Initial budget includes tax, water rate increases

Havelock residents could pay an extra nickel in property tax next year, but city leaders say the increase won't be enough to pay for long-term growth.

Commissioners on Monday received a $14.8 million proposed budget for 2008-09 during the first of several budget workshops. A 5-cent tax hike and 4.4 percent water and sewer rate increase are included in the proposal, which the city board could adjust before adopting the new budget in June.

"This is a lean budget," said City Manager Jim Freeman. "This is a budget that's going to get us by this year, but we have deferred a lot."

The property tax rate of 49 cents per $100 in property valuation would jump to 54 cents under the proposed budget. A resident who owns a $100,000 home would pay an extra $50 a year in property taxes.

A household using 5,000 gallons of water per month would see an increase of about $2.80 on the water bill with the proposed 4.4 percent water and sewer rate hike.

Commissioner Bob Priesing said the board should consider a higher water rate increase. He cited a speaker at the commissioners' annual retreat who said Havelock's utilities have a higher value than their present cost.

"I think what we're proposing here sounds irresponsible," he said. "We're not preparing for the future, we're just scraping by for today."

Growth needs include a $28 million sewer plant expansion and other infrastructure, including a U.S. 70 overpass at Cherry Point's Slocum gate.

City staff appropriated $110,000 from Havelock's general fund reserves to balance the budget. Freeman said the city may have to reduce its services if commissioners scale back the proposed tax and water rate increases.

"If you do go down further than that, we are prepared to come back and talk to you about cutting services or reducing the scope of services," Freeman said. "We just are not seeing the tax base growth."

Commissioners have planned budget workshops for 6 p.m. today and Monday at City Hall. They are open to the public.

The board has planned a public hearing on the budget for 7 p.m. June 9.