SANDPOINT — City Council adopted a $40.1 million budget Wednesday after passing up raises for elected officials.

"I think the increases for council and for mayor could be used elsewhere to a greater benefit," said Councilman Thomas Eddy.

The other council members agreed and entered a discussion as to what to do with the approximately $27,000 in funds before a motion was passed. Had it been approved, council member salaries would have increased from $400 to $667 per month, and the mayor’s salary would have increased from $1,200 to $1,537.

Since the money for the rejected raises was already included in the budget, council had two options to consider: reduce the overall budget amount, or reallocate the money to another area of the budget before officially adopting it.

Councilman Bob Camp wanted to reduce the budget. Councilwoman Deb Ruehle had some ideas for use of the funds, including connecting a sidewalk along an area of Ontario Street, as well as putting some toward the watershed to mitigate erosion along bike trails.

Jennifer Stapleton, city administrator, said staff recommendation is to reallocate the funds to the downtown street revitalization project, since the city is required to pay the upfront costs over the next three years with reimbursement by SURA over the course of 12 years.

"We are having to do interfund loans for that project, and we've had to set aside reserves to be able to fund that project until we are paid back by SURA," Stapleton said.

Council members agreed and a motion was passed to reallocate the funds, followed by the official adoption of the 2018 budget.

In the most likely scenario outlined by Shannon Syth, city treasurer, at a previous council meeting, construction costs over the next few years will total an estimated $7,440,500. SURA funding through 2029 is estimated at $6,923, 606, leaving an unfunded balance of $516,894. Stapleton said the city plans to pursue grants and other funding to offset that amount as well.

The 2018 budget of $40,136,717 is an increase of $716,897 — 1.8 percent — over the current year's budget. The operating portion of the budget is $22,858,318 and capital improvements make up $17,278,399 of the expenditures, Stapleton said. Some upcoming capital projects include the downtown revitalization project, Memorial Field turf, Oak Street bike path, a self-contained breathing apparatus for the fire department, alley crossings and sidewalk connections, pathway interconnectivity on Boyer, LED street light replacements downtown, bullet proof vests and ADA improvements.

The beginning cash for revenue in the 2018 budget is $7,475,043. Revenue from property tax is projected at a 1.8-percent increase over the current year, with a total amount levied in 2018 of $3,963,615. "Other" taxes make up $2,156,680. More revenue sources include licenses, permits and fees, grants, intergovernmental revenue, charges for services, fines, investment earnings, rents and royalties, contributions and donations, interfund transfers and other income to equal the $40.1 million in expenditures.

Mary Malone can be reached by email at mmalone@bonnercountydailybee.com and follow her on Twitter @MaryDailyBee.