taken the tax dollars you are eligible to take. Hayden cannot say that. Post Falls cannot say that,” he added. “My challenge is the fact that we have such a diverse city with all these people (employed by the city) and that ongoing expense just doesn’t go away.”

According to Tymesen, almost $2 million was removed by the finance department during the initial creation of the budget when individual departments submit their proposed numbers for the upcoming fiscal year.

"I’d say this thing’s about 85 percent of the way along," Tymesen said of the entire budgeting process. "We will continue to work on those expenses and see if there is anywhere we can cut."

During the first city council meeting in August Tymesen said he will present the council with a suggested high water mark — a dollar figure that cannot be exceeded as the overall budget develops throughout the year — for their approval. Tymesen added he will also present any new details that develop, as well as the results of his department's research into reducing the proposed 3 percent property tax increase.