Even though the city will need to dip into general fund reserves, its 2013 budget calls for keeping street repairs and basic services at current levels.

City Council, which voted preliminary approval of the budget and the 2013-17 capital improvement program on Dec. 17, has pledged to seek no income or property tax increases. Council did pass an ordinance establishing a hotel-motel tax as a new source of revenue.

City Manager Greg Horn said it’s “the tightest budget we’ve had” in his 21 years. “It’s a status-quo, battening down the hatches budget.”

Total expenditures will be more than $37 million.

Finance director Steven Hinshaw said the 2013 budget shows the city using about $2 million in general fund reserves. “But we typically budget conservatively. Our culture is to overperform in each department. I don’t think we will have dipped (from the current $11.6 million) to $9.4 million when we look at results next year at this time.”

Horn said discretionary spending continues to tighten.

“We’ve been cutting back methodically for 10 to 15 years, but that’s becoming more severe” due to the end of Ohio’s estate tax (which has averaged $2 million a year, or 15 percent of the annual general fund) and more than $400,000 in other state cutbacks, he said. “We’re not expanding programs or planning any new ventures.”

The proposed Cornerstone of Centerville development at Wilmington Pike and I-675 could impact that holding pattern.

The city’s capital improvement program for 2013 designates more than $10 million for streets and sidewalks, including $7.2 million in the Cornerstone development. Local funding is expected to be less than $2 million, with $8.2 million coming from other sources.

Infrastructure improvements there and near the Miami Valley Hospital South campus will be financed in large part through a proposed tax increment financing district, special assessments, state and federal highway grants. Estimated TIF revenues are based on values associated with the property after development.

“If Cornerstone doesn’t go forward as quickly as anticipated, there could be a gap in financing,” Horn said. “Because of that, the city needs certain assurances and guarantees.”

The annual repair program for existing streets and sidewalks in the city will be $1.7 million.

Centerville will include some its final estate tax collections in $5.7 million of debt-reduction payments on the city-owned Yankee Trace Golf Course, thereby saving on interest charges.

“Rather than invest surplus estate tax dollars at 1 percent or less, we are using part of these to retire debt for which we are paying 4 to 5 percent interest,” Horn said.

“The original Yankee Trace land acquisition and development cost was approximately $22 million. By January of 2014, our total outstanding debt for Yankee Trace will be approximately $3.8 million.”

Horn said the golf course operates in the black. “Golf and food service revenues cover all labor and supplies. Any surplus from operations and residential land sales is deposited in the debt-retirement fund to pay off the bonds.”

Estate tax revenues, which will no longer be available after 2013, were also used to help pay off the police station, which opened in 2001, and the Public Works Center, which opened in 2010.

City council will consider final approval of the budget at its Jan. 4 meeting. Formal presentation for the public will be on Jan. 28.

Centerville has had a 1.75 percent income tax rate for 32 years. Its property tax rate of $2.35 per $1,000 of valuation also is one of the lowest in Montgomery County. Horn said the city government has reduced full-time staff by more than 34 employees since 2000.