PITTSBORO—The Chatham County Board of Commissioners adopted a budget Monday that raises the tax rate 3.6 cents to 65.3 cents per $100 of assessed property value.

The owner of a $200,000 house will pay $1,306 in county property taxes next year, a $72, or 5.8 percent, increase.

The county manager had proposed a 5.5 cent tax rate increase.

“We would prefer not to have any tax increase at all,” Chairman George Lucier said. “However, we did not see a way to further reduce the budget without hurting important programs and services.”

Lucier said revenues for local governments across the state have been hurt by the economic situation. “Yet, this is often the time that we see an increased demand for certain services,” he said. “It is a difficult dilemma for elected officials.”

Commissioners did increase spending in a few areas. They voted to increase the teachers supplement by $300, up from a proposed $150 increase, and to increase the supplement for teaching assistants, bus drivers, and other classified personnel by $100, up from a proposed $50 increase.

However, most actions Monday were aimed at reducing the budget, including cutting funding for a new Community Development Department by $186,207.

The Community Development Department would coordinate the current functions of planning, central permitting (including building inspections and fire marshal), sedimentation and erosion control, and environmental resources. In addition, it would handle new functions related to transportation, affordable housing and green building initiatives.

A new agreement to obtain water from the city of Durham will save Chatham $722,266 that would have been transferred to a water capital reserve. “We can get Durham’s water at a lower rate than we can produce the water ourselves,” Lucier said. “This will allow us to now devote more resources towards a regional intake on the western side of Jordan Lake,” Lucier said.

David Hughes, director of public works, said that the water agreement with Durham means that 1 million gallons per day would be available to the county starting March 1, 2009, increasing each year by 1 million gallons per day to 4 million gallons per day by March 1, 2012. The agreement runs through 2028 or until Chatham County water completes additional production facilities, whichever comes first.

In other budget actions, the board -- Delayed implementation of a county employee pay study until Oct. 1, saving $154,481. A recent pay study showed that general county salaries were substantially below those of surrounding local governments. Funding in the budget will at least bring all employees up to the minimum of their salary grade, but other needed adjustments have been delayed until at least the next budget year.

-- Eliminated proposed increases in county commissioner salaries, saving $4,913.

-- Reduced the amount transferred to a parks capital reserve to $522,266, a savings of $200,000.

-- Reduced the proposed appropriation for the Sheriff’s Office by $32,000.

Other increases in the budget included restoring proposed cuts for Chatham Trades ($17,000) and Chatham County Together ($3,000) and reimbursing Chatham Hospital for the cost of a traffic turning lane ($150,000), which will be funded from fund balance. .