Money also will be needed to develop the 68-acre Hagerstown Fairgrounds, improve the city's homeownership rate and maintain a revolving loan fund to help businesses.
A property tax hike would help offset flat property tax revenues, said Zimmerman and Martin. The market value of existing property in the city is expected to increase by only 1.5 percent in the coming fiscal year, Martin said.
Property taxes, based on property value assessments, bring in 57 percent of the money in the city's general fund, the proposal says.
The general fund, the city's main operating fund, pays for operations such as the fire and police departments, finance office and public works.
The spending plan calls for a 6.6 percent, or $1.3 million, increase in the general fund budget, bringing it to about $21 million.
If approved, the property tax hike would be the first for the city since fiscal 1990-1991, when the tax was raised from $1.68 per $100 of assessed value to $1.71. The rate has been $1.70 per $100 of assessed value since the previous administration dropped it a penny for fiscal 1995-1996.
"We've done a good job. We have a strong history in the city of being able to manage our budget," Zimmerman said.
Zimmerman said he expects the council to seek other ways to balance the budget. Council members could cut the tax hike.
Zimmerman's proposed budget calls for spending to decrease by 5 percent, chipping $3.7 million from the current $77 million budget.
Decreased spending is recommended, in part, because of an expected $2.8 million drop in City Light revenues due to the closure of the 1st Urban Fiber paper recycling plant. The plant, which shut down on Aug. 7, 1997, would have used a lot of electricity for its pulp recycling operation.
In addition, the city will receive about $1.2 million less in community development block grant funds than it did this year.
Spending will decline because construction of the $4.7 million William M. Breichner Water Treatment Plant near Smithsburg was finished last fall and improvements to the sewer plant off Frederick Street won't be as high as expected next year, Zimmerman said.
The budget proposal includes 5 percent rate hikes for the city's 75,000 water customers and 5.5 percent rate increases for the city's 15,035 sewer customers.
City officials have anticipated small rate increases spread over several years to help pay for improvements to the city's water and sewer plants. Originally, city officials were considering a 6 percent water rate hike.
The average city customer inside the city limits, who uses 13,000 gallons every three months, pays $35.88 a quarter for sewer and $15.08 a quarter for water. If the increases are approved, those quarterly rates would go up by $1.97 for sewer and 75 cents for water.
City customers who live outside the city limits usually pay more.
A rate study expected to be complete in about a month could result in sewer rate increases of more or less than 5.5 percent, depending on the customer classification, said Project Coordinator Austin Abraham.
A public hearing on the proposed budget and property tax increase will be held at 7 p.m. in City Hall on Tuesday, April 28.
Copies of the proposed budget will be available for review at the Washington County Free Library and in the City Clerk's office on the second floor of City Hall.
City Council members are expected to adopt a budget on May 26.
Martin expects to end the current fiscal year with a $200,000 deficit. A large chunk of the deficit is attributed to police overtime costs.