The Andalusia City Council approved a $15.8 million expense budget for fiscal year 2016.

Mayor Earl Johnson said operating expenses are roughly 3 percent higher than last year.

“This is primarily due to increases in salaries and wages, which automatically go up 3 percent per year for the first 16 years someone works for the city.”

The city’s cost for employee health insurance premiums also increased 8 percent, he said.

“The city pays 100 percent for single coverage, and employees pay for family coverage,” he said.

“This is a very lean budget when you compare it to previous years, but it’s right in line with what we have been doing for the past four years.”

The council also approved a $1.4 million capital budget, but has not yet determined how that money will be spent, City Clerk John Thompson said.

There are many needs for new equipment or other capital purchases, he said, adding that each department has been asked to submit a list, and the council will prioritize those needs.

In addition, there is a $486,635 contingency budget. State law requires municipalities to hold a percentage of revenue in reserve, or contingency. Generally, the money is spent later in the year.

Collectively, the three budgets total $17.7 million.

In other business, the council:

• Abated property on Prestwood Bridge Road, and at the intersection of Brewton Street and Williams Street.

• Agreed to retroactively pay professional fees of $10,000, and to award a $10,000 grant to AHS Band Boosters for the A-Town Festival held this past weekend. The action items were taken from the FYE 2015 budget.