The Bainbridge City Council approved a 3 percent raise for all its employees at their Tuesday night meeting, after City Manager Chris Hobby described the city’s finances as improving from what had been experienced during the past two years.

The council approved the raises by a 5-1 vote, with City Councilwoman Roslyn Palmer casting the lone no vote. Palmer also voted no when the raises—which will take effect in March, halfway through the city’s fiscal year—were first proposed in September.

At the time, the mid-year raises were approved on the condition that city officials look again at revenue and expenditures to see if the raises made good financial sense.

According to Hobby, the city’s revenues for the first half of the current fiscal year exceeded its spending by $226,431.79. At the same point in 2010, revenues were $160,274.19 less than spending. Hobby attributed the difference to reduced spending and several revenue sources—including sales tax, hotel/motel tax and alcoholic beverage tax—producing more money than they had since 2008. Sales tax revenues are up $64,483 over the previous year, the city manager said.

Palmer said she was glad the city’s revenues appear to be on the mend but said she would rather save the incoming money instead of spending it.

Mayor Edward Reynolds said he believed city employees had done “an excellent job” in keeping expenses low to help the city’s financial condition.

“I agree that the employees are very deserving [of the raises],” Palmer said. “But I don’t think this is the year to do it.”

Hobby said the council’s decision to increase the city’s millage rate by half a mill will return about $152,000 to the city’s reserve fund this year, providing some savings in the event economic recovery is slow. The City Council saved about $87,000 by waiting until March to give its employees their first raises in three years, according to Hobby.

“I understand some people’s argument that the millage rate increase is over and above [what we are spending on raises],” Hobby said after Tuesday’s meeting. “I think the council’s decision reflects their belief that our employees have gone a while without raises and have worked hard to save the city money during that time.”

Palmer also objected to the city government making any significant expense on its Fourth of July celebration beyond what was necessary to put on a good fireworks show. The council had initially budgeted $43,000 for the Fourth entertainment; however, Hobby pledged to keep the actual production expense around $10,000.