Bothell City Council is in the midst of reviewing a $205.7 million biennial budget for 2009-2010 that includes some $77 million in general-fund spending.

As with most government budgets, general-fund dollars are likely to get the most attention as they pay for the day-to-day operating expenses of the city, everything from police to parks and recreation.

Even in the midst of some confusing times economically, City Manager Bob Stowe told council Bothell’s financial condition is sound. He later said the budget contains room for additional city employees, various capital-improvement projects (some of them major undertakings) and a healthy surplus that could shield the city from any economic problems.

“It’s a positive budget for Bothell,” Stowe said.

Some highlights of the proposed budget, according to Stowe and Finance Director Teri Schackman include:

• Stowe is not recommending any tax increases, including advising council not to adopt the 1-percent property-tax levy state law allows Washington cities to take without going to the voters. The budget does contain increases in storm sewer rates.

Most significantly, like many other cities, including Kenmore, Bothell needs to meet certain federal surface water standards. In order to do so, Stowe has proposed a 42-percent hike in rates, which amounts to about a $32.50 increase in those annual rates for a single-family residence.

• If City Council adopts the spending plan as proposed, the city will add six new employees in various departments, including one new police-records specialist and a fire-department office specialist. Other new employees will head to the administration and the parks-and-recreation service among other departments.

• Capital-improvement projects include large-scale undertakings such as the realignment of the intersection of State Route 522 and Main Street, a major piece of the city’s ambitious downtown plan. A city planner recently said the realignment will create a new “T”-shaped intersection meant to allow development opportunities on three different streets.

According to Stowe, construction should begin in 2010 and carry over into the following year.

In terms of other capital improvements, Stowe talked about construction of a new public-works operations center that should come on line in the next two years.

Overall, Stowe said the city should be able to maintain, as mandated by city rules, a $7.3 million reserve representing 20 percent of the city’s operating expenses over the next two years. He also said revenues should outstrip spending by $700,000 over that same time period.

With the national economy in free-fall and other local governments, including King County, facing major budget cuts, how is it that Bothell is able to maintain a comparatively rosy economic outlook? According to Schackman, part of the answer lies in the fact Bothell does not depend as much on property taxes for revenue as does, for example, King County.

Both Schackman and Stowe said the city’s revenues are split almost evenly among property taxes, utility fees and local sales taxes, with a slight edge going to sales taxes, according to Schackman. Some dollars also come in from miscellaneous fees and fines.

Regarding the sales tax, Schackman said projections show minimal increases in collections of 4.1 percent and 6.1 percent over the next two years, respectively. Schackman added sales-tax collections are something city officials will need to keep an eye on given the current volatility of the overall economy.

In terms of keeping the city books balanced, Stowe also talked about cutting some $4.5 million in expenses. He also noted that roughly $5 million in what he called worthy departmental spending requests had to be left on the table.

If the city has a problem area in terms of service and funding, Stowe believes it falls under the category of parks and recreation. He added City Council has adopted a seven-year, $230 million recreation spending plan. Stowe further said if the current spending plan is followed, what he called a “significant” number of those dollars will be spent in the next two years.

Council timelines are not set in stone, but legislators should hold a couple of discussions and public hearings on the upcoming budget this month with final adoption arriving in early December. For an updated timetable, including opportunities for public comment, check the city Web site at www.ci.bothell.wa.us.