Apr. 23--GRAHAM -- The city of Graham is feeling the economic pinch like everyone else, and it will be a barebones budget this year with a 3 percent increase in water and sewer rates being proposed.

It's anyone's guess what the property tax rate will be this year because of revaluation, City Manager Chris Rollins told the council Tuesday, but his "gut instinct" is the revenue neutral-rate after a recent county property revaluation should be in the 44 to 44.5 cents per $100 range.

The council met at the Graham Civic Center in a session to get a state-of-the-budget assessment by Rollins.

The city's current tax rate is 48 cents per $100 of property value. This raises revenue to cover the current year's $11.14 million general fund budget. The city's water and sewer fund of $6.63 million will require at least 3 percent to keep it self-supporting, Rollins said. The loss of high-volume water users like Culp and Cortina in Swepsonville has lowered water-sewer revenues by $1 million a month. High costs of treatment chemicals, electricity to run the water distribution and sewer collection systems, and a staff state-certified in running both operations means there's "very little wiggle room" for budget adjustments.

The county is still hearing landowner appeals from the recent revaluation brouhaha, and this means Rollins can only get ballpark estimates on Graham's future budget. Growth has been an average of 1.6 percent a year since the last revaluation, he noted. Lower sales tax and Powell Bill revenues are also expected, with overall revenues estimated to be down 9 percent.

Rollins has asked all departments to reduce costs by 5 percent.

He noted capital spending was also being cut by 11 percent.

Gone are plans for a fire substation, some sidewalk work, some much-needed work on the Boyd Creek sewer line, one of the oldest in the city, and "lots of little stuff." There are 129 city positions with seven unfilled vacancies.

There will be a one-year moratorium on merit raises and no immediate cost-ofliving increases, Rollins said. He did allow for a 2 percent set-aside in case the economy moves and the council can consider raises in January or February.

Health costs may go up a tad this year, maybe as low as 3 to 4 percent, Rollins said. The city's insurance carrier had asked for more than 15 percent in increases, but with negotiations over deductions and co-payments for drugs, Rollins said he thought that could be whittled down.

"Things are as tight as they've ever been," Rollins said. "The budget won't have any fat in it." He said personnel was as tight as it could get and it was to the point that if any more spending is required, it would mean cutting services or raising taxes. He said the city needs a sanitation truck, a truck for the water department and replacements for three police cars.

The council members were generous in their praise of city workers in these tight times. Councilwoman Jennifer Talley cited a recent encounter with workers jumping in with jobs that they were not required to do.

"They really had the good attitude to help out." Rollins concurred, saying that if Graham city workers "see something that needs to be done, they are ready to do it." Most nodded when Councilman Jimmy Linens said, "like everyone else, they're just glad to have a job." Mayor Jerry Peterman suggested a meet-and-greet with city workers sometime next month and urged all council members to hand out praise to "our guys" when they got the chance to "keep morale up." Rollins will present the council with a proposed budget at its next meeting. Public hearings will be scheduled and the budget must be adopted before the end of June.

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