Harmony Borough Council discussed raising taxes to generate revenue to match a state grant for renovating the town square and help fund the construction of a new fire station.

At their meeting Tuesday, council members discussed raising real estate taxes 3 mills and allocating 1.5 mills of the increase to matching the state grant and allocating the other 1.5 mills to the Harmony Fire District, which is planning to build a new fire station.

Imposing a flat tax so all residents pay the same amount was also mentioned.

Council President Greg Such said the fire district requested a 1.5 mill increase to the 1.5 mills already dedicated to the department to pay for building a new station.

He noted that the increase would result in residents with higher property values paying a higher amount than residents with lower property values.

Questions remained about how the borough will fund some $167,000 to match the state grant. Harmony was awarded the grant as part of a joint grant awarded to both Harmony and Zelienople through the Redevelopment Assistance Capital Program.

RACP grants must be matched dollar for dollar, meaning Harmony would be expected to put up $167,600 toward the project if it uses the entire grant — bringing the total to $335,200.

Councilman David Szakelyhidi recommended a 1.5-mill increase to help the borough match the grant.

Councilman Don Sims suggested placing a 3-mill tax increase proposals on a referendum in the general election in November to let borough voters decide whether to raise taxes.

Solicitor Matt Racunas said he wasn't certain if nonbinding questions such as raising taxes qualify for referendums.

Sims said he would ask the county elections bureau about the referendum.

He also said council could impose a flat tax that would be the same amount for all residents.

The borough's current tax rate is 12.585 mills.

The borough has to find a way to raise enough revenue to pay the contractors who will work on the square, Such said. The grant would then reimburse the borough.

He said it has been 11 or 12 years since the last property tax increase.

In other business, council awarded a $13,513 contract to Voelker Paving to resurface Spring Street from Mercer to German streets. Voelker submitted the lowest of five bids for the project. The highest bid was $25,025.

Councilman Joe Dippold was appointed to the Harmony Borough Water Authority board to replace longtime member John Rice, who resigned.