The Greeneville Board of Mayor and Aldermen passed on first reading Tuesday a 2012-13 budget that the board believes provides for the needs of town departments while holding the line on property taxes .

A second and final reading of the $21,447,354 spending package will be held at 9 a.m. Friday at a special called meeting of the board in the training room of the Greeneville Fire Department's Central Fire Hall.

The budget is for the fiscal year beginning July 1 and running through June 30, 2013.

Estimated revenues for the town from sources other than personal and real property taxes total $13,725,701. An estimated total of $7,721,653 will be raised by personal property and real property taxes for the 2012-13 fiscal year.

It is estimated that $421,932 in real property taxes, personal property taxes, and in-lieu-of-tax payments by public utilities will not be collected before July 1, 2013. The town's budget year ends June 30.

In order to balance the budget, a tax rate of $1.86 per $100 of assessed (not appraised) value on taxable real estate and personal property is necessary.

The budget for 2012-13 does not include a tax increase, town Administrator Todd Smith said.

"This budget reflects a town moving forward to provide high-quality public services at a very affordable tax rate," Smith said in a letter to the board.

Mayor W.T. Daniels thanked department heads and school officials for their work on the budget.

"We still haven't answered all the questions, but I think this is a good, solid budget," he said. "We didn't fund every request, [but] we hope we can be a better partner."

In remarks to those assembled in the G. Thomas Love Boardroom at the Greeneville Light & Power Building, taken from an executive summary provided to board members, Smith said that the town completed a "historic transition" in the 2011-12 fiscal year by adopting an Administrator-Council form of government.

Smith, hired recently as city administrator, "will oversee the day-to-day implementation of the approved budget," he said.

The overall fiscal impact of the new budget on town departments and citizens "is relatively minimal," Smith said.

In the general government category, accounts reflect "two positions carved out of the recorder's budget," reflecting a $140,000 increase in that area.

The category includes filling the vacant accountant position opened up when Carol Susong was named town recorder, Smith said.

The overall public safety budget increased by about $85,000 from the 2011-12 fiscal year, Smith said.

Much of the increase is due to increased fuel costs, he said.

"Furthermore, for the first time, expenditures from the local litigation will be budgeted as expenses. These expenses were previously not budgeted," Smith said.

Because of the addition, the police department budget increased by about $83,000, while the fire department's budget decreased by about $1,000, Smith said.

The building inspection budget decreased by about $21,000 due to the retirement of a department head, he added.

The public works budget will increase by about $62,000, Smith said.

"The brunt of this increase is due to moving employee salaries from the landfill to the Public Works Department," Smith said. "Further increases are due to increased fuel costs."

Money was saved by Public Works Director Brad Peters' decision to move to a four-day, 10-hour work schedule that consolidates truck routes in the town, Smith said.

The Welfare and Other accounts increased by about $12,000, "due in large part to the health department and animal control line items," Smith said.

The Parks and Recreation Department budget increases in 2012-13 by about $28,000.

"The increases are due to increased fuel costs, increased utility costs, and increased demand to repair non-recreational facilities within the city and school system," Smith said.

The budget also includes a previously-determined pay equalization plan for full-time employees, he said.

In the Schools, Capital and Other category, the accounts are decreased because of the decrease in city capital expenditures, Smith said.

Schools received $234,000 of additional funding for capital projects. The funds will be used for two new school buses and $82,000 for an additional mathematics teacher and programming, Smith said.

Smith cautioned the board that town debt service will increase by over $700,000 beginning in fiscal year 2016.

"In think that we're seeing some things that took place a couple years ago when we refinanced our debt [and] went from variable to fixed rate," Daniels said. "We have to have a debt management policy."

Other appropriations in the budget increase by about $169,000.

The largest portion of the increase comes from an 8 percent increase in health insurance, which translates into an additional $120,000 in insurance costs, Smith said.

Overall, expenditures are expected to increase by about $845,000 over the 2011-12 budget, Smith said.

The projected 2012-13 revenues of $21.4 million "will be the largest collection in Greeneville's history," Smith said.

The budget projects a surplus of $11,797 in 2012-13.

Smith recommended starting a "capital project sinking fund" to anticipate future capital needs.

Smith struck an optimistic tone in summarizing the budget.

"With new retail opportunities scheduled for fiscal year 2013, increased bundling permits on file and growth in the housing market, these projections are achievable," he said.

"The next challenge for Greeneville is preparing for the growing capital and infrastructure needs the city faces. Older equipment and buildings drive the need for long-range capital planning," Smith said.

He recommended the board "undertake a concentrated effort to set a vision for identifying and funding future capital needs for the city of Greeneville."

The budget includes the first across-the-board pay increase for town employees in five years. The pay raise is 2 percent.

"It's just something we wanted to do for our employees," said Alderman Darrell Bryan, chairman of the board's Budget & Finance Committee.

Throughout the process, department heads worked with the board's Budget & Finance Committee to keep projected 2012-13 expenditures within reasonable limits.

"All the departments came in under budget last year, so the departments did an outstanding job watching [their] budgets and being cautious," committee Chairman Darrell Bryan said.

"It's workable. It's been a good process, and we're satisfied," said Craig Fillers, Greeneville Police Department assistant chief.

"We're like everybody. You always want more, but we're satisfied with what we got, and we'll work within it."

Mark Foulks, Greeneville Fire Department chief, also said his department will be able to work within budget parameters.

"We're happy with the process and we're happy overall with the way things have gone," he said.

Budget expenditures are broken down as follows: the Town School Board, $5,676,395; Department of Public Safety, $5,249,561; Other Appropriations, $3,601,200; Department of Public Works, $2,560,660; Health, Welfare, Culture & Recreation, $1,690,544; Debt Service, $1,397,211; General Government, $722,770; Reserves-Future Capital Outlays; and Public Enterprise, $30,380.

In other business, the board passed resolutions appropriating $60,000 for the Greene County Partnership, $8,000 for Keep Greene Beautiful and $7,500 for the Dickson-Williams Historical Association, Inc.