For months, Mayor Dave Cieslewicz warned of the most painful budget in two decades.

City agencies, asked to identify 5 percent budget cuts, offered dire scenarios, laying off cops and firefighters, raising bus fares and letting snow pile up more before plowing.

Taxpayers trembled.

The reality — due to conservative early projections, modest cuts, raising fares and fees, tapping room taxes and reserves and last-minute luck — not so bad.

The mayor and his supporters say the budget, which increases spending 6 percent to $237.9 million, protects basic services — especially the police and fire departments — while adding only $53 in new taxes on the average home, the fifth lowest percentage increase in 30 years.

"The budget is better than most people expected," said Ald. Michael Schumacher, 18th District. "(But) it just hides and camouflages some of the pain. We have shifted money from other pots to cover the holes. We are still living above our means."

Ald. Satya Rhodes-Conway, 12th District, said she has lots of questions and isn't sure if the mayor's budget is brilliant or gimmicky.

"The jury is still out," she said.

The city's Board of Estimates begins discussing the budget next week and the City Council will begin making final decisions on Nov. 11.

The mayor made more than 50 cuts totalling $1.2 million. The largest cut was $231,000, which changes large item pickup from weekly to bimonthly.

"The cuts speak for themselves," Cieslewicz said.

The budget cuts 21 positions — 13 are vacant — but creates 25 positions, for a net gain of four.

But the mayor was able to raise the city taxes only 2.95 percent to $1,855 on the average home because he also:

• Got $2.15 million more than projected in state aid.

• Took $1.3 million more from the fund balance than in 2008.

• Took $1 million more from the room tax than 2008.

• Raised bus fares 50 cents to $2, plus corresponding increases, to get $682,000

• Got $1.17 million by increasing in ambulance fees.
The revenues helped offset rising costs, including $4.2 million more in debt payments, $4.1 million more for fuel and health insurance, and the bad economy, which is eroding building permit and investment revenues by $2.75 million.

The state aid made a huge difference, Cieslewicz acknowledged, adding that the numbers came in late in the process.

"If that hadn't happened, some of the things that had been put on the table would have come true," he said, naming the closure of the Monroe Street library branch, cutting the Community Services budget, and delaying the city's eighth ambulance.

Debt, fuel and health insurance costs, while high, all came in lower than projected, Cieslewicz said, adding, "The news was very bad instead of horrible."

The mayor said he didn't want to raise bus fares, and that he's only bringing ambulance fees to the level of those of neighboring communities.

Early, dire projections led the mayor to consider options that may not have been palatable before, Rhodes-Conway said.

"That opened a lot of different doors," she said. "I'm not saying that's a bad thing. There are cuts I agree with. There are cuts I do not agree with.

"I'm not comfortable with the bus fare increase," she stressed. "I think it's short-sighted to raise fares at exactly the same time more people want to ride the bus."

The mayor has delayed making truly hard choices, Schumacher said, adding that he's uneasy with using so much room tax, which should be reinvested in marketing to generate revenue.

The sums taken from the rainy day fund and room tax can be sustained in the future, Cieslewicz maintained.

Ald. Judy Compton, 16th District, praised the mayor for his effort but cautioned, "We still have too much pork. It's going to take a very sharp knife and a very big will to start cutting." She declined to be specific.

The mayor's budget also benefited from the closure of Tax Increment Financing (TIF) districts last year, which returned valuable property back onto the regular tax rolls.

The closures are the main difference between the 2.95 increase in taxes on the average $247,974 home and the overall 7.9 percent increase in tax collections, called the levy, which rose $12.1 million to $164.8 million.

The TIF money had another short-term benefit: the new wealth bumped the state levy cap from about 6 percent to 11 percent, which spared the mayor from having to make more painful cuts.

The city, however, will face a levy limit in the neighborhood of 6 percent next year, which may force tougher choices for 2010.

"I'm concerned Rhodes-Conway said. "We have to prepare for being in a down economy for several years. We need to think about it."

The mayor said the proposed budget balances the community's desire to keep taxes low but maintain good services, and that he's confident the city is postured to deal with an uncertain future.

"I think it's doable," he said.