Winchester taxpayers may see an increase on their insurance premiums later this year.

Tuesday evening, the Winchester Board of Commissioners discussed a proposal to increase the rate from 8 percent to 10 percent.

Winchester Mayor Ed Burtner said the tax is collected by the state on the city’s behalf.

A memo from Interim Finance Director Michelle Lucas to the commissioners said the higher rate would generate an estimated $500,000 in revenue for the city.

“With budget season upon us, we are seeing once again a sizeable increase in our expenses due mostly in part to the 12 percent yearly increase in our required pension contributions and employee wage compensation packages with the new addition of the Employee Education Incentive program,” Lucas wrote. “With these being ongoing yearly increases, we as a city must look for additional streams of revenue.

Lucas said the rate was last increased in 1987, when it went from 5 percent to the current 8 percent.

Burtner has expressed his concern many times for the city’s financial situation in light of the 12 percent annual increases to the city’s pension contributions.

The commissioners voted 4-0 for an ordinance to be prepared for a first reading at the commission’s March 3 meeting. Commissioner Kitty Strode was absent.

The commission also briefly discussed renewing the city’s natural gas franchise agreement. Winchester City Manager Matt Belcher proposed increasing the franchise fee form 1.75 percent to 3 percent. Belcher said the city’s franchise agreement for electricity is 3 percent as well.

The natural gas franchise would be for 10 years.

In other action, the commission:

— heard an update from Brian Ward of Palmer Engineering about obtaining rights-of-way and railroad crossings for the Seventh Street alternate truck route project.

— approved a street closure request for Main Street for a car show on May 9.

— approved a request to contribute to a new $13,000 chemical feeder system for the pool at College Park Gym.

— approved out-of-state travel requests for the Winchester Police Department and Winchester Fire-EMS

— declared a 2000 Ford F250 pickup truck as surplus property and transferred it to Winchester-Clark County Parks and Recreation.

— approved the lone bid of $25 for a bump mill seed cleaner to Richard W. Crouch.

— approved funding for one facade grant and two upper story residentai grants from the Downtown Development Investment Fund.

— reclassified James Parks from maintenance worker II to operator I.

— terminated the employment of patient transfer specialists Ronald Adams, Jocelyn Bartmess, William Biddle, Alexia Milligan, Tiason Lockridge, Michael Kelso and Rebecca Rehg.