Statesville's proposed $81.8million budget for fiscal 2010-11 would increase the average homeowner's combined electric, water and sewer rates by about $90 a year.
Commercial property owners won't escape the pain, either. Electric, water and sewer fee hikes together would amount to more than $200 a year for them, on average.
And that's not counting a possible property tax increase or a new sanitation fee, which the city is considering to pay for 15 more firefighters to staff the new fire station.
The public may comment on the proposed budget at a public hearing at 7 p.m. Monday at the city hall.
City manager Rob Hites said the proposed budget requires tough decisions by the council.
"We are preparing for a long period of economic uncertainty," Hites said. "Sales tax revenues will drop, and we expect decreases in assessed value for business property and motor vehicles. This budget also does not include any salary increases."
The 5percent electric rate hike is essentially a pass-along of a wholesale rate increase from Electric-Cities, which provides electric power to the city. It would be the third straight year the city has raised electric rates; this year rates went up by 8percent.
The 6percent increase in water/sewer rates would be the first since 2005. It is needed, Hites said, "for the long-term fiscal health of the water and sewer fund." He said the proposed budget would use $677,000 in surplus funds to cover part of the city's capital expenses. "Without these funds, the proposed increase would have been 14percent," he said.
To fund the new firefighters, two alternatives are proposed:
A fee of $2 per month for sanitation services. "Many cities charge a refuse collection fee.... Statesville has used general fund revenues to fund our sanitation service," Hites said. "As revenues shrink due to the recession, one of the logical alternatives is to charge $2 per month per household or business...."
Or increase the property tax rate by one cent per $100 assessed property valuation. The current rate is 38cents per $100 assessed value. A penny increase would add about $25 annually to the city tax bill for the owner of a home valued at $250,000.
To avoid both options, the council could delay hiring the new firefighters until July 2011.
None of the council members commented after hearing Hites' presentation May 3. Mayor Costi Kutteh announced the council will meet for budget workshops after Monday's public hearing to discuss the options presented to them. The first is scheduled for 5 p.m. May 24.
Monday's public hearing will be during the council's regular 7 p.m. meeting.