Next week, the City will adopt its budget for 2005. After several years of sharp cutbacks, the new budget basically maintains current service levels. In order to avert service reductions, the City Manager initially proposed an 8% tax increase, which the Council, through its deliberations, was able to reduce to 4.5% (or a little less than 1% of the total property tax bill.) The new budget contains several notable and encouraging features: (1) expanded investment in capital needs (which have been badly short-changed in recent years) funded entirely through current dollars without the issuance of new debt; (2) full funding of the Citys certiorari obligations, again without the issuance of new debt; (3) partial replenishment of our depleted municipal savings account to help ensure fiscal stability in the future; and (4) the smallest decline in our assessment base in nearly a generation. Unfortunately, it was not possible to reduce the widely disliked refuse fee for this coming year, but it remains my strong expectation and intent that the refuse fee be phased out as soon as our fiscal health permits such an action. Overall, the new budget paints a picture of a city recovering its financial footing after a series of very difficult challenges, but we still face severe constraints and must do a better job of promoting economic growth, providing relief for taxpayers, and reserving resources for long-term investments in our quality of life.