Butler City Council on Thursday adopted an $11.1-million budget and a .75-mill real estate tax increase for 2021.

Council members unanimously voted in favor of the 2021 budget, tax and salary ordinances.

The tax increase will increase the city's millage from 43.25 mills to 44 mills.

City officials said property values lowered through reassessments will result in a slight reduction in tax revenue next year and the tax collection rate was lowered from 95% to 94% to more accurately reflect collections.

In other financial matters, council approved a resolution authorizing a $1 million tax revenue anticipation loan.

Council agreed to transfer the $400,000 capital projects fund from First Commonwealth Bank to a new account at Butler Armco Employees Credit Union because the bank will begin charging fees Feb. 1. The money in the capital projects fund is earmarked for the Sullivan Run flood control project.

Councilman Mike Walter said other accounts might also be transferred for the same reason.

Council voted 4-1 to accept a proposal from NexTier Bank to borrow $1.3 million for a bond issue to finance the purchase of a new ladder truck for the fire department. The 10-year loan comes with a 2.85% interest rate.

Councilman Jeff Smith voted against the motion, saying the city received a proposal with lower costs.

Solicitor Tom Breth said council isn't obligated to accept the lowest cost proposal because banking services are professional services.

At a meeting earlier this month, Jeff Smith said Huntington Bank's proposal had a lower interest rate of 2.14% that would save the city $76,433 over the term of the loan. On Thursday, Councilman Bob Dandoy said NexTier's proposal allows the city not to draw money from the loan until the first interest payment is due.

In other business, council approved a contract with the police department that raises wages by 17% over the course of the five-year agreement, and agreed to hire an officer. The contract provides a 4% pay increase in 2021, 2% in January and July 2022, 1.5% in January and July of 2023, 1.5% in January and July of 2024 and 1.5% in January and July of 2025.

Vincent Beaver was hired as a patrol officer to fill a vacancy.

Council approved the consolidation of five lots owned by Lutheran Senior Life into one lot in the Island neighborhood.

Parking manager Jim Chiprean said Mayor Ben Smith is allowing free parking at metered spaces on Main Street through Dec. 31.