NEWPORT CITY – The city council Monday approved the 2012-2013 residential municipal tax rate with a three-cent per $100 of assessed value increase. At the same time, the city school has a three-cent decrease, with a final rate of 2.6826 cents, combined educational and residential.Last year’s residential rate, with the education rate, was 2.6814. This year’s non-residential tax rate is 2.8530. Last year’s rate was 2.8802.Initially, city officials thought there would be no municipal tax increase, but then realized they used the wrong grand list and did not take veterans' exemptions into account when they worked on the tax rate.City Clerk and Treasurer James Johnson told the council it had to vote on the proposed budget Monday, because he had paperwork to file with the state tax department.Mayor Paul Monette was not particularly happy with the increase. He said he has a hard enough time presenting a budget with a grand list based upon a level funded rate, but now there is an increase.The city has enough money to cover the difference in the reserved budget, City Manager John Ward Jr. told the council. He also said there is no change in the expense budget. “The estimated tax revenue is less because of the grand list being wrong,” said Monette.Keeping it the way it was presented is the right way to go, Alderman Richard Baraw said.Taxpayers should see just a small miniscule increase in their municipal tax rate, Monette said.The council also approved sewage allocation to Robert Miller who owns the Highland Avenue Professional Building, also known as the former Orleans County Hospital. Miller has plans to convert the office building into residential housing. Miller asked for 15,187 gallons of water per day and 12,740 gallons of sewer per day. When complete, the building will have 31 one-bedroom units and 46 two-bedroom units.Miller still needs to get a permit from the Development Review Board.Nobody at the meeting knew if Miller plans to make the apartments low, medium or high-income units. Ward explained another body other than the council would be concerned with that.