Property tax revenues are also projected to increase by $596,000, from $12.4 million to around $13 million.
The budget must be presented to the state auditor's office no later than March 28, Estep said.
Molgaard hopes to have budget hearings to address council members' questions by the first meeting in March, he said.
Council also approved a contract with TRC Engineers Inc. for designs of a two-lane bike path next to Kanawha Boulevard. The contract will not exceed $280,000.
The Charleston-based firm was one of four interviewed for the project. The company was selected because of its vision, Molgaard said during a previous interview.
TRC was the only firm to propose a bike path with a green buffer between it and the boulevard, Molgaard said.
The path would extend from Magic Island to Patrick Street.
The plan is to make all four lanes of Kanawha Boulevard narrower and eliminate the grass median to make room for the bike path.
Council also approved the Sanitary Board's request to issue bonds not to exceed $11.6 million for sewer line upgrades in South Ruffner Road/Lick Branch area.
The cost was included in the last sewage rate increase, said Larry Roller, Sanitary Board director. The funds to pay the debt service on the bonds will come from revenue generated by sewage bills, he said.
He hopes to have the bonds issued by the end of March and the project under way by April 1. A public hearing will be held at the March 4 city council meeting.