FRONT ROYAL — Town Council set new tax rates and took a first look at next year’s budget on Monday.

Council voted 4-2 at a special meeting to adopt on a second and final reading a tax rate on real estate of 13 cents per $100 of the assessed value. Councilman Daryl Funk and Councilwoman Bébhinn Egger voted against the motion to adopt the rates. Vice Mayor Hollis Tharpe and Councilmen Bret Hrbek, Eugene Tewalt and John Connolly voted in favor of the rates. Passage of the motion to adopt the rates required support by a super majority of council.

The current rate is 13 cents, but the recently completed reassessment of real estate showed a slight increase in the average property values in town. Leaving the levy unchanged is still a rate increase of ¼ of 1 cent. Council’s action also leaves the tax rate for personal property as well as machinery and tools at 64 cents per $100. Council set the levy on mobile homes at 13 cents.

Finance Director Kim Gilkey-Breeden has said the slight increase in the real estate levy over the equalized rate will generate about $30,000 in extra revenue.

Town Manager Steve Burke presented a proposed budget for fiscal 2016 during council’s work session following the meeting. The $44.24 million budget includes spending on government administration as well as the town’s four utility funds. The $44.24 million represents a $4.8-million increase, or 12.1 percent, in spending over the current budget.

The total amount includes a general fund of $13.35 million that covers government administration, police and other departments excluding those that handle the town’s utilities. That amount represents a 7.82-percent increase over the $12.38 million in the current budget.

Even with the proposed increase in spending, the budget calls for no increase in the rates for water, electric power and trash pickup. The budget also includes a 6.5-percent reduction in the sewer rate.

Burke has proposed numerous changes in personnel, including the expansion of the finance director position to include duties as an assistant town manager. Other budget highlights include:

• A merit-pay increase of $1 per hour for employees – the first since 2007;

• A New communications officer for the police department;

• A new events and marketing coordinator position created in collaboration with the Northern Shenandoah Valley Regional Commission;

• A new line technician in the Department of Energy Services;

• A new swing shift operator for the water treatment plant and a new operator at the wastewater treatment plant;

• Incentive plans to retain employees.

Burke told council that as the economy picks up, the town has lost some of its skilled employees to private-sector jobs.

Health insurance costs are expected to increase by 6.5 percent, as reflected in the budget. Burke has proposed the town eliminate the retiree insurance benefit for new employees.

The budget also includes funding for capital projects such as the Leach Run Parkway, pavement restoration on John Marshall Highway, the town’s share of the cost to repair the Catlett Mountain Landfill, the design of the new police headquarters and other items.

Town officials have tentatively scheduled the public hearing on the proposed budget for May 11.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or