Havre de Grace Mayor Wayne Dougherty warned of "the most challenging budget of my administration" for fiscal year 2015 and said he expects to raise water and sewer rates by 20 percent, as suggested by a city commission.
With home building still stagnant and failing to generate revenue, the administration plans to trim its overall spending by $835,000, to a total of just above $15.4 million, Dougherty told the council in a report on the preliminary budget at Monday's council meeting.
No merit increases or cost-of-living adjustments are planned for city employees, and a hiring freeze is scheduled for 2015.
That fund is set to have a $115,000 surplus by the end of fiscal year 2015. The general fund, which is set to start the year with a $770,000 surplus, is also expected to finish with a $960,000 surplus.
Although the state's Department of Assessments and Taxation suggests lowering the real property tax rate from $0.56 to $0.5556, Dougherty is suggesting keeping it the same in light of the planned fee increases.
Dougherty said he proposes to keep the $500 personal property tax credit to again encourage economic growth.
The long-challenged water and sewer fund is expected to start the year with a $1.3 million shortfall. The city hopes to reduce the shortfall by $225,000, primarily with the 20 percent rate increase.
Joe Fiocchi, a resident, spoke out later in opposition to the proposed increase.
He questioned the mayor's notes on the apparent surpluses, such as the expectation that operating revenues will exceed spending by $1.13 million in the water and sewer fund.
"It is not the function of a city to make a profit," he said.
He said everyone crows about cutting the tax rate, but a tax hike would be preferable to a fee increase because water fees are not tax-deductible to homeowners.
The city should spend several meetings spelling out the rationale of "getting to this point" and "take politics out of the process completely," Fiocchi said.
Grant revenues in fiscal year 2015 are expected to increase by more than $1.5 million, with most of that going toward the $1.6 million the city wants to restore the Opera House.
Snow budget challenged
Like other Harford jurisdictions, Havre de Grace is over budget on snow removal, public works director Larry Parks said.
City employees worked about 2,900 hours on the snowstorms, including 900 hours of overtime, he said.
The city also used 630 tons of salt.
"We just had the last [snow] today; no more are allowed," Parks joked.
Photo project, pool defibrillators approved
Council members passed a resolution requiring automated external defibrillators at pools in the city, which council members said would save lives.
They also passed a bill to let the Historic Preservation Commission document streetscapes around the city.
Councilman Bill Martin said this may be an unprecedented project, as he has not found anything like it being done in Maryland.
Martin thanked city officials for "taking us forward into uncharted responsibility."
A third approved bill requires all city committees and boards to present annual reports to the council.
Jackie Hoover and Irmgarde Brown received awards on behalf of the city's Independence Day Committee and for the library branch taking part in the War of 1812 celebration last year.
Ellen Eltgroth was re-appointed to the Historic Preservation Commission.
The following special events were approved: Havre de Grace Farmers' Market every Saturday between May and October; War of 1812 weekend at the Lockhouse Museum on May 3; Red Coat Run 5K at the Lockhouse on May 3; Pirate Encampment at the Lockhouse on July 12 and 13; and Pirate Gala and Pirate 5K at the Lockhouse on July 12.