The Ames City Council voted Tuesday to decrease the proposed property tax increase from 49 cents to the promised 26 cents.

City Manager Steve Schainker recommended three changes to his proposed budget. He said the amendments will cushion the blow Ames residents will receive when property taxes increase from $9.36 per $1,000 to $9.62 per $1,000, a figure that exists before the state rollback relief.

Schainker also recommended the payment term for the Ames Quarry bond be increased from 12 to 20 years, which would decrease annual debt payments by $100,000.

The additional years will significantly increase the interest the city will have to pay, however. Schainker said the city could pay in the neighborhood of $800,000, depending on the interest rate. He said he thinks the long-term value of the quarry negates the interest increase.

“We will pay more in interest, but why not wait?” Schainker said. “We can justify it with the long life of the project.”

Schainker’s amendments also included reducing the city’s contingency fund, which exists as a sort of “petty cash” fund to pay for any unforeseen expenses, from $100,000 to $50,000.

Schainker’s last recommendation was transferring $230,000 from the Local Option Sales Tax Fund to the General Fund for property tax relief. This balance exists because of extra funds from last year’s local option sales tax revenue.

Sheila Lundt, assistant to the city manager, warned the city could eventually lose its contingency monies if the economic atmosphere does not improve.

Lundt said the city can use the funds when it needs to, but they won’t be available in crisis situations if the city continues to use them.

“By doing that you’re lessening your ability to react to emergency situations,” Lundt said. “When you have a storm, these are the funds that pay to clean up trees, pay workers, rent equipment. Right now we have a balance of over $800,000 but if we have to keep dipping we won’t be able to react.”

Lundt said the city has no other options if contingency funds are not available.

“Right now [the council is] not taking out anything of the budget,” she said. “They’re just moving projects around. In the future, they would have to look at the budget and decide if they need to cut some things.”

City Councilman Russ Cross, at-large, said he was pleased with amendments to the budget.

“I believe we’ve made use of our funds in an appropriate way,” he said. “We’ve been very generous in allocating funds to pay for long-term community assets.”

City Councilman Herman Quirmbach, 4th Ward, said he hoped dipping into the contingency funds will not become a trend.

“My general impression is that there are signs that we are beginning to turn the corner on the recession,” he said. “This is a budget that reflects fiscal conservatism. We have delayed some city projects and prudently used some funds from our reserves.”

Quirmbach, associate professor of economics, said the economic atmosphere allows for the use of these funds.

“The new budget is appropriate because when the economy is as good as it has been we put away money in reserve,” he said. “We haven’t spent all of [the reserve]. I think we’ve held the line pretty well by keeping the bonds issue increase where it was predicted to be.”