The Common Council will vote next week whether to adopt a proposed 2012 budget that offers a tax rate reduction, but an increase in the amount of taxes the city collects.

As of Wednesday, projections are for a $23.3 million general fund, covering all city spending except water, sewer and refuse collection costs; and a tax rate of $15 per $1,000 of assessed property value to raise the money.

The projected rate is 2.6 percent lower than the 2011 rate — but the year-over-year increase in the tax levy, meaning the amount of cash to be raised from property tax, is 11 percent, so the Council will also have to vote next week on a proposed local law authorizing the city to override the state’s so-called tax cap.

State law enacted this past spring put a soft limit on year-over-year tax levy increases of cities, towns, school districts and other taxing jurisdictions. In order to adopt a budget that drives a levy increase of more than 2 percent, municipal boards have to agree, by majority vote after a public hearing, to break the cap.

City Budget Director Dick Mullaney summarized some of the particulars in a budget hearing Wednesday night. The audience consisted mostly of city department heads and employees, candidates for city offices and a handful of residents who weren’t required to be there.

Of the nearly finished product, Mullaney said, it’s vastly better than the preliminary budget the Council was faced with a month ago. That early version drove a nearly 18 percent tax rate increase.

In the past 30 days, city administrators identified line-item cuts and additional revenue to cut back the projected tax levy by $1 million, although Mullaney conceded some of it is “one shot” revenue.

“They have taken back the pop bottles, and broken open the piggy bank ... to keep the (tax rate) down,” he said.

The general fund will pick up $100,000 additional revenue — and 2012 tax levy will be that much lighter — after the city Board of Estimates & Apportionments on Wednesday backed a proposal to collect more ambulance fees. According to Mayor Michael Tucker, the Council will be asked to approve rate increases later this year to raise the revenue. The city’s rates for ambulance services are significantly lower than Twin City and Rural Metro rates, according to figures obtained by the fire department.

Mullaney did not go over the particulars of the $3.9 million water fund budget, the $4.2 million sewer fund budget or the $1.2 million refuse fund budget. None of these have an impact on the tax rate, as they’re all funded from user fees. The Council is not, at this point, eyeing increases in the water and/or sewer rates, he said.

Of the 2012 refuse budget, which reflects a full year of private/non-city refuse collection, Mullaney simply noted it comes in lower than the 2011 refuse budget, which projected $1.3 million in expenses for public collection and disposal.

A few residents offered the Council their cost-cutting suggestions for the future. Tony Sammarco of Lincolnshire Drive urged serious exploration of shared services and centralized services to reduce duplication; the city must look again at using Niagara County central dispatch, in order to free up police officers for police work, he said.

George Waskosky of Berkley Drive, a candidate for 4th Ward alderman, complemented the refuse privatization effort and urged more of that type of action to lighten the property tax load. He took note of employees’ fringe benefit costs consuming a lesser percentage of 2012 spending and encouraged more of that too.

Most of the reduction in fringe benefit spending results from Tucker striking a deal with four city labor unions to postpone the city’s refilling of union members’ health reimbursement accounts next year. Employees tap their HRAs to pay for medical expenses not covered by their insurance. The city replenishes the accounts once a year, in November. All but the AFSCME local agreed to let the city put off $400,000 of replenishment until January 2013. Tucker called that a “concession” on the unions’ part.

George Kugler of Gaffney Road disagreed with that word — “the unions didn’t really give up anything,” he said — and urged administration to go after permanent employee benefit cuts, as well as shorter-term contracts with the unions. The current contracts, all five-year agreements, leave the city unable to cut costs in hard times, Kugler said.

All five agreements expire in December 2012. Administration-labor negotiation of new pacts should start fairly early next year, Mullaney said.