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City 2015 budget has tax hike, bond issue

The city’s proposed 2015 budget includes a contract with police officers and a potential tax hike, and it depends heavily on an expected bond issue for the Centre City project.

City council Thursday night approved an initial reading of its 2015 budget. It must approve a final reading next month.

The proposed $8.5 million budget is about $800,000 more than the current budget, with much of the additional expenses for employee salaries and benefits.

Mayor Tom Donaldson announced at the meeting that the city has an agreement with the Fraternal Order of Police union, which represents its 23 police officers.

The deal will span January 2015 through December 2017.

However, Donaldson did not disclose much detail on the new deal. The mayor said he was sending the final version of the contract to the union before releasing it to the public.

Donaldson said officers will receive a 2.5 percent increase in pay in the first year of the deal. He added that new employees will pay more for health insurance and would have less vacation time.

The police department’s expenses in the 2015 budget are up by about $100,000 from this year.

Council hopes to reach agreements with the unions representing firefighters and nonuniformed workers by the end of the year, when their contracts expire.

“That’s our goal,” said Councilwoman Kathy Kline.

The city used estimated 2.5 percent salary increases to estimate its proposed budget.

A proposed bond issue to pay for the proposed 225-lot parking garage is included in the budget, and is a key part in balancing the city’s increased expenses.

Council hopes to pay for the roughly $4.4 million parking garage through a PNC Bank bond issue. The city also would take over the parking authority’s current debt and add it into the bond, which would total about $5.8 million.

The city would be required to only make interest payments on the bond for at least the first year of the issue. The interest-only payments will allow the proposed parking garage to be built and begin generating revenue before it needs to be starting to be paid off.

The Centre City project also includes a Rite Aid Pharmacy set to open Dec. 4 on Main Street and a proposed Marriott Springhill Suites hotel.

The city also is looking to add the costs of two flood control projects to the bond to eliminate a proposed tax hike for next year.

The city includes a hike to its debt service tax in the 2015 budget. Council is proposing to raise the tax from 6.25 mills to 10 mills to pay for the West New Castle Street Bridge and Sullivan Run projects.

The hike will bring in about $240,000 in revenue and would cost the average homeowner about $50 more per year.

The increase would take the current debt service revenue of $411,000 up to about $650,000. The debt service tax is one part of the city’s real estate tax. Total tax millage for the city is to be 42.5 mills next year, up from 38.75 mills now.

But by adding the expense of the projects to the bond issue, the city could reduce the amount it would need to raise in taxes.

“We’re still exploring our options with it,” said Councilwoman Cheri Readie.

The city has until the end of the year to figure out if it can incorporate the projects into the bond issue.

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