Coatesville council last night approved a 2010 preliminary budget that calls for $8.78 million in expenses, providing city taxpayers a .9 million tax cut but still leaving them with the biggest tax burden in the county.

Next year the city plans to collect $1.4 million in current real estate taxes and $2.4 million in earned income tax. Including all past taxes and tax fines and a special levy, the city hopes to collect $2.6 million in real estate taxes. All total, the budget projects tax revenues of $5.7 million. The remainder of the money comes from licenses, fines, interest and rent payment, and other intergovernmental sources.

Again, the police force takes the biggest bite of the budget with $3.9 million. It is projected that at end of this year the city will spend $4 million on its police. The police were forced by a lengthly fire investigation to drastically exceed overtime budgets. Recently, the city hired five new officers, brining the department up to the full compliment of 34 officers.

"The preliminary general fund budget being proposed for 2010 indicates real progress toward curtailing the burden of structured deficit," City Manager Harry Walker said.

The 2010 budget is the lowest in four years, according to figures released by the finance department. In 2006, the general fund was $8.9 million; 2007 it was $8.8; and in 2008 it was $10.2 million.

Walker said the decrease for the 2010 budget was accomplished by restructuring the administration where a higher "employee productivity gains" are obtained. Walker also eliminated the recreation department.

Previously, Waker had wanted to lay off 11 full-time and part-time employees, but failed to gain council support. Council Member Ed Simpson, one of those who voted against the layoffs, said he was upset that Walker wanted to ignore employee seniority.

Walker said the tax decrease is "a signal to the broader community that Coatesville has begun to address the imbalances between Coatesville and the surrounding communities." The Fairmount Capital Advisors, an independent firm that examined the city's finances, recommended a tax decrease. Fairmount also warned that city will have million dollar deficits if it either doesn't bring about revitalization or cut its spending.

The earned income remains the same $2.5 percent. Next year, according to Walker, the earned income projection of $2.45 million decreases by $50,000 from the 2009 budget but is $150,000 higher than the 2009 forecast. "This projection is based largely on the belief that the worst is over for Chester County in decreased employment," Walker said.

According to the proposed budget, the city administration is planning to spend $5.8 million on employee salaries and benefits.

Walker presented the budget last Thursday before a public work session of council. Council members Patsy Ray and Karen Jorgenson were the only ones that attended.

Last week council approved taking $1.5 million from the Trust Fund to cover budget shortfalls.