Cambridge City Manager Robert W. Healy, the longest-serving city manager in Cambridge’s history, presented his final budget before the City Council on Monday night.

Healy’s budget, which will go into effect for the 2013 fiscal year, includes a raise in government salaries after pay stayed flat in 2012, as well as an increase covering health insurance costs and claims. It will raise taxes by 2.87 percent, a figure Healy praised. “The tax rate is only going up 2.87 percent. That’s the lede; that’s what we should be going out with,” he said.

The city manager also praised the number of new businesses that had arrived in Cambridge over the past year, noting that they provided employment and enlarged the city’s tax base. “When you look across the city skyline, you see cranes. Cranes are good,” he said.

While the majority of the Council seemed pleased with Healy’s final budget, some Cambridge residents at the meeting took issue with the use of over $9 million of unencumbered funds—which are generally set aside for non-recurring expenditures in times of emergency or unforeseen circumstances—for the purpose of reducing tax rates.

One resident, Gerald Bergen, suggested that the Council divert some of the funds away from wealthier recipients of the tax breaks, like MIT and large commercial property owners. Instead, he said, the money should be spent on initiatives directed toward middle-income households and small business owners, like sustainability grants.

“The city bird of Cambridge, I guess, is now the crane,” Bergen said, referring to Healy’s frequent mention of new real estate construction in the city. “Maybe we can put that on some of our stationery.”

Councillor Minka Y. vanBeuzekom disagreed with Bergen, saying that instead the city should put an additional $6.5 million of unencumbered funds toward not only keeping the tax rate low but avoiding any increase at all above 2012 tax levels.

“This is the money we can use, now at $117 million, to do things that are extraordinary,” she said of the unencumbered funds. “What will we do with this money that’s extraordinary?”

Vice Mayor E. Denise Simmons argued that Healy’s budget already struck an ideal balance, alleviating the tax burden for residents without depleting unencumbered funds meant for more dire circumstances. “It still moves us forward but keeps us fiscally constrained in a way that says, ‘We don’t overspend.’”

She praised Healy, who will retire in June after a career of more than thirty years leading the city,  for his final budget. “He holds on to a penny so tight he makes Lincoln cry,” she joked.

The budget passed unanimously, 8-0; Councillor Leland Chung was absent traveling through Europe on an Eisenhower Fellowship.

Also in attendance at Monday’s meeting were employees of the Eastern Bus Company, who asked the Council to pass an order supporting their demand that two bus drivers whom they said had been fired for their involvement in organizing their union be rehired. The Council passed the order unanimously, and also noted that Service Employees International Union Local 615, whose members appeared before the Council last week, had successfully negotiated a tentative contract.

In addition to the budget, Councillor Timothy J. Toomey, Jr., added in a late policy order urging the Council to devote more money and attention to the city’s rat problem. Toomey said he had heard numerous reports from his constituents in the past week of rambunctious rodents.

“People are deathly afraid. They’re not even using their backyards,” Toomey said. “They’re coming out in the daytime. When rats are coming out in the daytime and looking at you, you know there’s a serious public health problem.”

The order passed unanimously.

—Staff writer Amanda E. McGowan can be reached at amanda.mcgowan@college.harvard.edu.