Havre de Grace will borrow $2.1 million to finish renovating the Opera House, repair its water plant, raise water and sewer fees again, while holding the line on property taxes, Mayor Bill Martin said as he introduced his proposed budget for the next fiscal year.
"The 2017 budget is an austere budget," Martin said as he read the printed introduction at Monday night's City Council meeting. In the latest reassessment, he noted, the total of property values in the Havre de Grace city limits declined by $24 million.
"We're not going to raise taxes and we're going to keep services," the mayor said.
Martin's proposed $16.2 million budget, calls for an increase in spending of $376,600 over projections for the rest of this fiscal year that ends June 30.
"I have avoided increasing property taxes," the mayor said. "No one's tax bills will change."
There will be public budget work sessions at 6 p.m. Monday, April 11, for the enterprise funds, such as the water and sewer fund, and Monday, April 25, for the general operating fund.
While the mayor announced welcome news for property taxpayers, his budget proposal calls for a 10 percent increase in water and sewer user fees as the city struggles to make its water and sewer fund solvent.
"The Water and Sewer Fund 9 is expected to begin the year with a $2.1 million shortfall," the mayor said.
Martin's budget plan would reduce that deficit by $1.2 million during fiscal year 2017, with most of that coming from the rate increase that will generate about $617,800.
Long term, Martin said, the water and sewer fund should become strong enough to start lowering the fees.
"My sincere intention is to operate the plant at a much higher capacity," he said, "which will drive down the cost per gallon and put downward pressure on metered rates for 2018 and beyond."
The next year will be tough on city residents and businesses, the mayor said, as they will pay more for water and sewer. But after the coming fiscal year things should start getting better, i.e. cheaper, for water and sewer users.
"We are literally in a sweet spot," the mayor said about the city's location at the mouth of the Susquehanna River and the head of the Chesapeake Bay. "We should be paying the lowest water rates on earth, we really should."
To start moving the fees in that direction, the mayor says the city should start making money off its surplus water capacity.
"We are going to sell water," Martin said. "That is my goal."
Martin outlined four key elements of his spending plan:
- The capital budget is $2.93 million, an increase of $219,200 over the current year.
- Personnel costs will increase by $277,200. That doesn't include pay raises or increases in health care and retirement costs. Martin is proposing performance bonuses rather than merit of cost of living increases.
"I have budgeted over $280,000 in performance bonuses that I intend to award quarterly," he said.
- Debt service is budgeted to increase by $198,600 primarily to cover the additional borrowing for the Opera House project.
The biggest project in the proposed budget is borrowing $2.1 million to finish the Opera House.
"You can have the Opera House finished by Christmas," Martin said Monday night, "or you can wait four or five years."
He's opting for the former.
- The final element is maintaining the city's commitment to the Susquehanna Hose Co. and the Havre de Grace Ambulance Corps. The fire company, according to the plan, is expected to receive $500,700 this fiscal year and another $475,700 in the fiscal year beginning July 1. The ambulance corps is expected to receive $141,200 this fiscal year and $96,600 next fiscal year.
The mayor said his budget proposal reflects his administration's commitment to "continued and strategic investments in the City's parks and high visibility areas in an effort to promote Havre de Grace as the premier place to live, work and play in Harford County."
Martin offered the following summary of his budget plan:
"Consistent with my long-term strategy and as evidenced by my spending decisions in fiscal 2016, I intend to invest in Havre de Grace's infrastructure and expand its enterprise funds to solvency and beyond. I have avoided increasing property taxes, and limited borrowing to capital projects that will long outlive the debt service.
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"Further, while Water and Sewer Fund 9 service fees are proposed to increase substantially, my long-term plans are designed to make these increases both temporary and short-lived."