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Mayor Martin presents FY26 budget: tax rate unchanged, water rate rises 50¢ to fund capital reserve and police raises
Summary
Mayor William T. Martin presented the city's proposed FY2026 budget, keeping the city property tax rate at 56.5 cents per $100 while raising the water rate from $7.50 to $8.00 per 1,000 gallons to seed a capital reserve in Fund 9; the proposal also funds a 5% raise for uniformed officers and schedules council work sessions.
Mayor William T. Martin presented his proposed fiscal year 2026 operating and capital budget to the Havre de Grace City Council on April 7, outlining revenue assumptions, targeted investments and a timeline for council review.
“I am proposing the current tax rate remain the same at 0.565 per $100 of assessed value, 56 and a half cents,” Mayor Martin said while formally handing the budget to council. The mayor said the city will not raise the property tax rate but will derive additional revenue from higher property assessments following the state's triannual reassessment.
Key elements of the mayor's proposal include:
- General fund: The mayor said the general fund is projected to begin FY26 with a $1,550,000 balance and estimated revenues of about $20,000,000. Overall spending in the proposed budget is $23,300,000 with $21,600,000 for operating expenses. The mayor said personnel costs would rise modestly, and he proposed directing new revenue to priority areas.
- Public safety pay: Mayor Martin said the budget includes a targeted 5% increase for uniformed police officers in addition to step increases, citing retention concerns and the city's need to remain competitive with larger agencies.
- Water and sewer (Fund 9): The mayor proposed establishing a capital reserve for the water and sewer system and directed an increase in the water rate from $7.50 to $8.00 per 1,000 gallons. He said the 50¢ increase is expected to generate roughly $340,000 annually to seed a reserve equivalent to one year of system depreciation; Fund 9 is projected to begin FY26 with about $2,360,000.
- Marine fund and dredging study: The Marina Fund (Fund 8) is expected to start with a surplus (about $927,000). Mayor Martin proposed funding a $20,000 engineering study to inform dredged-material management for Swan Harbor Farms.
- Funding context: The mayor noted the city has used bond proceeds and federal American Rescue Plan funds in recent years for major capital work and said a similar bond issuance is unlikely until 2028. He cited state grants previously awarded for the Star Center and said the administration secured $250,000 from the 2025 Maryland General Assembly for that facility.
Finance Director Abdul Abdi provided current fund balances during the meeting: the general fund balance reported at roughly $4,254,700 (reflecting timing differences), Fund 9 revenues rising and Fund 8 with a small change in balance. The mayor asked the council to review the proposed budget and announced two public work sessions: April 14 and April 28 at 6 p.m., both in the council chamber, with the budget to be posted online the following day.
Mayor Martin described the budget as "lean" but said the administration prioritized employee retention and critical infrastructure. The council will have opportunities for public comment during regular meetings and will consider introduction of a budget ordinance in June and final adoption later in the month. The mayor's cover letter and the full budget binder will be available to the public online.
