ELK RIDGE — For the first time in eight years, Elk Ridge residents can expect a property-tax increase.

The City Council on Tuesday decided by consensus to hold a truth-in-taxation hearing in early August to decide the new tax rate.

The bedroom community has little else to draw on for revenue to run City Hall, officials said. It has little in its own sales-tax revenue and received less than the $235,000 expected from the state a year ago. As the recession wore on, those expectations were trimmed to $175,000, but most recent projections show the city ending the year with about $206,000 in sales-tax revenue from the state, city recorder Jan Davis said.

The city's annual property-tax collections now is about $210,000; expectations for next year are not yet known.

"We don't want a steep increase," Councilman Raymond Brown said. "We've got to ease into this thing."

Ten percent of the city's property owners failed to pay their property taxes this year, a higher delinquency rate than the county, Brown said.

The City Council considered raising property taxes last year, averaging $26 per house, but that was defeated. Councilman Nelson Abbott said he voted against it because the certified tax rate from the county was an increase, the first in years.

The City Council also is looking at changing the way the city charges for water. It discussed charging a lower base rate, now at $40 a month, but not including any water with that fee. The council instead considered a $25 monthly base rate with separate rates for water based on usage.

That has the potential of soaking high water users while giving low water users a break. The break-even point will be about 8,000 gallons a month, Davis said. For 206 households, less than half the city, the average usage is 7,000 gallons a month, with the highest water user taking 113,000 gallons, she said.

A $25 base rate would raise $14,625 a month for the city, which has a water-budget cushion of $18,000, considered "a hiccup" in a city budget. Changing the way the city charges for water could plug a cash leak; right now the water fund isn't paying its way, Davis said.

"If cushion goes down too low, than the state mandates we raise rates," she said.

The city is just finishing the installation of a system that would allow it to read water meters year-round. Winter charges now are based on estimates. By January, the new high-tech system will be finished, and the council can consider changing how it charges for water.

E-mail: rodger@desnews.com