After taking his first look at the Town of Blacksburg’s proposed budget for the 2011 fiscal year, Mayor David Hogue was quite impressed.

“Without a doubt, this is one of the best feelings I’ve had about a budget in a long time,” he said.

Expected to receive $2.5 million from the sale of the town’s gas company to the York County Natural Gas Authority, Blacksburg Town Council members backed an idea by the municipality’s administrator Trudy Martin at last Tuesday’s meeting to use the money to pay off the remaining balance of a 40-year loan for sewer construction.

“I just feel that it is best for us to pay off the sewer bonds acquired in 1999,” Martin said during the meeting. “It’s the best use of money in being fair to the town’s citizens. ... This will free us from a $140,000 annual payment and we’ll be out of debt. Plus, the town would save $178,000 long-term with the early payoff.”

For the past two years, Blacksburg town officials were in negotiations to sell its gas company to York County Natural Gas. The two parties came to an agreement for the York County gas supplier to acquire the company for $2.5 million in 2008.

After dealing with hurdles including a lawsuit and playing the waiting game while members of the S.C. General Assembly looked over the contract, the sale was given the green light by state legislators earlier this year. Money from the York County Natural Gas Authority is expected to arrive in the town’s bank account April 1, which just so happens to be the first day of Blacksburg’s fiscal year.

After paying off the sewer bonds, the town will have an estimated $300,000 left to invest in other areas as needed.

According to this year’s proposed budget, Blacksburg is expected to spend just over $2.9 million, more than $1.2 million less than the municipality was slated to spend during the 2010 fiscal year.

The municipality is expecting nearly $1.6 million in revenue for the 2011 fiscal year, more than $39,000 higher than last year’s amount. Town officials are predicting a vast drop in water revenue, however, budgeting just over $1.3 million in that area, nearly $109,000 less than the previous year.

Another difference will be seen by town residents, who will not see a hike in water and sewer rates for the first time in a few years. In addition, Blacksburg’s millage rate dropped from 156.20 mills to 148.82 mills, or $1.48 per $1,000 of assessed property, according to the proposed budget.

“The millage rate will decrease with the elimination of the town’s gas operation and removing a 2008 surcharge from taxes according to state law,” Martin said. “It may not be a big drop percentage-wise but it’s a decrease nevertheless, which is always good.”

Aside from the municipality getting out of the red, Hogue said the best part about the spending proposal is that it rewards the work done by the town’s employees, who are due to receive a 5 percent raise as part of the proposed budget.

“The town’s employees have not received a raise in three years, but we hope this helps,“ Hogue said. “They have been more than considerate and continue to work hard; we’re apologetic that we couldn’t do this before now.”

Town council unanimously approved first reading of the budget, with a final reading expected to take place at a specially called meeting March 30.