DANVILLE — After hearing from 11 residents at a tax levy public hearing Tuesday night, the majority of who oppose the proposed property tax increase, the city council placed on file for a month a 2008 city tax levy that remains at $6.9 million, a 7.97 percent increase from last year.

The levy, however, still can change up to the council’s final vote on Dec. 16.

The levy is increasing due to increases with the pension funds, 12 percent for the police pension, 8 percent for the fire pension which includes large unfunded liability costs due to past years when there was little or no contributions made to the funds; an approximately $55,000 increase in the library levy; 7 percent increase with the Illinois Municipal Retirement Fund and Federal Insurance Contributions Act; and an 8 percent increase to bonds and interest due to the city needing to take out a bond to contract the Fairchild Street Subway engineering study to replace or rebuild the structure.

No money from the property tax goes into the general fund for city employee salaries, road repairs, equipment purchases and other day-to-day city expenses.

Aldermen also Tuesday night learned that a rough 2009-10 budget shows a $1.4 million deficit, which includes a 7 percent expenditure increase with contractual, utility and commodity increases.

Cuts in expenditures or an increase in revenues still are necessary with an increase in the property tax levy, Mayor Scott Eisenhauer said.

And as some aldermen want to see the property tax levy remain the same, the deficit would increase to about $2 million.

Eisenhauer said while aldermen should consider this option, “aldermen must have the courage to cut expenditures in a way necessary to balance the budget or generate a revenue equal to the deficit.”

“We have to start creating public policy for the long-term success of the city,” Eisenhauer said.

Eisenhauer has not yet proposed cuts, but the cuts will only aid next year’s pension and IMRF numbers, not this year’s.

Tuesday’s public hearing, that attracted about 50 residents, was necessary because the city’s proposed tax levy would increase by more than 5 percent from last year.

Eisenhauer reminded residents that 18 percent of their property tax bill goes to the city. The school district, county and other taxing bodies receive other amounts.

He also reiterated that the levy could increase and the tax rate decrease, which has happened during the last four years. The rate depends on the equalized assessed valuation, released in the spring, which now is projected at a 0 percent increase.

Last year there was a 10 percent increase in the EAV. Therefore the levy went up 2 percent while the rate decreased 2 percent.

Resident comments included: Jerry Hawker calling Eisenhauer’s presentation a lot of “smoke and mirrors” and questioning the bulk of the problems being put on the fire and police departments when there are other areas that could be cut; Realtor Ann King asking aldermen to not raise taxes and not force more people to leave; and downtown businessman Bill Burnside supporting the approximately $32 increase in his downtown property tax bill with the proposed levy increase.

“I don’t think it’s too much to pay for great police, fire services,” he said.

Other comments included homeowners asking the city to hold the line with taxes; one noting they’ve seen almost a $1,000 increase in what they pay in property taxes in 14 years and saying maybe city staff should be cut with the population decrease; and residents’ incomes are not keeping up with the tax increases.

Real estate agent Bill Jenkins added that the city must work with the county to address the inequity of the current taxing system with similar properties seeing significantly different tax figures and paying different fees, such as to the airport.

“I think if we all pay our fair share, the city wouldn’t have budgetary issues,” he said.

“Sacrifices have to be made,” Jenkins added.

Bayside Drive resident Laressa Witt said she’s paying about $12,000 in taxes this year. She moved here a year ago, thinking she was coming to a place where her dollar would go farther. Now she’s not sure she can stay here in the next few years.

She said it’s not the time to raise taxes, but make cuts. Also, she said tax system and duplication of services must be fixed.

In other business Tuesday, the council:

-- Learned there are wiring problems with one of the city’s new automated garbage trucks. It’s being serviced under warranty.

-- Approved reappointing Mike Puhr and appointing Sandy Lawless to the Danville Housing Authority Board, reappointing Nanette Mellen and Gene Washington to the Fire and Police Commission Board and appointing Thomas O’Shaughnessy as a hearing officer.

-- Approved making the intersection at Vermilion and Seminary streets a permanent all-way stop.

-- Retained PersonalCare as the administrator of the city’s self-insured health insurance plan and entering into an agreement with Coventry Health & Life Insurance Co. for the city’s reinsurance coverage.