HERMON – Town councilors have set May 19 for a public discussion of the town’s proposed $12.7 million budget that formally will go before voters in June at the annual town meeting.

The overall figure includes a municipal budget of $2.8 million and a school budget of $9.9 million. The total amount proposed to be raised by taxes is $4.7 million, an increase of nearly $500,000 or 11.6 percent, from this year’s local tax amount.

The mill rate is expected to increase to 16.9 mills, up from this year’s mill rate of 15.25, although not much higher than the 16.65 mills it had been last year. Town Manager Clint Deschene said the council is discussing a proposal to level the mill rate at 17 mills.

Much of next year’s increase comes from two proposed bond issues, a $3.75 million bond for renovations at the middle school and $950,000 for a new fire station. The bonds, if approved at the town meeting, would be paid over a 20- or 30-year period. An annual debt service payment on both bonds would start at about $371,500, although the payments would go down over the course of the issue of the bonds.

Deschene said that he understands that there’s a tax consequence with the projects, but he said that in town there is a “strong current that says these projects need to be done.”

A townwide survey conducted this spring showed that more than half of those surveyed supported building a new fire station, although because of a glitch, results on the school renovations were not considered in the survey results.

Deschene said the school project will consider improving the school, tearing down the gym and adding a gymnasium-cafeteria and adding classrooms. Councilors and members of the town’s building committee have raised concerns about the conditions at the school and the need to upgrade to current standards.

Deschene said that the bond costs for both projects are a worst-case scenario and that if both projects are approved, it would be possible to reduce the overall debt to about $4 million, a savings that won’t affect next year’s tax rate, but would reduce substantially costs overall. The town could use existing reserve accounts toward the project and delay the first debt service payment a year to reduce the cost of the project. The town also could switch from a 30-year borrowing term to 20 years to save money.

The town meeting is scheduled for June 8.

In other action at Wednesday’s Town Council meeting, councilors awarded a road contract to Lane Construction, whose bid of $94,038.75 beat out the bid from Vaughn Thibodeau and Sons by only $62.48.

The bid was for four projects that range from overlaying to the more complex road reclamation, which Deschene described as being short of a total reconstruction of the roads. The four roads involved are Wheeler, George and Fuller roads and School House Lane.