City council passed its 2015 budget Thursday night with a property tax hike.

Included in the $8.3 million budget is a 1.25 mills tax hike on the city’s debt service tax.

The tax was increased to 7.5 mills, up from 6.25 mills, to help pay for street paving projects next year.

“That’ll give us some money to work with for infrastructure work,” said Mayor Tom Donaldson.

The 1.25 mills debt service hike will cost the average homeowner about $25 per year and raise about $80,000 for the city, council said. The 6.25 mills tax raised about $411,000 for the city this year.

The debt service tax is part of the city’s real estate taxes. Total tax millage for the city will be 40 mills next year, up from 38.75 mills now.

Councilman Richard Schontz Jr. said the city hasn’t had a tax hike in five years.

The city was able to trim its budget by adding the West New Castle Street bridge and Sullivan Run projects to the bond issue.

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 is looking to add about $500,000 to the bond to pay for flood control projects, which will be completed next year.

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 the city starts paying down its debt.

The city approved the first reading of an ordinance authorizing the borrowing of up to $7 million through a bond, although it likely won’t approach that much.

Donaldson said bonds could be sold in February. He said the city is working on site engineering with J.S. Capitol, the developer of the hotel to be built beside the garage.

Donaldson said the city also must finalize an agreement for the hotel to use the parking garage.

Listed in the prospective revenues of the budget is about $150,000 from sales of the city’s parking meters.

Donaldson hopes to replace the parking meters with a kiosk system. The city likely would need to include the cost of the kiosks into the bond issue for the garage as well, Donaldson said.

Perhaps the biggest change to the budget again comes with salaries and employee benefits.

Council announced Tuesday that it had reached new three-year agreements with its firefighters and nonuniform workers. It announced finalized contracts last month with its police officers.

All three union members will receive 2.5 percent, 2.75 percent and 3 percent raises over the three-year deals, which will span January 2015 through December 2017.

The city’s 18 union firefighters earn about $36,700 to $59,000 next year.

The city’s 22 union police officers will earn about $36,800 to $67,500.

Neither the city fire nor police chiefs are members of the unions.

Police and firefighters are paid based on longevity rates.

Kline said perhaps the biggest change in the agreement with the firefighters is the elimination of the required 18-man roster.

The city had hoped to remove the requirement in its last agreement, but the state arbitrator did not rule on it in his report.

“That’s big for the city,” she said.

Kline said the city is not looking to reduce the number of firefighter yet, but said changes could come through attrition.

Should the department eventually reduce in size, it would still be required to keep four firefighters on duty at a time, Kline said.

Another change for firefighters is that they will pay more for health care by the end of the deal.

While police and nonuniform workers are paying 7 percent toward their premiums, firefighters have been paying 3 percent. Council said firefighters will be increased to 7 percent by the end of the deal.

The city’s nonuniform employees include about 15 office, streets and parks department employees.

Council members said they are happy to the contracts done before the end of the year.

The last round of contracts, which expired at the end of 2011, all went to arbitration. A decision of the ruling between the city and its fire department was reached in August, more than two years after the contract expired.

“All three unions were very agreeable to work with,” Schontz said. “And now all three unions are pretty equal in everything.”