By Elizabeth Wilkerson -- Daily Staff Writer

STRASBURG — As well as a roughly 12 percent increase in water and sewer rates, the town's fiscal 2009 budget may include a $4,000 hike in water and sewer hookup fees, officials said Monday.

At the Town Council finance committee's Monday meeting, Councilman Donald Le Vine said the panel needed to decide how to prepare to pay for such upcoming projects as new water and wastewater treatment plants.

The current draft budget, which has no general fund tax increases and no raises for employees, includes a roughly 12 percent increase in water and sewer rates, he said. The budget also assumes that 50 houses will be built in fiscal 2008, which would generate $800,000 in revenue from the hookup fees, which are now $8,000 each for water and sewer service, he said.

Le Vine suggested the town boost its hookup fees to $10,000 each for water and sewer, raising the total for both services to $20,000 from $16,000. Any revenue the town receives above the $800,000 already factored into the fiscal 2009 spending plan could be put into the water and sewer reserve fund to help pay for the utility projects, he said.

He said any money the town saves for the projects now will help minimize increases in water and sewer rates in the coming years.

Councilwoman Sarah Mauck asked what effect the increase would have on the price of homes in town. Councilman Tim Taylor said he didn't think the hookup fees would drive up the cost of new homes.

Councilman Scott Terndrup said the increased fees may make buying existing, rather than new, homes more appealing. But he questioned whether the extra revenue should be earmarked for the reserve fund.

"Sometimes we dig ourselves into a hole today trying to predict tomorrow," Terndrup said. "That's my only consideration. ... Do you really want to earmark moneys, because then you're stuck with that decision."

Le Vine said he was just suggesting a policy, and future councils could change that policy if they chose. He said he wanted the council to "make a conscious decision" about whether to set aside money to help "cushion" future debt service payments.

Taylor said he liked the idea of the extra revenue going into the reserve fund. Councilman Carl Rinker said the town didn't seek out the coming debt, but it still has to find the money to pay for the projects.

"Somehow, we've got to come up with these funds, folks," he said. "We ought to have a rainy day fund ... and I think we ought to be constantly adding to it."

Rinker said the $2,000 increase in each of the hookup fees was not unreasonable, and any revenue above the $800,000 should be added to the reserve fund.

Le Vine said he would include the increased hookup fees in the budget.

At its May 21 meeting, the committee will take up the salary and benefits study, which is now being conducted by Springsted, a consulting firm, as well as the question of whether the budget will include raises for town employees, Le Vine said. That meeting will begin at 7:15 p.m., he said.

* Contact Elizabeth Wilkerson at ewilkerson@nvdaily.com