City Council members Wednesday mulled a cost-cutting plan that would allow the city to hold the line on property taxes.

No consensus emerged in the council’s final meeting before a Monday night deadline for setting the fiscal 2009 tax rate.

To keep taxes at last year’s level, the city must cut more than $300,000 from the fiscal 2009 budget adopted by council members in June.

Councilmen Benny Burgess and Barry Cheatham advocated a “revenue-neutral” tax rate of 77 cents per $100 of assessed property value – and proposed a series of specific budget reductions to achieve it. Mayor Jim Councill said he prefers a rate of 80 cents or 82 cents, the latter of which would not require budget cuts.

Despite the mayor’s call for a council “consensus” in advance of Monday’s final vote on a tax rate, Vice Mayor Raystine Johnson and council members Mark Fetherolf, Raystine Johnson and Rosa Lawrence did not express their intentions.

The council will vote on the tax rate after a final public hearing at its regular meeting Monday. At a public forum two weeks ago, property owners criticized a proposed 85-cent tax rate that would bring 10 percent more revenue than the city received a year ago.

The city’s biannual property reassessment delayed the setting of a tax rate for the fiscal year that began July 1. The controversial reassessment boosted property values in the city by nearly 17 percent. Based on the higher assessments, a tax rate of 77 cents would produce the same amount of revenue as last year’s rate of 90 cents.

Consistent with the cost-cutting plan proposed by Burgess and Cheatham, interim City Manager June Fleming presented a staff plan to reduce spending by 5 percent in all areas except public safety and “enterprise funds,” including electricity, water and sewer, which are self-supporting through usage fees.

Neither plan would cause layoffs of current city employees, but several jobs that are budgeted but not filled would be eliminated. Both plans include savings derived from Fleming’s volunteer service as city manager while the council searches for a successor to Bucky Taylor, who resigned in July.

The Public Works Department would be hardest hit, losing up to six budgeted positions.

Councill, just back from a briefing by Gov. Tim Kaine to the Virginia Municipal League on the impact of state budget cuts on localities, urged his colleagues to adopt at least an 80-cent tax rate in anticipation of shortfalls in tax collections during hard economic times.

“We will be poor stewards if we don’t prepare for this,” Councill said. “We may have to start sending (city employees) home,” he added, noting the city’s meager “rainy day” fund, which is currently budgeted at $100,000.

Burgess and Cheatham said their plan, which assumes a 95 percent tax-collection rate, would add $60,000 to the reserve fund.

The mayor also presented an analysis of the impact of various tax rates on homeowners.

For example, the owner of a home assessed at $200,000 would pay $1,640 in taxes at an 82-cent rate, or $100 more than at a 77-cent rate.

“While none of us wants an increase at all, any of those numbers isn’t going to be a deal-breaker for most households,” Councill said of tax-increase scenarios in the analysis, “but it could be a budget-buster for us.”

Fleming cautioned council members and citizens that any changes in this year’s budget would be a short-term fix and that more difficult budget decisions loom as funding sources shrink.

“I want to get us through this year so that next year we can look at the absolute hard decisions that will have to be made,” she said. “We are going to have to cut services. When we cut services, you are going to feel it. This is not a threat; this is just a warning. It’s not a pleasant thing to do but is absolutely a necessary thing to do. The adjustments this year are nothing compared to what we’ll have to do in the future.”

The council tabled Fleming’s request for an exception to a citywide hiring freeze so that she can hire a finance director to replace Andy Rose, who moved recently to Georgia.

Council members approved Fleming’s recommendation that Joe Ann Faulk be promoted to acting finance director and receive a 10 percent pay increase.