City Council heard from several department heads Tuesday evening about the 2013 proposed budget, including Economic Development, the Division of Fire and the Community Revitalization Department.

The city’s proposed 2013 budget isn’t as dramatic as the budget approved for 2012.

This time last year council was looking to cut $3.7 million from the 2012 budget, which resulted in laying off five firefighters, and eliminating several vacant police and firefighting positions.

This year, no employee cuts will be needed, and only a slight dip — about $615,000 — into the city’s general fund reserves is needed to balance the 2013 budget, according to City Manager Judy Gilleland.

She called the budget “relatively good” given the current economic times. The city is starting the second of a two-year budget plan. The city experienced a significant reduction in income tax this year, as well as property tax and state revenues.

“The good news is that plan worked and we’re operating within our guidelines and we are on target for 2013,” Gilleland said.

The city will also need to shuffle some funds in order to receive more than $1 million from the Ohio Attorney General’s Moving Ohio Forward Grant program that will be used to demolish 50 city homes.

Council OK’d $250,000 to be paid this year for the grant program designed to demolish abandoned and nuisance buildings. That money will be reimbursed by the state in 2013 and put toward the required match. The remainder of the money will come from the city’s nuisance abatement fund.

Community Revitalization Director Doug Adkins proposed that council move $820,000 from the general fund — money designated to purchase a fire truck and for additional street paving — to a special fund designated to be a match for the Moving Ohio Forward Grant program.

But Adkins said this does not mean the city will lose out on a new fire engine or additional street paving in 2013.

He recommends City Council convert $600,000 the city has from an old U.S. Housing and Urban Development program to community development block grant funds. That money will be added to the existing $800,000 CDBG budget for 2013, where a fire truck and the additional street paving will be funded.

“It is ethical, it is legal, it’s perfectly acceptable,” Adkins said. “HUD is happy with it, the Ohio Attorney General is happy with it; they both have things they want us to do, this satisfies everybody.”

Middletown is projected to start the year with a balance of $6.4 million in its reserves.

It’s projected the city will collect nearly $29.3 million in revenues next year, but spend about $69,000 more than what they take in. That will force the city to dip into the reserve balance by about $615,000

Most of the city’s money comes from income taxes. The city’s expects to end 2012 collecting $19.9 million in income tax revenues, but plans to see a $612,628 increase for 2013. Income tax collection was above projections for 2011 by more than $630,000, but they are below the 2012 projections by $350,000.