Though Frederick’s Board of Aldermen is expected to pass a tax rate tonight, ongoing discussions on the best way to spend part of a $4 million fund balance could cause a delay in passing the proposed $80.4 million budget.

The board met Wednesday in a last-minute discussion to try to address some lingering issues. While there was consensus to make some changes — funding a full-time code enforcement officer, instead of the part-time position, among others — the biggest obstacle was the fund balance.

Some of the aldermen believe the balance, which is set at $4 million to stave off potential budget shortfalls in fiscal years 2014 and 2015, could be better set at $3 million, with $1 million going toward other projects. Budget director Katie Barkdoll said the fund balance is money that could be used to cover any issues that arise, and that taking money from the balance could pose risks.

“That certainly is the downside risk to allocating anything,” she said. “If we want to allocate more to roads or anything, we won’t have it.”

Each member of the board offered suggestions, from lowering the tax rate by an additional cent or cent and a half to putting the money toward paying for retiree benefits, but there was no broad agreement for any of the ideas.

Alderman Karen Young (D), who suggested using the fund balance to pay for part of the Carroll Creek Linear Park or the retiree benefits, said she didn’t think it was smart policy to hold that large of a sum for two years.

“I still have a lot of uneasiness if we're being unresponsible as cash managers because in 2015 we might have a cash problem,” Young said. “It’s going to sit there idle not making much interest. ... I don’t think that’s prudent cash management.”

Alderman Michael O’Connor (D) said he planned to make a motion to lower the tax rate by a cent and a half tonight per $100 assessed value, due to the lack of support for other suggestions..

The proposed fiscal 2013 general fund budget is up from $74 million in fiscal 2012, which ends June 30. Replacing equipment, making new hires and a citywide 3 percent salary increase are some of the reasons for the increase. Personnel costs are up about $670,000 from fiscal 2012.

A switch to a different tax plan, which lowers the county tax rate and allows the city to increase its own taxes to make up the difference, means residents will see a 4 cent reduction in taxes this year. The cut translates to $82 annually for a $200,000 home.

The budget also includes a 10 percent increase in water and sewer rates, aimed at funding rising maintenance costs and updates to the wastewater treatment plant to meet state and federal mandates for cleaning the Chesapeake Bay. According to the city’s utility website, a family of four pays on average about $275 every 90 days for water. The new rate would push this to $302.50.

The Board of Aldermen will discuss the tax rate and budget at 7 p.m. tonight at city hall, 101 N. Court St.