Hermiston City Council approved a balanced, $59.3-million municipal budget Monday, an 8.9 percent increase for fiscal 2012-2013 that includes cost-of-living pay increases for many city employees.

All non-union city employees are set to receive a 2.5 percent pay raise, the same increase negotiated for the police department for July 2011 to June 2014.

“We could have not done the same thing for the non-union people,” said City Manager Ed Brookshier. “We have never done that.”

The police department is also adding two officers; one was sworn in during the meeting. Randy Studebaker, 33, was previously employed as a sergeant with the Gilliam County Sheriff’s Office, said Police Chief Jason Edmiston. The department received 32 applications for the position.

“We have made another conditional offer of employment to another candidate who will start in about a month,” Edmiston said.

The two new officers add $109,000 to the department’s budget, Brookshier said.

The city is also using more than $600,000 in reserve funds to balance this year’s energy services budget and absorb an 8.5 percent wholesale power rate increase by the Bonneville Power Administration. The city council agreed in November 2011 that the city would carry the load rather than pass the increase to Hermiston Energy Services customers.

A $6.4 million fund, a grant from the state lottery, is also part of the coming fiscal year budget to cover expenses for the Eastern Oregon Trade and Event Center. From that fund the city has budgeted $1.46 million for design and facility planning services.

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Contact Anna Willard at awillard@eastoregonian.com or 541-564-4536.

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