and Danny Barrett Jr.

Vicksburg residents’ base rates for gas, water, sewer and garbage services will increase for the second year, officials said at a hearing to discuss the city’s proposed Fiscal Year 2007 budget Thursday.

The majority of the board views the increases, deemed &#8220minor” adjustments by Mayor Laurence Leyens, as a final step in the months-long budget process and a continuation of the hikes instituted to cover a $2.4 million net operating deficit in utility funds under the current budget, said Strategic Planner Paul Rogers.

Though the shortfall was known, the decision to increase rates came only after meetings hours before the hearing Thursday, said South Ward Alderman Sid Beauman.

&#8220We couldn’t vote to raise it all at one time (last year),” Beauman said. &#8220That’s too big a hit.”

The city tries to operate the utilities to break even, not as an income source for other operations. Beauman stressed the increases were to curb losses in operating and maintaining utilities rather than purchasing costs, a deficit which in the proposed 2007 budget rises to an estimated $3.9 million. Much of that shortfall will be deferred through capital projects in coming years, Rogers said.

Natural gas rates will go up $1.90 per 10 ccf, Rogers said, which will add $3 to $5 to summer bills but could cause bills in the winter, when usage spikes, to go up $20 or more. Gas bills also have cost adjustments, which have been varying monthly according to what the city is paying suppliers.

Hikes in water and sewage of 25 and 26 cents per thousand gallons, respectively, will add around $1.75 to an average monthly residential bill.

The city increased gas, water and garbage collection rates as part of its current budget last August in an effort to decrease the general fund subsidy being transferred to its gas, sewer, water and residential garbage collection costs by passing the cost onto users instead. The rate for natural gas, which most city residents use for heating, was increased by 25 percent. Water rates went up 15 percent and sewer bills, which are based on water use, saw a 5 percent rate increase.

Since, the board has approved three monthly increases in gas rates to pass along increasing costs and approved an additional $2.5 million allotment to the city gas fund in April. In June, rates were dropped from $19.20 per thousand cubic feet to $15.86.

&#8220This is a snapshot of where we are at this point,” Leyens said. &#8220We will not hesitate to amend the budget as we need to. We consider this very much a living document.”

North Ward Alderman Michael Mayfield, who cast the lone dissenting vote against Leyens and Beauman in the decision to raise rates last year, said after meeting with Rogers about the numbers this morning he would vote against future increases as well.

&#8220I just can’t support an increase until I feel the department has really positioned itself to where you don’t have a choice. Hopefully we’re not in dire straits,” Mayfield said. &#8220When I talk to people – and I’m still getting calls from the last increase -the general public just can’t seem to swallow these repeated increases.”

The total budget presented Thursday was the expected $28.6 million, about $124,000 less than the estimated $28.77 million Rogers expects the city to receive in revenue. The majority of city money in the general fund – for the coming year, more than $22 million – comes from property taxes, sales taxes and gaming fees.

The &#8220overage” on funding requests from department heads for the upcoming year was roughly $2 million, one of the lowest amounts in years. Among big-ticket items left out were a $1.6 million generator for the Water Treatment Plant and $100,000 for parade barriers for the Police Department.

Despite the financial health, Leyens has said he was interested in cutting personnel to reduce the burden of a payroll that currently takes up abut 70 percent of total spending. For this year, Leyens led a push to cut the Department of Human Services’ $530,000 budget from the overall spending plan.

&#8220Even if it’s not referenced in this budget, we will still try to look for cuts in payroll where we can find it,” he said.

Also not in the spending plan is the $10 million to $12 million expected to be raised in a fall bond issue. So far, ideas are to fund an urban renewal of historic riverfront properties from Washington Street west to the Mississippi River and Yazoo Diversion Canal in the Oak Street Corridor with some of that money. Portions will also go to a replacement for the Washington Street bridge near Clark Street, the first phase of a $20 million recreational complex on Fisher Ferry Road and $7 million in citywide paving projects. Specific locations of the planned paving have not been determined, said Public Works Director James &#8220Bubba” Rainer.

The city still has roughly $10.6 million to pay on its last bond issue, $18 million borrowed six years ago, much of which was spent on downtown business renewal. Rogers has said the city will pay $2 million a year through 2011 on that debt. By the end of 2007, the city’s total shortfall is expected to sit at $8.69 million, Rogers said, its lowest mark since 1991. Paid off this year was the last of 10 years of notes on $12 million borrowed to build the Vicksburg Convention Center.

The spending plan the Warren County Board of Supervisors will take up at its budget hearing Sept. 5 is not expected to contain any tax increases, despite new spending for pay raises and public safety.

Broken out, the county will spend $872,817 more in its 2006-07 budget, one that will have a general fund of $13,806,409 according to an initial draft. The general fund was $12,933,592 for 2005-06.

The exact figures have shifted throughout the summer-long process of setting the budget and could be adjusted again.

The new funding entails: