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City spending will increase by $69,000 in 2002, up 4.9 percent, but city taxes will drop $42,000, down 8.9 percent.

This seeming disparity - comparable to the adage of having your cake and eating it, too - is possible because of the reform by the state tax reform. While most municipalities lost state aid due to the elimination of Homestead Agriculture Credit Aid (HACA), the city of Paynesville will see a $93,000 increase in state aid in 2002.

In 2001, the city received $345,221 in Local Government Aid and $138,370 in HACA, totalling nearly $484,000. In 2002, the city will receive $577,000, an increase of $93,000.

Also, the city expects to earn $18,000 more in fines, licenses, and fees in 2002 than it did in 2001. The result is the local tax levy will drop from $473,000 in 2001 to $431,000 in 2002, a $42,000 drop.

"It's nice to be able to pass on a tax savings to residents," said Mayor Jeff Thompson.

Once again, the city transferred $27,500 from the liquor store account to pay for city services and help lower the tax burden.

The city also was able to pay off some bonds early, lowering their bond payments by $40,000 a year.

One of the most popular spending increases in 2002 will be the $8,000 in the beach fund to cover hiring lifeguards at the city beach at Veteran's Memorial Park next summer. In 2001, for the first time in 50 years, the beach was without lifeguards.

Another funding increase for recreation is $18,000 in the park fund for the Koronis Trail.

The city has also added $33,000 to the budget to help finance sewer and water improvements on Lake Avenue next summer, $34,000 to help cover increases in medical insurance costs for employees, and $30,000 for a new copier at city hall.

The city also will update its comprehensive plan this year. The last one was completed in 1977. Thompson said $9,000 was budgeted to do a new comprehensive plan.

The total budget for 2002 is $1,399,513, up from $1,330,400 in 2001. The city council will hold a public hearing tonight at 6 p.m. in the council chamber to explain the budget and tax levy.