The Tucson City human resources director is proposing a 55-cent-an-hour across-the-board pay raise for city employees as part of next year's $1.269 billion budget.

Human Resources Director Lani Simmons said the increases are important because many city employees are stuck at the low end of their pay scale since the city stopped giving merit and step increases over the past several years.

The cost of raises would depend on when they take effect. A July 1 date - the start of the new fiscal year - means a $5.1 million cost, while a Jan. 1 implementation would cost $2.3 million. Miranda's recommended budget, delivered to the City Council on Tuesday, includes about $4.2 million in available funds that could go toward raises.

Council members' reactions were mixed.

Regina Romero and Richard Fimbres felt it was a fair and equitable way to reward and retain employees who have endured furloughs, increased workloads and stagnating pay for years as the city groped through its economic doldrums.

"We need to continue sending the message how much we value them," Fimbres said. "And we need ... to maintain the best and the brightest in our government."

But Councilmen Steve Kozachik and Paul Cunningham said placing further long-term strains on the already structurally flawed budget could have unintended consequences.

"What good does it do to give somebody a raise, then lay them off the the next year?" Cunningham said, noting the state Legislature isn't finished passing bills that could end up costing the city millions more in revenue this year.

Kozachik said the money should be placed in reserve to offset future increased obligations for pensions and streetcar operations. Or raises should go only to the lowest-paid 20 percent of workers, he said.

"Our six-figure employees don't need a pay increase," Kozachik said.

The council also discussed options to close a $12 million gap in Tucson Water's budget, including the possibility of rate hikes that would boost the average water bill anywhere from $2.91 to $3.68 a month. Water is an enterprise fund, and must bring in enough revenue each year to recover its own operating costs.

No action was taken on any of the budget recommendations. The council will discuss the recommendation and make modifications before adopting a budget in about two months.

Other highlights from Miranda's plan include:

• The $1.269 billion recommendation is about $45 million less than the current year's adopted budget.

• Property taxes would go up about 13 percent, meaning the owner of a home with a $100,000 full cash value would pay $143.04 - a $16.65 increase from this year.

• The recommendation includes $1.043 billion for operating expenses, with the remainder for construction projects. Sixty-five percent of the general fund budget goes for employee expenses, such as wages, pensions and medical costs.

• No cuts to outside agency funding were recommended.

Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com