Butler is proposing to take on the city parking authority’s existing debt in a plan to pay for a new 225-space parking garage downtown.

City council this past Tuesday discussed a plan that would have the city take on and refinance about $1.2 million of the authority’s existing debt, combining it with the estimated $4.3 million price of a new garage.

The city plans to build the garage as part of the Centre City project, which includes a proposed Marriott Springhill Suites hotel and a Rite Aid Pharmacy that is already under construction.

The garage would add about $133,000 per year increase to the $212,000 debt service the parking authority has been paying. Now the city would have all that debt.

While about $100,000 of the $133,000 would be made up through a parking commitment from the hotel, the city would have to raise about $33,000 through citywide monthly parking rate increases to cover the remainder of the debt.

Mayor Tom Donaldson said he is adamantly against raising the city’s debt service tax to pay for the parking garage.

“I won’t raise the debt tax,” Donaldson said. “I’d rather the people using it pay for it.”

Donaldson said he is confident the garage will pay for itself, particularly with an increased crackdown by the city to stop commuters from parking for free in residential neighborhoods.

While the garage would be a larger debt to take on, it would not be the only debt the city is paying off each year.

The city uses its 6.25 mills debt service tax to pay off different debts used to complete its budget. The debt service tax rate was set at 4 mills in 2005 and increased to 5 mills in 2007. It jumped to 9 mills in 2010, but was lowered to its current rate in 2012, according to city records.

The total tax rate in the city is 38.75 mills.

Its largest debt is on a 2005 bond to pay for the Public Safety Building on West New Castle Street, according to city clerk Mindy Gall. The bond is a refinancing of the 1996 general obligation bond on the building, which includes the city police and fire stations.

The city pays about $230,000 per year on the bond and has about $2.1 million remaining in payments. The bond is scheduled to be paid off in 2023.

The city also uses a small borrowing loan, which typically runs between $30,000 and $40,000 each year, to pay for miscellaneous budget items, ranging from new police cars, to engineering of street lights, to street paving.

Likewise, an infrastructure bank loan, typically ranging from $150,000 to $250,000, is used annually for street paving and capital projects.

The total debt service for this year is about $440,000. The total budget is $7.67 million.

The city budgeted $411,000 in debt service tax revenue for this year. Gall said the city had collected about $400,000 of the tax through the end of September.

Gall said the city is always on time on its debt payments and has not been late on a payment since she became city clerk in 2009.

While the city is not late on its payments, Gall said tax collections typically don’t cover all of the city’s debt expenses each year.

She said the difference in the two numbers is taken out of the city’s general fund, which is about $1.8 million.

Last year the city was short about $102,000 in revenue, while the two years before that were slightly above the red in revenue intake.

Another annual debt the city takes on is the interest on the $600,000 tax revenue anticipation note the city takes out each year.

That loan is used to keep the city afloat before real estate taxes begin coming in April, Gall said. The city uses its debt service tax to pay the about $4,500 interest on the loan.

One final debt the city is paying that falls outside its debt service tax is on a fire truck bought in 2010.

The $478,000 truck is paid for each year through a $48,000 grant from the city redevelopment authority, which receives the money through a state Community Development Block Grant.

While the authority has problems paying its debts, it has contributed the money to the city each of the past five years, including a $112,000 payment in 2011.

That bill is scheduled to be paid off in 2019.

The city has a meeting Wednesday night to discuss next year’s budget.