WELLSVILLE — The formation of a new fire district was the primary reason the City of Wellsville was able to propose a nearly 4-mill reduction in its 2014 mill levy, Ryan Young, city councilman, said.

“With the new fire district, the City of Wellsville will not be funding the fire department directly through the city,” Young said. “The fire district is its own taxing entity.”

The new fire district, which includes Franklin Township, helped city officials lower the projected mill levy from 47.41 mills in 2013 to 43.783 mills in 2014, during a budget workshop Monday at Wellsville City Hall.

“(The spike in the 2013 mill levy occurred) because we are having some retirements,” Young said. “We hadn’t put any money away preparing for those retirements.”

Those city worker retirements brought the need for an increase from 42.535 mills in 2012 to 47.41 mills in 2013. After debating and allocating funds, the city council lowered the mill levy rate for the proposed 2014 budget.

City officials allocated funds into several accounts at the workshop. The largest amount allocated was $13,000 into the city streets fund, increasing the total to $130,000.

“There are two major street projects we need to do,” Young said. “Both cost over $100,000.”

The two streets to undergo construction are Seventh Street and Pendleton Avenue. Both roads run east and west in Wellsville, Young said.

The transfer to the capital improvement account was doubled during the fund-allocation session. The council added $10,835 to the account, making the total $21,670. Also, $2,500 was added to the transfer emergency preparedness account, lifting it to $10,000. The remaining funds to be allocated were put into the health and life insurance account, making the total $47,000.

“[That is] how we wanted to allocate funds so we didn’t have a mill rate increase,” Young said. “We actually dropped around $5,800 in revenue. Basically those were numbers the council determined that we did not want to spend over.”

A possible 5 percent pay raise for all city employees also was discussed at the workshop.

“[The council] put it in [the budget proposal], but they haven’t approved anything,” Donna Layton, Wellsville city clerk, said. “We haven’t gotten a pay raise in a really long time. They won’t really make a decision until December for the 2014 year.”

While the pay raise is still in question, the city’s water and sewer utility showed a $200,000 spike from 2012 to 2013. The account increased from $747,790 in 2012 to an estimated $956,650 in 2013 and is budgeted at $1,042,100 for 2014. The increase is to fund a water-line project for seven city streets, Layton said.

Originally, Layton said,  three full-time public employees were working on the project, and part-time workers were being used to fill in. The city stopped using the part-time workers and hired another full-time employee to make a four-man team on the project, Layton said.

Part of the project is complete, and the city now is trying to factor in a new phase, Layton said.

The 2014 proposed budget was not approved for publication by the city council at Monday’s meeting. City council members plan to look over the budget and discuss changes further at their meeting Wednesday at Wellsville City Hall, 411 Main St.