Hampstead council adopts FY2027 budget, keeps property tax rate steady and approves 8% water rate increase

HAMPSTEAD, Md. — The Hampstead Town Council on Monday adopted its FY2027 budget, kept the property-tax rate unchanged at $0.22 per $100 of assessed value and approved an 8% increase in water rates to help pay for regulatory-driven upgrades to the town’s water system.

Mayor Nevin, who introduced the budget at the public hearing, said the council’s priorities remain “retaining our small town charm by keeping Hampstead safe, affordable, and a great place to live and raise a family,” and emphasized long-term fiscal planning as the rationale for the budget decisions. “It’s important to outline how we’re going to spend the hard-earned money,” he said during the hearing.

Nut graf: The adopted FY2027 budget projects roughly $4.99 million in revenues, with property taxes expected to generate $1,981,000 (about 40% of projected revenues). Council members approved several amendments before final passage, including funding for lamp-post replacements and a community parks grant, and authorized a $1.5 million revolving line of credit to bridge contractor payments on a state-funded Program Open Space (POS) water-improvement project.

Council members and votes: Before the roll call on the budget ordinance, Council moved and seconded the amendment and then adopted Ordinance 560 as amended. During roll call for the adoption of Ordinance 560 (FY2027 budget as amended), Mayor Nevin and council members Barrett, Painter, Thomas, Anglesby and Zman voted yes; the motion carried unanimously.

Why water rates rose: The council also adopted Resolution 202602 to raise water rates by 8%. Mayor Nevin told the council the increase reflects both capital and operating costs tied to new EPA and state (MDE) regulatory requirements and the town’s ongoing water-system modernization, including carbon-activated filtration work. “Water rates are going to go up 8%,” he said, noting future increases are possible as additional regulatory requirements and capital needs emerge.

Line of credit and cashflow: Council approved a $1.5 million revolving line of credit with Farmers and Merchants Bank to cover contractor payments that will occur before the town receives state reimbursements for POS-funded work. The mayor explained that contractors must be paid on shorter cycles than the state’s reimbursement timeline, creating temporary cashflow needs.

Other adopted measures: The council also passed Ordinance 559 (levy of taxes for FY2027) with the tax rate unchanged, Resolution 20264 (adopting the 2024 water-resources element), and Resolution 20263 (an amendment to the town charter regarding uncontested elections, adopted as amended). Each measure carried with council approval during the meeting.

Context and budget details: The town’s budget documents show total recurring revenue up year-to-year, with program-open-space funding included. Mayor Nevin reported business personal property taxes and local income-tax shares as notable revenue sources, and said health-insurance costs ("well over $500,000") and trash removal (about $425,000) remain significant expenditures. The mayor summarized that the town is trying to balance infrastructure needs and service levels while limiting tax-rate increases.

What’s next: The council approved the budget and related measures in the meeting; implementation steps discussed included proceeding with the planned POS and water-system capital work and executing the bank line-of-credit agreement. The town expects to continue project work through the construction season and said staff will complete required administrative steps, audits and public notifications.

Votes at a glance: - Ordinance 559 (FY2027 tax levy): adopted; tax rate unchanged ($0.22 per $100). Vote: unanimous (Mayor Nevin; Council members Barrett, Painter, Thomas, Anglesby, Zman — yes). - Ordinance 560 (FY2027 budget, as amended): adopted. Amendments included $10,000 for lamp-post replacements and addition of a $240,000 community parks and playgrounds grant. Vote: unanimous (same roll-call). - Resolution 202602 (8% water-rate increase): adopted. Vote: unanimous. - Resolution 20264 (2024 water-resources element): adopted. Vote: unanimous. - Resolution 20263 (charter amendment re: uncontested elections, amended): adopted. Vote: unanimous.

For more: The town’s FY2027 budget and the 2025 Annual Water Quality Report are posted at hamsteadmd.gov (water reports page).