Orange County

Hillsborough holds tax rate, but may charge more next year for these services

Work started in late March 2018 to expand the West Fork Eno Reservoir in Cedar Grove, north of Hillsborough. The reservoir's dam can be seen in the bottom center of this photo. The auxiliary spillway, filled with water when the photo was taken, is to the dam's left.
Work started in late March 2018 to expand the West Fork Eno Reservoir in Cedar Grove, north of Hillsborough. The reservoir's dam can be seen in the bottom center of this photo. The auxiliary spillway, filled with water when the photo was taken, is to the dam's left. Submitted

UPDATE: The Hillsborough Board of Commissioners approved a slightly lower, $22.6 million budget on June 10, 2018.

The budget keeps the same property tax rate, but increases the planned water rate hike to 9.25 percent next year. The sewer rate will be going up 7.5 percent. Additional 7.5 percent increases in both fees are expected for the next two years.

The new rate means in-town water customers will pay $22.05 a month for up to 2,500 gallons of water and $32.60 for monthly sewer service. Out-of-town customers will pay $43 for water and $63.55 for sewer services each month.

A proposed town budget could see water and sewer customers paying more for utilities next year, while the town's property tax bills remain about the same.

Town Manager Eric Peterson said his proposed $22.9 million budget takes into consideration a request from the mayor and Town Board that he avoid raising the town's stormwater fee and property tax rate.

“The pressure of new development bringing in more residents, businesses, and visitors to Hillsborough tests the strategy of assembling a budget that meets current and future demands,” Peterson said.

Eric Peterson
Eric Peterson

The Hillsborough Town Board will hold a public hearing on the proposed budget Monday in the Town Barn on East Orange Street.

Hillsborough is the only local government that appears to be holding the line on property tax rates next year.

Orange County, Chapel Hill and Carrboro are considering the following increases:

Orange County: The Board of Commissioners could raise taxes by 5 cents per $100 in property value this year, or phase in a possible 7.95-cent increase in over the next four years. Next year's recommended 1.4-cent increase would set the county tax rate at 85.19 cents for all Orange County property owners. The owner of a $300,000 home would pay $2,555.70 in county taxes.

Residents countywide also could pay more — $132 — for curbside recycling.

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Chapel Hill: The Town Council is weighing a 3-cent tax-rate increase. If approved, a Chapel Hill taxpayer with a $300,000 home would pay a town tax rate of 53.8 cents per $100 in value — an annual tax bill of $1,614 — plus county and school district taxes.

Downtown property owners pay an extra 7 cents per $100 in property value. The money pays for a downtown groundskeeper and other downtown projects, including costs related to the Launch incubator and 140 West.

Carrboro: The Board of Aldermen is considering a half-cent increase, which would raise the town's tax rate to 59.44 cents per $100 in value. The owner of a $300,000 Carrboro home would pay a town tax bill of $1,783.20, plus county and school district taxes.

Chapel Hill-Carrboro City Schools district tax: No increase is proposed. Only Chapel Hill and Carrboro residents pay the district tax rate of 20.18 cents per $100 in property value, which adds $605.40 to the tax bill for a $300,000 home.

Chapel Hill and Carrboro residents also could pay more for water and sewer services next year, primarily for repairs and upgrades to roughly 800 miles of underground pipes, plus water and sewer equipment.

The Orange Water and Sewer Authority is proposing a 2 percent rate increase as part of its 2018-19 budget — an increase of $1.41 a month for the average household using 4,000 gallons of water, officials said. A public hearing is set for Thursday, May 24, in Chapel Hill.

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Hillsborough's budget would leave the town's tax rate at 62 cents per $100 in property. The owner of a $300,000 property would continue to pay an in-town tax bill of $1,860 a year, plus county taxes.

However, Hillsborough utility customers would pay 7.5 percent more a month for water and sewer services. The increase is expected to be the first of three 7.5 percent increases over the next three years.

The water bill for in-town customers using up to 2,500 gallons a month would rise to $21.70 a month and the sewer bill would rise to $32.60. Out-of-town customers would pay an increased rate of $42.30 a month for up to 2,500 gallons of water and $63.56 for sewer.

The proposed budget also increases the water fee for new development by 29 percent, while reducing the sewer fee by 7 percent.

It’s been six years since the town increased water rates, Peterson said, but in that time, they have cut the amount charged each month to customers who use less water.

The pending fee increases are needed to pay for the $16 million West Fork on the Eno Reservoir expansion, designed to prepare the town for future needs, he said. They’re also still paying for the 2014 wastewater treatment plant update, which was required to meet strict nitrogen discharge limits under the Falls Lake Rules.

The Falls Lake upgrades doubled the town’s annual wastewater treatment plant expenses, Peterson said.

“These costs, coupled with a desire to take care of our water and sewer infrastructure, to provide clean and safe drinking water to the community, then safely discharge it back into the Eno River is an expensive endeavor that clearly puts a financial strain on its customer base,” he said.

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The town’s utilities system also is facing some pressure from the loss of its Efland-Cheeks sewer customers last year to Mebane, he added. While that will cut costs in the long run, it also cut about $372,000 from the town’s sewer revenues, he said.

Other big-ticket costs include continuing water and sewer system repairs and upgrades, including next year’s plan to replace old, cast-iron Churton Street water mains and install a new sewer main at South Churton and Orange Grove roads.

The $440,000 sewer main will help the town provide services to the pending, 1,100-home Collins Ridge development.

Other budget highlights include:

Town salaries: An average, merit-based raise of 3.25 percent for employees, plus some adjustments to bring salaries in line with the surrounding market for similar positions

Streetscapes: $350,000 to continue repaving local streets, $92,000 for stamped crosswalks downtown, $43,000 for public art, parking and other public space improvements

Riverwalk: $221,062 for multiple projects, including a greenway from Gold Park to Allison Street, a sidewalk along Allison Street to the Occoneechee State Natural Area trails, and upgrading the intersection at Eno and Nash Streets

Tammy Grubb: 919-829-8926; @TammyGrubb

What's next

The Hillsborough Town Board will hold a budget work session and public hearing Monday, May 21, in the Town Barn's downstairs boardroom, 101 E. Orange St. in Hillsborough. The meeting begins at 7 p.m.

The Board of Directors of the Orange Water and Sewer Authority also will hold a public hearing. It begins at 7 p.m. Thursday, May 24, in the Chapel Hill Town Hall council chamber, 405 Martin Luther King Jr. Blvd.