Havre De Grace Unveils 2024 Budget: Rising Costs Prompt Water, Sewer Rate Hike; Major Investment Planned For Downtown Revitalization

HAVRE DE GRACE - The City of Havre de Grace has publicly released its fiscal year 2024 budget. Passed on June 5, the new budget reflects the challenges presented by rising inflation and the city's commitment to revitalizing local infrastructure.

Revenue

According to Mayor Martin, General Fund One is expected to begin the fiscal year with nearly $1.75 million in leftover funds, but will be balanced by the year's end. 

The city expects a decrease in budgeted revenues by $869,000 compared to FY 2023, primarily due to an anticipated reduction in county grant funds.

"These grants were one-time awards and have resulted in a shoreline that has become the leading example of Chesapeake Bay stewardship throughout the State," Mayor Martin noted.

Though property tax rates will remain at $0.565 per $100 of assessed value, unavoidable cost increases necessitate a hike in water and sewer rates, the first since 2019. Metered water usage will rise from $6.20 per 1,000 gallons to $6.80, while sewer rates will go from $9.30 per 1,000 gallons to $10.20.

According to the budget statement, the anticipated additional property tax revenue of $236,500 will only partially offset increased water and sewer operating costs resulting from growth in population and residences, mandating the price increase.

"For the first time since 2019, I am forced to raise rates to responsibly address inflation," Martin noted. "The sizable growth in both population and residences place a greater demand on City infrastructure and services."

When combined with the anticipated commencement of water service to the City of Aberdeen in late FY 2024, the rate increase is expected to generate adequate income to offset the projected rise in costs and contribute $1.35 million to the capital program.

Even with a decrease in grant funding, the city forecasts a revenue rise from multiple sources. Highway User Fees are expected to increase from $634,100 in FY 2023 to $791,000 in FY 2024. There's also an expected surge in service fee income, largely driven by rent from the Star Centre, projected to generate $583,500 in FY 2024.

To further account for rising costs, the city plans to moderately raise Marina slip rental fees in accordance with Ordinance 1091.

Spending

Overall spending is budgeted to be almost $26 million, an increase of $2.8 million over projected spending for fiscal 2023.

In FY 2021, Havre de Grace was awarded $13.8 million from the federal government under the American Rescue Plan Act (ARPA). The city plans to invest about $6.4 million of those funds toward the downtown restoration and resiliency project in fiscal 2024.

Capital expenses are budgeted to be $7.4 million in fiscal 2024, a $1.2 million increase over last year's projected spending. According to the Mayor's office, most of the rise can be attributed to ARPA-funded projects totaling $5.2 million that are expected to continue into fiscal 2024.

Budgeted personnel costs, including salaries, overtime, healthcare, pension, and other employee insurances, will drop $166,000 from FY 2023's personnel budget, a 0.9% decrease.

"To combat current economic challenges and long-term sustainability, I intend to continue using outside professional services, when appropriate, instead of permanent staffing level increases," Martin said.

Despite this, administration costs are expected to rise significantly, increasing from $3,494,100 in FY 2023 to $4,334,300 in FY 2024. This increase is primarily due to funds requested for special events, including employee hospitalization, workers' compensation, and other costs.

Public Safety will see a slight increase in funding from $5,707,400 in FY 2023 to $5,751,200 in FY 2024. The Public Works budget will also see a minor increase, rising from $4,625,500 in FY 2023 to $4,657,800 in FY 2024.

Spending on capital projects will reduce from $1,974,800 in FY 2023 to $1,076,900 in FY 2024. This decrease is mainly due to the completion of the $477,900 rehabilitation of the Star Centre in FY 2023. However, there will be continued spending at the Star Centre, with $300,000 allocated for the STAR Centre's Light System/LED Wall and $200,000 for other projects at the location.

"The downtown revitalization and the STAR Centre represents an $8.5 million investment to address overdue improvements... and enable thriving social and economic engagement for the benefit of citizens, visitors, and merchants," Martin said.

The Mayor's office also stated that the city is "well on its way" to using the $15 million citizen-approved bond proceeds borrowed for water and sewer infrastructure rehabilitation. The funding is expected to be fully utilized by the end of next year.

"The 2024 budget reflects our continued shared commitment to make Havre de Grace the most desired place in Harford County and, in my view, the entire region, to live, work and enjoy," Mayor Bill Martin said.

For more information about the FY 2024 Havre de Grace city budget, tax rates, or the water and sewer rate increase, visit the Havre de Grace Department of Finance's website.

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