HUNTINGTON, Ind. (Indiana's NewsCenter) - A proposed $10 garbage collection fee has been turned down, but city leaders say they will be forced to make more cuts.

In a 4-3 vote, city council members turned down the proposal early Tuesday morning.

"I am disappointed, I'm in awe," responded Mayor Steve Updike shortly after the vote. "We will start reducing services.We will start reducing monies that we pay out. And we will try to get a leaner government for what the taxpayer wants, said Updike.

Council members also refuesed a measure that would ask state lawmakers to allow temporary property tax increases.

A public hearing Monday night drew a crowd of more than 300 inside the Heritage Hall at Hier's Park. Many were there to protest the proposed fee.

The fee, championed by Mayor Steve Updike, came in addition to layoff's of six firefighters and other city employees including the mayor's wife. The steps are designed to shore up the budget gap, which city leaders blame on a mis-communication between the clerk-treasurer's office and the county auditor.

A check for the first installment of paid property taxes was sent by the auditor to the city clerk-treasure in December 2008. That check was written for an amount just more than $3 million, almost $1 million less than city leaders were expecting.

In August of 2009, a second check sent to the city was short by almost $700,000.

Officials say the lower-than-expected checks are the result of successful appeals from commercial property owners, who claimed their properties were appraised as too high a value.

City officials claim they had no warning of the property tax refunds that shorted them of money, but county leaders insist they should have known.

Representatives from both sides tell Indiana's NewsCenter that the problem is being fixed.

In the meantime, with dwindling funds, city leaders are crunching numbers as they determine where cuts can be made, and when layoffs may begin again.

Stay tuned to Indiana's NewsCenter for further updates.

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