RATHDRUM - Rathdrum's proposed city budget for fiscal 2014 includes a 2 percent cost of living increase for employees, a 1 percent property tax hike and raises for the city council and mayor.

The public hearing on the plan will be Aug. 20 at 6 p.m. at City Hall. The council will vote on the proposal after the hearing.

"We've tried to live within our means," said Brett Boyer, city administrator. "Each year we try to tackle a few projects, improve parks and roads and keep the water and sewer steady."

The total budget is proposed to decrease from $4.9 million this year to $4.4 million.

The across-the-board cost of living increase for employees equates to $30,000. No merit salary hikes are proposed.

The 1 percent property tax hike would mean a $9-per-year increase for the owner of a $150,000 home. The increase would raise $19,911 for the city budget.

Over the past five years, Rathdrum has increased taxes by an average of just over 1 percent per year. Cities are allowed to increase them up to 3 percent per year under state law.

"Costs have continued to go up, but we've also tried to be sensitive to the tough times," Boyer said of the increases. "Also, if you don't take care of things, you fall behind."

Boyer said the council does not plan to take any of the city's foregone tax balance to help the budget. The account will have more than $200,000 after the current budget year.

Boyer said it has been nine years since city council members and the mayor have received pay increases.

The mayor currently receives $850 per month and city council members $400. The proposal is to raise the mayor's pay $300 a month and the city council $200 per month. All are part-time positions with no benefits involved.

Boyer said the pay proposal will put Rathdrum competitive with other similar-sized cities in the area, yet still lower than larger cities.

Boyer said the reasons for the overall budget decrease include an expiring agreement with Avista associated with the plant at Boekel and Meyer that brought in $160,000 per year over the past several years, a $117,000 grant for Majestic Park that increased the current budget and the city not filling one of two building inspector positions.

"At some point, we'll probably have to fill that," Boyer said.

Proposed expenditures in the budget include: two patrol cars ($42,000 for both), a front-end loader for snow removal and street maintenance ($30,000 payment), street repair and pathway construction ($280,000), a lawn mower for the cemetery ($8,000) and parks amenities and improvements ($22,500).

"We've been able to keep up with road maintenance," Boyer said. "Our streets look pretty good."

The budget proposal comes after a series of workshops held by the city council.