RATHDRUM - The Rathdrum City Council on Tuesday night unanimously passed a fiscal 2014 budget that includes a 1 percent property tax hike and a 2 percent cost of living increase for employees.

"We've tried to be conservative with our budget," said Brett Boyer, city administrator. "Our average property tax increase in the past six years has averaged 1.29 percent per year."

Cities are allowed to increase taxes up to 3 percent under state law.

The upcoming budget will decrease to $4.4 million from $4.9 million this year.

"We'll still be able to move forward with improving our roads and parks," Boyer said.

The property tax hike will mean a $9-per-year increase for the owner of a $150,000 home. The increase will generate $19,911 for the budget.

City officials say the reasons for the tax increase are to keep pace with the cost of doing business and maintain services.

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

For the first time in nine years, the mayor and city council members will receive raises.

The mayor currently receives $850 per month and city council members $400. The budget raises 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 increases will put Rathdrum competitive with other similar-sized cities in the area, yet still lower than larger cities.

The budget also includes: 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).

No one commented during the public hearing on the budget.