OIL CITY, Pa. (EYT) — At Oil City Council’s meeting on Thursday night, a tentative proposal for the 2015 Oil City budget was declined.

A $16,980,808.00 budget proposed by city manager Eric Strahl was rejected by Mayor Barb Crudo and council members Ron Gustafson, John Bartlett, Michael Poff, and Isaiah Dunham.

Council member Isaiah Dunham told exploreVenango.com, “The proposed 2015 budget was an increase of 16.44%. We can’t continue to raise taxes in the city. We have a declining economy and a declining tax base. By raising taxes, we are going to lose more residents and drive business away.”

Dunham continued, “We need to start looking at city operations and cutting costs in departments instead of punishing the property owner.”

The following items were in rejected proposal:

REAL ESTATE TAX

A real estate tax hike of 1.96 mills was proposed.

The current levy is 11.92 mills, so the city’s millage rate would increase to 13.88 mills. (The increase would result in a tax of $13.88 on each $1,000 of assessed valuation of taxable property.)

The breakdown of the disbursement of the tax follows:

– 8.14 mills for general fund purposes
– 2.76 mills for the operation of city parks, playgrounds, and recreational areas
– 2.06 mills for the Oil City Library
– .92 mills for interest and principal on debt.

HEALTH INSURANCE COSTS

A 47% increase was presented with the renewal of UPMC’s coverage, the city’s current provider for its employees.

An option would be to switch to another carrier, Aetna. The annual savings would be about $608,344.00; however, Oil City’s three collective bargaining units must agree to changing insurance carriers.

Note: Although Strahl prepared two proposals, one proposal contained no property tax increase but would result in the elimination of some services and city positions.

In order to meet the required three public votes on the budget, council will be meeting on December 4, 12, and 18.

TENTATIVE APPROVAL ON OTHER TAXES

– Act 511 Taxes

Oil City Council gave tentative approval to the Act 511 taxes, also known as “the nuisance taxes,” and business fees.

The Act 511 taxes are as follows:

– $10.00 per capita
– 1% earned income
– 1% realty transfer
– $52.00 local emergency services tax.

– Residence Tax and Business License Fees

An approval was given on a $5.00 residence tax and business license fees ranging from $25.00 to $100.00 (depending on gross receipts).

– Water and Sewage Rates

Water and sewage rates for city customers will remain unchanged from the current prices.