RATHDRUM - The Rathdrum City Council on Tuesday night approved a fiscal 2013 General Fund budget of $4.57 million that includes a 1.9 percent property tax hike and raises for employees.

Employees will receive a 3.6 percent pay increase and department heads an additional 2.5 percent based on a market adjustment to be more competitive with area similar-sized cities. No city pay raises were given last year.

Mayor Vic Holmes vetoed the appropriations ordinance based on concerns about the market adjustment, but the veto was overturned by a 3-1 City Council vote.

City Councilman Fred Meckel also opposed the budget proposal.

The budget was approved as presented by staff.

City officials say the tax hike stays in line with modest increases in recent years.

The City Council went with a 1 percent hike last year preceded in previous years by 1 percent, 1.9 percent, 1.92 percent and no increase for an average of 1.16 percent for the past five years. Cities are allowed to bump taxes 3 percent each year under law.

For the owner of a $150,000 home, the new tax increase will be $9.75 per year.

The budget includes improvements to the new Majestic Park and $80,000 dedicated toward road and pathway projects to connect the city in key areas.

Other budgeted items include a new front-end loader for $150,000 for public works, a new police car for $22,000 to continue the replacement rotation of patrol cars, and a used truck for $14,000 to replace an older one in the animal control program.

In the water department, Rathdrum will start the planning and design of a new water pump and storage unit on the southwest side of town. Several sewer valves along the line to Post Falls are also slated to be replaced.

No new full-time positions are planned.