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M' . 128 City Manager advised that the Budget Committee had attempted to prepare a budget generally in keeping with direction deduced from Council ' s remarks over the past fiscal year , and that this was an austere budget , with minimal capital improvement program . Despite increases in cost of doing business , they had been able to hold the budget at the current tax rate ( $1 . 9674 per $ 100 A . V . ) . A scheduled reduction of personnel is involved , most of which has and will be occurring by attrition . : ( Councilman Petersen entered the meeting at 7 : 40 P . M . ) In discussion , Councilman Weymouth noted in prior years the intent to allocate Sales Tax revenues 30% to General Fund and 70% to Capital Improvements , and over the past few fiscal years , the trend toward increasing the ratio for General Fund to the detriment of Capital Improvements , which will be running out of funds , and felt it was unrealistic to balance tax rate in this way . Councilman Henderson indicated her concern was not for additional Capital Improvement funds , but for reduction of property tax rate . Councilman Rhodes felt that of the three administrative positions currently vacant , at least one could be eliminated . Councilman Petersen felt if the budget could be reduced from standpoint of wages or personnel , he would support restoring those funds to Capital Improvements . He did not feel the City Manager could operate without an Assistant City Manager , and indicated that he was aware from his contacts in the construction industry that the Public Works Depart - ment was suffering over the past few months due to lack of a Director . Those two positions he felt were genuine necessities . Mayor Bury advised that the procedure would be as in the past few years for Council to go through the Budget line by line . City Manager suggested that Staff briefly review Revenues to give Council an indication of how these were arrived at , and this was presented by the City Controller . He expressed optimism in some areas of the economic picture , but noted interest rates on investments have dropped , and there was less money available for investment . City Treasurer- Collector noted that interest rate in the past year at times reached 74%, with the latest for 6 month investment of $100 , 000 being 4- 3/4% . She indicated , however , that last year ' s rates were far above normal , and felt that reduced income in this respect is balanced by return of revenues from other sources , such as increased building , and other ways . There was considerable further discussion relative to revenues , and in discussion of Friendly Acres Water service area, City Manager advised the Staff was well along in preliminary studies for formation of a General Improvement District under enabling Ordinance No . 1128 . Preliminary engineering survey and cost survey have been done , and there have been discussions with Orick ' s office relative to bond