The Andalusia City Council on Tuesday approved an $18.3 million budget for the 2018 fiscal year that increases operating expenses only 1 percent more than the current budget.

The operating expenses are three percent less than the city budgeted three years ago, Mayor Earl Johnson said.

Johnson said the city’s largest budget expense, salaries, is roughly the same as in the current budget, which included a 7 percent increase in employee salaries and benefits. At the same time, the council scrapped its pay and classification plan, which included automatic step raises for employees, regardless of work performance.

Johnson said Tuesday the city is currently working on a new employee performance policy.

The budget also pays $2.3 million in long-term debt.

“Not including the debt associated with the airport or the downtown projects, we have reduced long-term debt by $4.6 million since 2012,” he said.

The city also has established capital improvements account, which it has funded since 2014, depositing more than $2.5 million there.

Earlier this year, those changes netted the city an improvement in its Standard & Poor’s credit rating, now an A+.

In the past year, the city also rearranged the operations of several departments and amended the sanitation fee structure.

“This is a very sound budget, and it is extremely conservative,” Johnson said. “It is one we can meet, absent something unforeseen coming up.”

The mayor said the city is in the best financial condition it’s ever been in.

Budget totals, broken down by departments, follow:

• Administration – $ 2,734,556
• Planning and Development – $3,089,070
• Police – $2,412,874
• Fire – $1,236,749
• Public works – $2,133,318
• Education – $2,436,000
• Long-term debt – $2,304,000
• Contingency – $250,000
• Outside agencies – $256,812
• Other – $862,000
• Capital Improvement – $613,421