Shelbyville City Council reviewed preliminary budget figures Thursday night as presented by City Manager Ed Craig, with council member Al Stephenson saying he would like to see more put into street repair than is shown by the working document.

The new fiscal year will begin July 1.

The working budget, which is really just a basis for study and discussion, already includes $413,670 more in expenses than revenue, but that's offset by $604,720 in reduction of long-term debt -- debt on the rec center is rolling off, as are some leases on fire equipment.

The city no longer leases fire equipment, and has a funded depreciation account which can be used to replace old equipment when it has reached the end of its projected life.

Craig said the $413,670 deficit, for a working budget, isn't a bad starting point.

"We've started a lot higher than that before," he said.

Much of the deficit can be attributed to $183,000 in retirement benefits and $171,000 in increased fuel costs projected for the new fiscal year. City treasurer Gary Cantrell projected that gas prices could reach $5 per gallon by next summer.

The working budget does not include any pay raises; a sheet distributed Thursday night shows how much it would cost to give 1, 2, 3 or 4 percent increases to city employees, and also requests specific salary adjustments for five employees and a "night shift differential" which would pay police officers more for working the night shift.

The draft budget includes a total of $243,200 for street projects, of which $180,000 is state funds and $63,200 is local funds.

The public works department has rated each street on a scale of 1 to 5, said Craig. A street rated "1" has 20 years of life remaining, a "2" has 15 years, a "3" 10 years, a "4" five years and a "5" is in need of immediate repaving. Craig said the projected level of spending would allow the city to fix all of the "4" and "5" rated streets over the next 3 1/2 years.

Stephenson, however, said he would like to see more money put into street repair right away. Council member Kay Rose said that if the city tries to repair too many streets all at once, the construction work could cause traffic problems.

Craig said that in order for more to be put into street repair, council members would need to find the additional money.

"I can find it," said Stephenson. "I can make you some cuts."

In one case, the city is waiting to re-pave a section of Deery Street until after Shelbyville Power, Water and Sewerage System does some planned work in the area, since that will require tearing up the street anyway.

Craig also presented $199,150 in proposed capital improvements, including a $175,000 expansion to the city police headquarters. The 28-foot by 40-foot expansion, which would be located at the southwest corner of the existing building, would be used to store property and evidence, house computer servers and for a gun-cleaning room.

Craig said it would be best to use the $300,000 in revenue from sale of the old Senior Citizens Center towards capital expenses rather than operating expenses.

The budget presumes that the city will, as discussed by the county, be allowed to take over the old Harris Middle School gym, and the city projects it will need to spend $23,000 on roof repair and set aside $20,000 towards eventual replacement of the gym floor.

Council member Randy Vernon asked if the county had a responsibility to keep up the building under an old agreement with the city governing school properties within Shelbyville.