CENTRAL POINT — Building a 3 million-gallon water reservoir, buying energy-efficient vehicles and avoiding reduction of existing city services are the highlights of the city's $29.7 million proposed budget for next fiscal year, which begins July 1.

CENTRAL POINT — Building a 3 million-gallon water reservoir, buying energy-efficient vehicles and avoiding reduction of existing city services are the highlights of the city's $29.7 million proposed budget for next fiscal year, which begins July 1.

Presented to the City Council in April with a budget message dubbed "good news/ bad news," the 2011-12 budget brings a slight increase over $28.6 million last year and $24.7 million in 2009-2010.

Mayor Hank Williams said the city "got everything done without a tax rate increase and without getting rid of too much."

"Those were the marching orders for the city manager, that we didn't want a tax rate increase," Williams said.

Expected to be approved in June, the budget required a handful of personnel cuts because of a continued slump in new development. The city will lose a full-time community planner, a full-time automotive maintenance technician, a full-time building technician and a quarter-time senior activities coordinator, bringing the number of total city staff positions to 72.5.

Projects on the horizon this year include building the 3 million-gallon water reservoir near Don Jones Park, expected to cost some $5.6 million, and replacing city vehicles with alternate fuel and hybrid vehicles.

The police department hopes to convert all non-leased vehicles from gasoline to propane with the help of a grant, yielding a savings of a third of the department's annual fuel costs.

Just over $300,000 in motel tax dollars will be used toward a chamber tourism guide, events at the county fairgrounds, a July 4 celebration, Battle of the Bones and a "Walldawgs" mural event.

The city also will consider formation of an urban renewal agency, which could lower the amount of taxes available to the city in next year's budget but would divert funding for needed improvements in coming years.

The City Council approved formation of a six-member urban renewal advisory committee in October last year. In March, the committee completed a feasibility report on what urban renewal would mean for the city.

"We could raise the tax rate if we wanted to, but it's not the time to be doing that," Williams said. "I think we have a decent budget. We have a good tax rate and our money is managed really well."

Buffy Pollock is a freelance writer living in Medford. Email her at buffyp76@yahoo.com.