Clayton holds second public hearing on $67.2 million FY26 budget; staff proposes utility rate increases as Sam’s Branch plant comes online

Clayton town staff presented the manager's recommended fiscal year 2026 budget at a second public hearing, outlining a $67.2 million general fund and proposed utility rate increases to offset rising wholesale costs and new debt service from the Sam's Branch water reclamation facility.

The budget presentation, delivered to Mayor Jody McLeod and the Clayton Town Council by Todd Milton and Town Manager Rich Coppola, included a proposal to set the town tax rate at $0.49 per $100 of assessed value, which Coppola described as "49¢ which is just 4¢ over our revenue neutral rate." Milton told the council that Johnston County has raised wholesale water and sewer bulk rates by 10% and that the town's recommended combined water and sewer rate increase "is just above that 10%." He also said the town is recommending a 2% electric rate increase while wholesale electric costs are projected to rise about 3.5%.

The presentation tied utility rate pressures to costs the town buys and resells and to new financing for the Sam's Branch facility. In a public-facing informational segment earlier in the meeting, staff described the Sam's Branch water reclamation facility as "scheduled to go online in early 2026" with capacity "to treat up to 6,000,000 gallons of wastewater per day." Council discussion and budget slides showed the water and sewer fund is balanced at $48.3 million and includes a projected $9.7 million debt-service increase tied to Sam's Branch construction financing.

Why it matters: Milton and Coppola said the proposed rate changes and tax rate are needed to maintain service levels amid growth, higher wholesale utility costs, rising personnel expenses and the town's capital commitments. Coppola told council the recommended tax rate and utility rates are part of a conservative baseline budget meant to avoid unsustainable fund-balance appropriations.

Details from the budget presentation: the general fund budget is balanced at $67.2 million with capital outlay just under $18.0 million, including a $7.5 million land-banking line item for economic development. The town recommends a combined water and sewer rate increase of about 10.2% (presented as 6% on water and 12.5% on sewer) to reflect a 10% county bulk-rate increase. The electric fund proposal is balanced at $25.7 million with a recommended 2% retail rate increase and projected wholesale power cost growth of 3.5%.

Staff also said the budget includes a 2% cost-of-living adjustment and a 5% merit/salary pool for employees, an assumed 10% employer contribution increase for the state health plan, and the addition of seven new positions across funds (four in general fund, three in enterprise funds) at an estimated $700,000 total.

Council process and next steps: After the presentation and a period for council questions, Mayor Jody McLeod closed the second public hearing, noting there were no members of the public who wished to speak. The council did not take a final vote on the budget at the meeting; staff said the comprehensive fee list and final budget are scheduled for adoption at the June 16 meeting to meet public-notice requirements for utility rate changes.

Discussion vs. decision: Council discussion included questions about equipment line items, the $7.5 million land-acquisition placeholder (intended to provide flexibility to acquire property via debt or fund balance later), and the proportion of salaries and benefits in the budget. Staff characterized the CIP and budget as "living documents" that will be adjusted as grants or partnership opportunities arise. The formal action recorded at the meeting was to close the public hearing and continue the matter to the June 16 meeting for final consideration; no budget ordinance was adopted at this meeting.

Remaining open items and follow-up: staff said the county tax rate remained undecided at the time of the presentation and that the town's revenue-neutral rate had been calculated at $0.45 per $100 of value. Milton said the town is tracking an ongoing property valuation appeal ($379 million in value still under appeal) and has adjusted assumptions conservatively to reflect that uncertainty.

Ending: The council left the record open for additional citizen input and scheduled final action on the FY26 budget, comprehensive fees and the electric rate at the June 16 meeting.