The City of Havre de Grace's $16.03 million general fund budget for fiscal 2019, along with its $14.2 million water and sewer and $1.1 million marina enterprise fund budgets, were adopted by the City Council Monday evening.
The new budget calls for an increase in spending of about $1 million while not increasing the property or personal property tax rates.
The council voted in favor of Ordinance 1006, which covers all three funds, 5-0 during its regular meeting Monday; Councilwoman Casi Tomarchio was absent. The budget takes effect when the next fiscal year begins July 1.
"This year we'll be ending the fiscal year  in fiscal solvency in every fund, which is a big accomplishment," Councilman Jason Robertson said.
The mayor presents the annual budget to the council in the spring, and the council has the final vote after the budget is shaped over several months of work sessions and public hearings.
Mayor William T. Martin said the fiscal 2019 budget is “probably one of the best budgets I’ve seen since I’ve been here.” He was elected to the City Council in 2008, later served as council president and was elected to his first term as mayor in 2015.
The general fund budget for next year is about $1 million more than the $15.1 million budgeted this year, as more revenue comes in from an uptick in residential development in recent years, along with greater investment in residential and commercial properties.
The city will also not have to transfer money from its general fund to shore up its water and sewer fund next year. That fund, known as Fund 9, has struggled over the past decade with debt obligations and a local housing market battered by the Great Recession that meant few new water and sewer customers.
Water and sewer rates will each increase by about 6 percent. The city's $25 quarterly water and sewer debt service fee, which had been initiated shortly after Martin took office in the spring of 2015, will end at the conclusion of the current fiscal year.
“Fund 9 is healthy, and it’s standing on its own,” Finance Director George DeHority said Tuesday.
Property tax rates will remain the same, at 56.5 cents per $100 of valuation on real property and $1.705 per $100 on personal property.
“That’s also a big accomplishment as the budget expands, because that’s due to an expansion of the tax base,” Robertson said during Monday’s meeting.
There has been a nearly $150,000 increase in real property tax revenue, from $7.94 million this year to $8.09 million anticipated next year, according to the budget. About $60,000 of that new revenue would come from new residential construction, according to DeHority.
Robertson said more people are living in and visiting Havre de Grace, spending money with local businesses, so there are fewer vacant properties.
He praised city department heads and staff, as well as the volunteer members of city commissions, for their efforts, and he noted the “rare opportunity” of removing the debt service fee.
The additional 4.4 cents per $100 of valuation charged on real property within the Chesapeake Bay Critical Area Taxing District will remain the same, too, according to Ordinance 1002, which sets next year's tax rates and was adopted by the council May 21.
The additional tax affects 289 properties within 1,000 feet of the Chesapeake Bay shoreline; there are about 5,900 total property tax accounts in the city, according to DeHority.
The revenue, the use of which is governed by the state, funds local water quality improvement projects such as plantings or removing impervious surfaces such as paving, he said.
The general fund budget includes increased salaries for the mayor and six City Council members, which the voters approved 820-793 in the May 8 city election.
The mayor's annual salary increases from $7,800 to $18,200, and council member salaries go from $5,200 to $7,800 per year. Total spending for council salaries increases from $31,200 to $46,800, according to the budget ordinance.
City leaders have budgeted for multiple capital projects next year, with a $1.85 million capital spending package in the general fund. Line items include $75,000 for an electric trolley to take visitors through downtown, $100,000 for city parks upgrades, $256,000 for City Hall renovations and $759,300 for road projects — that is a major increase from the $200,000 budgeted for road repairs this year.
The city has budgeted $6.3 million — supported in part by a $2.4 million bond approved by the voters in 2016 as well as state and federal grants — for water and sewer capital projects in Fund 9 as the city works to upgrade its water treatment plant and repair and replace sewer and water lines that are 100 years old in some cases and filled with built-up mineral deposits that restrict water flow.
The mayor has been showing a section of rusted water pipe clogged with buildup at council meetings in recent months, and he brought it out again Monday as he thanked city staff and residents for their sacrifices and patience as city finances recovered over the past decade from the global recession of 2007 to 2009.
“Now, the city is back on the right footing,” Martin said. “We can get rid of the debt service fee; we can now start doing the things that a city’s supposed to be doing.”
Martin stressed those duties include fixing infrastructure. He said Havre de Grace will go through some major changes in the next 10 years, such as construction of a new Havre de Grace Middle/High School and the development of a new University of Maryland Upper Chesapeake Health medical center on property the health system owns near Bulle Rock.
“You’re going to start seeing equipment with a city seal a lot more around your city getting things done,” the mayor said. “I really believe in my heart that the best is yet to come.”