If there are any doubts about economic recovery in the greater Katy area, the city's elected officials put them to rest Monday night by passing a robust budget for 2012-13.

Fueled by new growth in the city, especially a new HEB grocery store and new anchor shops at Katy Mills Mall, the city council was able to cut property taxes for homeowners while giving city employees a 4 percent raise and making plans for a new city hall.

"The current economic conditions are improving and it appears this trend will continue for the 2012–13 budget," City Administrator Johnny Nelson and Finance Director Byron Hebert wrote in a memo to the council.

The council set the tax rate at 58.672 cents per $100 of property valuation, which is down from the current year's rate of 59.372 cents. That means taxes on a home valued at $150,000 would be about $880.

The city anticipates the rate will generate $5.8 million next year, up from the $5.6 million in property tax revenue the city generated this year. Nelson said the increased revenues are attributed to increased property valuation in the city.

City revenues are up 4.35 percent over the current year budget. Nelson said the increase in anticipated tax revenues, along with conservative budgeting in previous budgets, has positioned the city to prepare for steady growth.

"For the first time since the recession, the city is in a position to move additional revenues to departments to prepare for growth in the coming years due to the fact that the city prepared for a larger than expected recession which has not occurred," Nelson and Hebert wrote.

Nelson and Hebert estimated that the budget will collect $242,189 more property tax revenue than last year. Of that amount, $130,555 is from new property added to the tax roll this year.

The 2013 budget, which passed unanimously without any comment from the public, allows for the design of a new city hall, a raise for city employees, increased medical insurance and the addition of more personnel. The police department will hire an additional officer and will be able to replace five cars.