CORINTH — Residents can expect cuts to the library budget and transportation services for people with disabilities as city leaders debate the proposed 2010-11 budget.

After learning property values declined 1.81 percent since last year, city staff outlined several options during a second workshop session on the budget Thursday night.

The proposed budget was released Friday.

Early projections showed the city’s property values could decline as much as 3 percent. The staff sought direction on the last portion of the gap, about $67,000, should the council keep the current tax rate. If the council adopts the effective tax rate, some of the $730,276 in cuts could be restored, Finance Director LeeAnn Bunselmeyer told them.

The effective tax rate raises the same amount of money — about $6.1 million — on the same property as last year.

Corinth’s current tax rate is 57.698 cents per $100 valuation. The effective rate is 59.293 cents per $100 valuation.

The City Council could not agree on many of the options, for both revenue and expenditures, presented during the workshop. They agreed to advertise that they intended to adopt the effective tax rate in order to comply with notification laws, while agreeing the matter was not settled.

However, they did direct the staff to cut the library allocation by 6 percent and to cap the transportation budget at $31,500.

Several council members said they could no longer support the city’s bus contract, given that it helps so few people. Three or four people ride the bus regularly, Bunselmeyer told the council, with 12 people in all using the service in June.

SPAN, or Special Programs for Aging Needs, transports Corinth clients who are unable to drive because of illness or a disability. Some ride SPAN to regular medical appointments, such as chemotherapy and dialysis, while others use the service to get to work.

The city staff also cautioned the council that keeping the current tax rate, instead of adopting the effective tax rate, could create a downward spiral.

Interim City Manager Jim Berzina told the council that each year they accept the shrinking revenues with the current rate means there is less value base the following year. In a few years, the city could face the prospect of a rollback election.

Part of the problem is that before the economic downturn, the city adopted an aggressive capital improvement plan and issued bonds that must be repaid, Berzina said.

“The thought was ‘if you build it, they will come,’” he said. “Well, they didn’t come.”

At the time, the City Council anticipated increasing the debt portion of the tax rate by 5 cents per $100 valuation to fund the bonds. The water, road and sewer projects have been scaled back considerably, and the city has realized some savings, Berzina said.

But the city will need about 3.5 cents from the tax rate to pay back those bonds in the coming years, Berzina said.

Because more devaluation appears likely in the next five years, council member John Booher said city officials need to look ahead. If the council appropriated at least a half-cent to the debt next year, he urged, it would save money in the long run and avoid the potential of a rollback election in a few years.

But council member Bruce Hanson disagreed that the gap between the effective rate and the rollback rate, about 3 cents, would be enough to make that a real threat. He pushed to keep the tax rate at the current level.

The average home in Corinth is valued at $180,471, down from $182,258 last year, Bunselmeyer said. The owner of a house at the average value would pay $1,041 in city taxes, about $10 less than last year, if the city keeps the current rate.

Mayor Paul Ruggiere said he’s been getting e-mails with complaints about cuts Corinth has had to make in city services. He said he wonders if residents would prefer the minimal savings over the reduction of services.

“I’m not happy if $10 less means a brown park,” Ruggiere said.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.