Mayor Lewis Billings, in his budget presentation Tuesday, said the city's $147 million 2008-09 budget contains some sacrifices in order to maintain city services in a timely manner in a time of declining revenue and rising costs.

"While some would want it to be better, we should realize how good it is in this time of difficulty," Billings said. Later that day, the Municipal Council voted to put the budget on its May 20 agenda for discussion.

The budget represents a 4 percent increase over last year's budget, but it also reflects a changing economy. City revenues are declining - sales tax revenue is projected to be $17.2 million, compared with $17.8 million in the 2007-08 budget - and costs are increasing for fuel and health insurance.

Billings said it is important to focus on maintaining the city's infrastructure, since delaying necessary projects would be costly. The budget includes $23.5 million for capital improvements, such as a new park in the Lakeview section of the city.

But there will be some sacrifice on the part of city employees.

First, they will be expected to pay a third of their health insurance premium. Billings said that move was necessitated by the rapid increase in the cost of health insurance, $9 million compared with $3 million in 2000.

"It is a privilege to be an employee of Provo City, but there is a cost that comes with it," Billings said.

The city is also cutting back by eliminating the annual cost-of-living adjustment, but Billings said the city will still fund salary adjustments required under the annual market survey.

Council Vice Chairman George Stewart said the call for sacrifice is appropriate as the economy shows signs of softening. He said it is better to go into the year with a tight budget than to have to go back and make cuts in a more liberal budget if things turn worse than expected.

Attempts to contact Skip Tandy, president of the Provo City Employees Association, were not successful.

dmeyers@sltrib.com