Hampshire looks at rate hikes to fill budget hole

Hampshire residents might have to endure water and sewer rate increases and go without a new police chief as the village copes with falling revenue and a budget deficit.

The proposed rate increases and a continued vacancy at the police department's top post are among the cost-saving recommendations in Hampshire's proposed budget for the 2009-10 fiscal year, which starts May 1.

"We all have to make personal sacrifices in our own lives, and governments are no different," said Village Administrator Eric Palm, the chief architect of the budget. "I think (the proposed budget) sets us up in a better position for the long term."

Under his proposal, water rates would rise from $3.50 to $4.25 per 1,000 gallons, and sewer rates would go up from $4.30 to $5 per 1,000 gallons.

The monthly water and sewer bill for a family that uses 5,000 gallons each month would rise from $39 to $46.50.

Palm said the increases would help erase deficits in Hampshire's water and sewer funds, which are supposed to cover their own costs.

The budget proposal, which the village board is expected to vote on April 16, reflects a decline in sales tax revenue - down about 20 percent this year - and building permit revenue, which has fallen from more than $300,000 last year to about $50,000 this year.

To keep up with the decline and close a projected deficit of almost $300,000 at this end of this fiscal year, Palm has proposed the village cut spending next year, trimming the operational budget of about $3.1 million this year to about $2.7 million.

Palm has recommended that the village not fill three vacancies - the police chief, one police officer and the finance director, who's leaving later this year.

If the village board signs off, Brian Thompson will continue to be interim chief, a position he's held since Tom Atchison retired earlier this year.

"He is more than capable of handling that position in an acting capacity," Palm said.

Palm said his proposals will allow Hampshire to have a balanced budget next year.

"We're able to bring the budget in the black next year," Palm said. "We're really trying to watch every dollar."