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The Town Council is expected to approve a budget tomorrow that will increase water rates but maintain the current 58-cent property tax rate.

The approval is expected after a public hearing at 7 p.m. at the Town Hall, 1034 S. Carroll St.

The proposed 1992 budget of $577,793.49 would be a 7 percent increase over the $539,685 budget for the fiscal year that ends June 30.

Water rates will rise by at least 30 cents per 1,000 gallons. The Town Council will decide Monday night between two rate structures, including one that charges households more as their water usage rises.

The proposed tax rate of 58 cents per $100 of assessed value wouldmean property taxes on the average $134,000 home would be $311 annually, plus $1,260 in county taxes.

Council members already have gone over the budget in a workshop and made minor changes.

One changewas to earmark $5,500 to pay for a fourth police officer in May 1992until the end of the fiscal year. That could be accomplished if state income-tax money the town is expecting next year comes in as planned.

However, Mayor C. Clinton Becker said some community members and homeowner associations have suggested using the $5,500 to hire an additional crossing guard.

The other new position proposed is a part-time zoning administrator, at $19,412 annually.

Town Manager John A. Riley proposes two options for increasing water rates to generate the extra $15,000 to $18,000 needed to pay for higher water operating costs.

Residents now pay $10 quarterly to maintain their hook-up and use of up to 5,000 gallons of water, plus $1.35 for every additional 1,000 gallons.

One option would increase the charge to $1.65for every 1,000 gallons over the 5,000-gallon allotment each quarter.

The other option would raise household water rates as use goes up -- $3.30 for every 1,000 gallons over 20,000 gallons a quarter, anda higher rate -- still to be decided -- for more than 30,000 gallonsused per quarter.

Last year, the town was not required to conducta hearing on the budget, because it maintained the "constant yield" -- the total amount raised from taxes did not increase from the previous budget year. State law requires a municipality to hold a public hearing if the amount will go up, even if the tax rate won't.

The tax rate won't change, but because assessments have risen, the same 58-cent rate will generate more money and mean a slight increase for most property owners.

To raise only the constant yield, the town's tax rate would have to adusted to 52 cents per $100 of assessed value.

Riley said the town didn't need a higher tax intake last year, and maintained the constant yield. But this year, increased town operating costs and an anticipated decline in money from the state and county require the town to raise more in taxes, Riley said.

Other items in the budget include:

* A 4 percent raise across the board for the nine town employees, at a cost of $9,249.

* A replacement police cruiser at $15,500.

* A new well house and equipment at a $21,526, one-time capital cost, and $38,630 for a well tower that might need to be built near a well that is in danger of contamination from anEagle Oil Co. spill seven years ago.

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