The city of Durham is looking at a projected shortfall of $4.7 million as it gets ready to craft a budget for the next fiscal year.

The projection is based on expected costs, so depending on what projects are green-lighted before the city officially adopts a budget in June, that figure could change. At a preliminary budget meeting Friday, budget and management services director Bertha Johnson said it would take a property tax increase of 2.47 cents per $100 of property value to fully close that gap, provided no other sources of additional revenue are found.

The city’s current property tax rate, which residents pay in addition to county property tax, is 56.07 cents per $100 of property (about $1,120 a year for a property valued at $200,000). The increase would bring the rate up to 58.54 cents (about $1,170 a year for that same property, or a $50 annual increase). That’s still below the 2015–16 rate of 59.12 cents but higher than what residents paid from 2008–14.

Johnson told a room of city staff and officials that the “biggest contributor” to the deficit is personnel costs, including pay and benefits. Expenses in that column are expected to grow as the city implements a newly approved pay plan for police officers and firefighters and hires thirty firefighters to staff a new fire station. Revenues, on the other hand, are not projected to see a major increase without a rate change.

Property taxes make up 48.84 percent of the city’s revenue for fiscal year 2016–17. When the city needs to increase revenue, “that’s the first place we look, because that’s the only number that we really control,” Johnson said.

“We cannot balance the [general fund] budget for FY17–18 (or future years) at current property tax rate,” a budget outlook presentation reads.

Major expenses expected to be included in the budget include $4 million for street improvements and $1.63 million to purchase new police cars so that officers who live in the city can take their vehicles home. (The plan is intended to boost police visibility, encourage more officers to live in city limits, and keep police cars from being used twenty-four hours a day.)

Additionally, the anticipated budget includes $1.5 million in engineering services for broadband fiber Internet installation, but deputy city manager Bo Ferguson says that number represents a “worst-case scenario.” According to Ferguson, the city contracts permitting and inspections of Google, AT&T, and Frontier fiber installations because of a recent change in state law prohibiting the city from passing on the cost of doing that in-house to utility companies. Now, the city needs to either find the money to keep contracting those services (the more expensive option) or resume handling permits and inspections itself (the slower option).