CHRISTIANSBURG -- Mike Barber, an experienced town councilman who was elected to his third term in Tuesday's election, had a council "first" on Wednesday.

"This has never happened that I know of," Barber said at the close of a 2½-hour budget work session, a step in the annual budgeting process that is new to Christiansburg.

While the town charter says "the town council shall have the power to prepare, or cause to be prepared, annually a budget showing the estimated receipts and proposed expenditures for town purposes," the council in past years has relied on town administrators to prepare the budget.

While town administrators provided all the elbow grease in preparing the 2008-09 proposed budget, council members decided this year they wanted more discussion on revenues and expenses, primarily because they have tried to avoid increasing real estate taxes for residents who will already see a substantial rise in the county tax.

"We're adding a step this year with a special session," Mayor Richard Ballengee told a few people who attended Wednesday's public meeting. "It is a work session. It is not a public hearing."

At a finance committee meeting April 29, Town Manger Lance Terpenny presented a preliminary budget of $41 million, up from last year's $39 million. The proposal, one Terpenny called "a bare-bones budget," showed a $2.6 million shortfall in revenue to fund basics.

At Wednesday's work session, however, Terpenny and his staff had worked out a plan that added $500,000 for street paving and $1.2 million for a wastewater plant upgrade and also restored contributions for some nonprofit groups to the proposal. Because Terpenny included a nearly $5 million carry-over of unspent money from the past two year's budgets, the shortfall and additions were covered.

"The budget was balanced when we came in the room today," he told council members.

Terpenny also came up with ideas to keep the general fund from supplementing the town's enterprise fund for water and sewer, something it has done for years. Terpenny proposed increases to water, sewer and garbage fees to balance the operating expenses for the services. His proposal also recommended increases in the meals and cigarette taxes.

The council members batted around several ideas for generating revenue, including raising the town's Business, Professional and Occupational License taxes, which are based on gross sales receipts from area businesses. For retail sales, Christiansburg currently charges a rate of 10 cents per $100 on gross receipts, whereas neighboring Blacksburg charges double that, the state's cap of 20 cents per $100.

"I have never liked the BPOL tax," Ballengee said, "particularly for the smaller businesses. If we raise the BPOL tax, we're putting the burden on the merchants."

But some council members pointed out that since the tax is based on gross receipts, big merchants such as Wal-Mart would pay more based on their bigger receipts.

Councilman Brad Stipes suggested raising the BPOL tax by 5 cents per $100 to bring in an additional $495,000 from retail sales, an area that defines the town's identity. This year, the town expects to collect $890,000 from the tax on retail sales.

Councilman Dan Canada agreed, saying the town's increased need for police presence, infrastructure and road repair is primarily due the result of increased commercial trade.

"I would be for leaving the food tax at 6 percent, increasing the lodging tax and increasing the business licensing tax," Canada said. "I think our citizens would pay additional real estate tax at some point in the future if they felt the commercial sector was paying their fair share.

"Until they're put in place, I'm going to squall like a mashed cat," he added.

The council also spent time discussing a plan to make garbage collection service mandatory in the town. Currently, 2,300 residential customers do not take the service.

"If it were required, it would minimize illegal dumping," Barber noted. "This may alleviate some of that problem."

But concerns over whether the mandatory collection would extend to commercial businesses, which often use private hauling companies, prompted the council to instruct town attorney Susan Waddell to find out whether the town could legally impose the mandatory garbage collection fees on businesses.

The council was in agreement that sewer and water fees should be increased to cover the deficit caused by supplementing the services from the town's general fund. Terpenny said the proposed budget recommends a monthly increase of $7.70 for an average usage of 6,000 gallons.

Finally, Canada -- who will be stepping down from the council in September -- challenged the town to look at both sides of the budget.

He said the town always has to look at ways to raise money, but it needs to look at ways to save money, too. He suggested that town departments appoint employees to serve on a committee to discuss cost-cutting ideas.

"Most of the time, good ideas come from the fringes, from the ranks," he said.