Hertford budget would raise tax rate by 4 cents

Hertford taxpayers will see a 4-cent property tax rate increase and residents will see increases in both their monthly sewer and electric bills if Town Council approves the town manager’s $7.67 million proposed budget for 2024-25.

Hertford Town Council is scheduled to hold a public hearing Tuesday on Manager Janice Cole’s budget proposal that raises the town’s property tax rate from a revenue-neutral 48 cents to 52 cents, base monthly sewer charge from $43.70 to $47.02, and base monthly electric service charge from $15 to $18. The budget proposal also would award town employees a 3% cost-of-living increase costing the town a little more than $39,000.

Cole cited increasing costs for the proposed increases.

“We have tried to keep our tax increase to a minimum, but it (the 4-cent increase) is necessary because the costs of everything have and continue to go up,” she said in an email. “Our utility rate increases are also necessary because of price increases of chemicals and electric poles and other operating costs.

“In addition we must generate sufficient income to maintain and replace our pipes and (water and sewer) systems so that in 10 years our streets won’t be caving in or (we) have water standing in them because of the condition of the pipes underneath,” Cole said.

The proposed budget accounts for the recent property revaluation in Perquimans County that increased Hertford’s tax base by $43.2 million this year. Last year, the town’s tax base was $119,602,769. This year, following revaluation, the tax base is $162,809,911.

Because of revaluation, Cole’s spending proposal decreases the town’s current property tax rate from 65 cents per $100 of property valuation to a revenue-neutral 48 cents. A revenue-neutral tax rate raises roughly the same amount of revenue as the previous higher rate because the tax base is higher.

In Hertford’s case, a revenue-neutral rate of 48 cents raises only about $4,000 more than the 65-cent rate did this year. The 65-cent rate raised $777,418 in revenue; the 48-cent rate, because of revaluation, would raise $781,487 in 2024-25.

Cole is proposing that Town Council raise the tax rate from a revenue-neutral 48 cents to 52 cents. That would raise $846,612 in revenue in 2024-25, a little over $65,000 more than this year. However, because the town’s property tax collection rate is 97%, Cole estimates the actual amount in additional revenue will only be $846,612, about $40,000 more than if the rate remained revenue-neutral.

To help explain the revenue-neutral rate, Cole said she sent one taxpayer a breakdown of what their tax bill would be with the current 65-cent rate, the 48-cent revenue-neutral rate, and the proposed 52-cent rate.

If their property’s current value, before revaluation, was $252,400, their annual tax bill at the current 65-cent rate would be $1,640. If, following revaluation, their property’s value was now $346,000, their tax bill at the revenue-neutral rate of 48 cents would be $1,661, about $21 more.

If Town Council agrees to Cole’s proposal to raise the property tax rate by 4 cents beyond the revenue-neutral rate, that same property owner’s annual tax bill would rise to $1,799, or about $160 more in 2024-25.

Under the budget proposal, some of the larger expenditures in the general fund include $489,592 for town administration, $459,836 for street maintenance, $375,000 for law enforcement, $218,017 for fire protection, $184,140 for sanitation, $174,000 for planning and zoning, and $130,707 for an expenditure labeled “governing body.”

The town’s water-sewer rate study performed by the N.C. Rural Water Association called for rate increases totaling 18.75% over five years. This year’s sewer increase was 9.4% and the study originally called for an increase of 3.5% in 2024-25. However, when the NCRWA updated the study this year, it determined the town would need to increase rates by 7.6% in 2024-25, Cole said.

That’s why, if Cole’s proposal is approved, customers will see a $3.32 increase on their monthly base charge for sewer service and a $1.01 increase — from $13.23 to $14.24 — on their monthly usage charge if they use 12,000 gallons or less. Those using more than 12,000 gallons would see their monthly charge rise from $15.22 to $16.37, or $1.15 more. The increases will bump up the town’s water and sewer revenue from $2,202,847 this year to $2,276,842 next fiscal year.

Under Cole’s current schedule, the town’s spending plan is set to be adopted by Town Council on June 10. Council has until June 30 to approve a budget for the 2024-25 fiscal year.