Roanoke Rapids, N.C. — The City Council on Wednesday approved a five-cent increase to the local tax rate, in part because of financial difficulties at a music theater formerly operated by country music singer Randy Parton.

The local tax rate is set at 62.4 cents per $100 assessed value, and the increase will cost the owner of a $100,000 an extra $50 a year.

City Manager Phyllis Lee said the increase would help pay for a 3 percent cost-of-living raise for city employees, but she acknowledged that financial difficulties at the Roanoke Rapids Theatre made the increase necessary.

Since the theater opened, the city has spent about $739,000 more than the facility has brought in, officials said.

Part of the city's loss comes from a $547,000 buyout of Parton's contract. The theater's former namesake was hired in 2005 to help jump-start the $21.5 million, 1,500-seat entertainment complex along Interstate 95.

Lower-than-projected attendance and revenue, as well as controversies over spending, ultimately led to the city's ending its relationship with Parton in January.

The management company brought in after Parton also terminated its contract with the city in February, claiming the city owed the firm more than $100,000.

Last month, city officials announced Gilmore Entertainment of Myrtle Beach, S.C., would run the theater and produce its shows.