The Troy City Council approved its next year’s budget just in the nick of time.

One day before the next fiscal year begins, the council met to pass an approximately $42.5 million budget that actually exceeds last year’s numbers.

Despite drops in sales taxes, property taxes and other sources of city revenues, the city approved a budget that grew by about $50,000.

Even with growth, though, the city will begin the year conservatively.

“It’s a good budget based on what we know today,” said Troy Mayor Jimmy Lunsford. “That’s why I’m going to review it after three months.”

The budget passed Wednesday will allow city employees up to a 2.5 percent step raise, which is given by department heads based on evaluation.

But, the city will wait until January to decide whether it will be able to award an additional cost of living raise to workers.

“I want to get to a point we know we’re on sound footing,” Lunsford said.

The city’s budget is divided into an approximately $16 million general fund and $25.7 million utility fund. Based on projections, the city should have about $852,000 in reserves that could be used for either fund.

“We should have $852,000 for capital needs and any cost of living adjustments,” Lunsford said. “I feel pretty confident that amount of money is available.”

But, since revenues have declined in the last year, Lunsford said he wants to be certain that will be the case before allowing for additional spending.

“We didn’t have that normal growth we have had,” Lunsford said. “Our goal is to have well-compensated employees with good benefits with the fewest number of people it takes to do the job.”

Also in January, Lunsford said he wants the council to consider the request for funding made by the Troy-Pike Animal Shelter Coalition.

The group approached the city council prior to budgeting, asking for a $75,000 annual commitment from the city. Lunsford said more thought has to go into make that agreement, so the issue will be part of discussion in early 2010.

Lunsford said the budget is balanced, and doesn’t include any major changes in city operations. In addition to step raises, the budget also includes Christmas bonuses for employees.