While the tax rate will remain the same, water and sewer fees and rates will rise, and locals also can expect increases in fees for garbage and recycling, as suggested in the town’s proposed 2010-2011 fiscal year budget, which was presented at the Holly Springs Town Council May 18 meeting. The council voted at the meeting to raise water and sewer rates; council members will meet next week to further discuss the proposed budget.

Taxes remain at $0.415 per $100 valuation in the proposed budget. The council voted in approval of a $1 increase in the access fee for both water and sewer service and an overall rate increase of 4 percent for water and 6 percent for sewer. Both water and sewer service will have access fees of $10.50 per month.

A $0.60 increase in monthly garbage collection fees and a $0.40 increase in monthly recycling fees are proposed. No increase in yard waste collection fees was proposed.

“We have seen the downturn of the economy as most other towns and local governments in the state have seen,” said Carl Dean, town manager, who presented the proposed budget.

“It pains me deeply to vote for a water rate increase but I see no alternative right now, and my word is that we are going to hold staff to the task of reducing our water rates down the road,” Dean said. “I mean that sincerely.”

The council voted on the new rates at last week’s meeting instead of at an upcoming meeting with the rest of the budget for next fiscal year to show the North Carolina Local Government Commission “evidence that the town can cover its obligations through its revenues” for an application for approval to issue $10 million in revenue bonds, a staff document said.

The town cannot use the wastewater treatment plant as collateral since it generates revenue that is the security for a previous revenue bond issued in 2008. A staff document said the rate increases were necessary, regardless of whether the town issues revenue bonds, to pay for infrastructure already in place. Dean said the increases in water and sewer service were needed to cover debt for several projects – the wastewater treatment plant expansion, participation in the regional wastewater facility and a water capacity purchase from Harnett County.

Dean said the infrastructure will support the town for the next couple decades or more and will enable future development.

“We made the investment and now we’re paying for it, but it’s going to serve us long into the future,” said Councilman Tim Sack.

Councilman Parrish Womble said at some point, water and sewer rates might decrease. Mayor Dick Sears said a couple nearby municipalities are interested in buying water from Holly Springs.

“I think the biggest thing was to go back and try to have a sustainable budget, one that would still maintain the service level,” Dean said.

Dean said the proposed budget is based on existing revenues instead of revenues the town expects to receive. If the proposed budget is passed, the town is to spend $70,000 on updating its transportation improvement plan and is to donate $65,000 to nonprofit organizations, including a $35,000 contribution to the town chamber of commerce.

Seven new positions are proposed in the budget: two police officers, a school resource officer, three firefighters and a recreation program specialist. The town also is to reclassify positions in its information technology department. While no cost of living adjustment is in the proposed budget for employees, merit or performance pay and a 5 percent 401(k) contribution and longevity benefits are included, as is a state-mandated retirement increase of 1.51 percent.

“We’ve done a lot of work to make sure we’ve made this budget as tight as we could,” Dean said.

The council is to meet at 4:30 p.m. June 1 in the Holleman Room at Town Hall for a workshop to further discuss the budget.

Later in the meeting, the council adopted a resolution for the application for revenue bonds to fund the last portion of the wastewater treatment plant expansion. The revenue bond is payable solely from the operating revenues of the town’s utility system.

In other meeting business, the council ratified an inter-local agreement with the town of Apex for inspections services. Holly Springs is to send a licensed building inspector to Apex for approximately 15 hours per week; Apex is to reimburse Holly Springs $200 per call, and each call allows up to five hours of service. The council approved a special exception use for The Woods at Avent Ferry, a senior living community, to be built off Cotton Ln., which joins Avent Ferry Rd. near its intersection with the G.B. Alford Hwy. The special exception approved variances of development setback requirements, density and parking. The development is to contain 64 units that are fully handicapped accessible.

“There was a little concern,” said a Planning Board representative, about how close the buildings were planned to existing developments and about the intensity of the development.

The developer is to discuss fees with the town.

The council approved a request from a citizen to allow a fundraising festival for Little People of America Inc. and Crohn’s and Colitis Foundation of America. The festival is entitled Beach Buddies and is to be held Oct. 24 at Womble Park. The festival is to feature beach music, games, food and spirits. Admission to the event is to be $15 per ticket for ages 13 and older.

“The money collected at the event would be used to benefit both organizations,” said Janet Baker Lessard, one of the event organizers. “We want to involve the Little People of America as well as anyone who is affected by Crohn’s or colitis.”

An ordinance amendment is needed to allow alcohol to be served at the event.

The council also approved selling two ambulances of the town as surplus property, and it approved of Braxton Village placing a subdivision sign in the right-of-way.

Councilwoman Linda Hunt Williams was absent from the meeting.