AHOSKIE – The projected costs of operating the largest municipality in the Roanoke-Chowan area increases dramatically for the 2011-12 fiscal year, which begins July 1.

On the other hand, the tax rate that feeds the town’s financial coffers is decreasing.

On Tuesday, the Ahoskie Town Council gave their approval to the new budget – a $10.63 million package that includes a 76-cent (per $100 of valuation) tax rate, marking a three-cent decrease from the current 79-cent rate.

The tax rate decrease is due to revaluation of all property in Hertford County. That process, conducted every eight years, revealed an estimated tax base of $229.4 million of Ahoskie residential, commercial and personal property.

Based upon the new tax base, Ahoskie Town Manager Tony Hammond said the revenue neutral tax rate (one producing the same amount of tax revenue with the current year budget) would be 73.9 cents. The extra 2.1 cents, he said, will be set aside for construction and debt service payments for a new $1.7 million fire station.

The new budget, approved following an advertised public hearing, reflects $7.3 million in the General Fund, a 30 percent increase over the current year, and $3.3 million in Enterprise Fund expenditures (an 11 percent hike).

Hammond said the new budget needs an appropriation of $290,823 from the Fund Balance and another $600,000 ($253,395 in salaries plus $346,605 in utility charges) from the Enterprise Fund to balance the budget. However, he pointed out that sound management practices throughout the coming year will hopefully result in none of those appropriations being used.

The new budget freezes the hiring to fill two open positions. Current employees will receive a cost of living adjustment to their salaries as well as merit-based pay increases.

In addition to the fund balance transfers, projected revenues to help fuel the new budget include $1.74 million in property taxes, $679,967 in garbage collection charges, $160,000 in motor vehicle taxes, $645,000 in local option sales tax and $150,000 in Utilities Franchise Tax. Another major revenue source will be nearly $2.1 million in grants and loans to fund several capital improvement projects, the most notable of which is the new fire station. Other listed projects included $153,176 for the police department, $84,703 for the recreation department and $95,000 worth of repairs for the town gym.

The lion’s share of the revenue will fund the Fire Department ($2.25 million, which includes the $1.7 million for the new station), Police Department ($2.1 million), Cultural & Recreational ($761,741), Administration ($535,785), Environmental ($459,480), Streets ($414,740) and Public Works ($303,202).

There are no increases to the rates of the town’s water and sewer customers.