URBANA – Urbana homeowners, get ready for higher property tax bills next summer.

The city's tentative property tax levy for taxes payable next summer is up 12 percent compared with the current levy.

But Urbana Mayor Laurel Prussing said the increase "is what the city needs."

"This is how we balance our budget," she said.

The Urbana City Council, meeting as the committee of the whole, will discuss the 2006 property tax levy at its meeting at 7 p.m. Monday at the Urbana City Building, 400 S. Vine St.

The proposed levy on property taxes payable next summer is $6.89 million, up 12 percent from the current $6.15 million levy.

City Comptroller Ron Eldridge, in a memo to the city council, wrote that the Cunningham Township assessor's office is projecting that the assessed valuation of the city will increase by 9.87 percent next year, including a 5.5 percent assessment increase on existing homes and 4.4 percent attributable to new construction.

Because both the cities of Urbana and Champaign have a policy of maintaining the city property tax rate at $1.31 per $100 of assessed valuation, Eldridge wrote that the city would need to pass a levy increase of at least 9.8 percent. To make sure the rate stays level, Eldridge said he is recommending a maximum levy increase of 12 percent, or $6.89 million.

The actual amount the city receives would be based on the final assessment increase determination next spring by the assessor's office and would be capped at 12 percent or by whatever the $1.31 rate would collect, whichever is lower.

Because the levy increase is greater than 5 percent, the city will, under state law, have to hold a truth-in-taxation hearing where residents can comment on the increase. That public hearing is scheduled for 7 p.m. Oct. 9 at the Urbana City Building.

The city must pass its tax levy and file it with the Champaign County clerk's office by Dec. 5.

Prussing said she isn't going to argue that holding the property tax rate steady means the city isn't raising taxes. The proposal does represent a tax increase, she said.

The cost of city government goes up every year, with wage, fuel price and other cost increases, she said.

"Otherwise, we'd have to reduce services, and I think the people want the services," Prussing said.

Also Monday, the council is scheduled to discuss a proposed amendment to the nuisance ordinance that would prohibit indoor furniture, like upholstered couches and chairs, from being used outdoors on open porches, yards or other exterior areas.

The council also will hear a status report on the city's Philo Road action plan, including a detailed report on economic activity in the Philo Road corridor over the past year.