WATERBURY — The town is seeking to avoid a possible 4-cent tax rate increase for its 2013 budget as it tries to fully fund its paving fund, which was underfunded in 2012 due to Tropical Storm Irene.

At Monday night’s Select Board meeting, Municipal Manager Bill Shepeluk suggested about $600,000 for three highway-related funds. For 2012, the funds had $285,000 from the town’s operating budget and $93,000 transferred from an old highway fund.

But Select Board members said a 4-cent tax rate increase to 39 cents per $100 of assessed property value was too high. The board suggested it may be OK with proposing a 1-cent tax rate increase to voters at Town Meeting Day.

The $600,000 would include some extra money for culverts and bridges, but that total could decline to $540,000 as the town continues to work on the draft budget. Many of the bridge projects are tied to federal funds.

Because of positive fund balances, the town could use money from other highway funds, called Capital Investment Plan, or CIP, funds, to balance a negative paving CIP fund for 2013.

The town could use up to $100,000 from a tax stabilization fund to help deal with the issue.

In other news from Monday night’s board meeting:

— Frank Sanborn was cited by Waterbury’s zoning administrator for allegedly running an illegal junkyard on Little River Road. Under a local ordinance, a property can have only one unregistered or uninspected vehicle visible.

The town sent a notice Jan. 15, giving Sanborn seven days to comply. On Monday, the Select Board approved attorney expenses if needed.

— Gravel road projects for 2013 might be only in the $50,000 spending range, a significant drop from the $100,000 initially expected.