Waynesville staff present FY2025-26 budget; recommend 10% sewer rate increase, public hearing set for May 27

Town of Waynesville staff presented the proposed municipal operating and capital budget for fiscal year 2025-26 and recommended a 10% increase to the sewer rate to cover the town's planned debt service on a new wastewater treatment plant.

"This is the moment we always look forward to every year. In accordance with the provisions of the North Carolina general statute, your staff presents the proposed municipal operating and capital budget for fiscal year 2025-26," Rob (staff member) said as he opened the budget presentation. Ian (staff member) walked the council through the revenue and expenditure details.

The staff packet recommends a combined town budget of $40,144,415 for FY2025-26. Staff told the council that overall revenue growth is constrained: a state moratorium on new connections to the sewer system has limited growth of the tax base, sales tax growth has slowed, and the county postponed a property revaluation after hurricane damage. The presentation said the town does not project appreciable revenue increases and is therefore limiting new spending to critical needs.

To meet required debt service and system needs, staff recommended a 10% sewer rate increase. "We are recommending a 10% increase in our sewer rate this year," Ian said. The presentation showed projected sewer customer charges at $4,718,250 and noted that the sewer fund will begin its first year of payments on a new treatment plant, with an estimated payment of $1,202,295 for the year. Staff also proposed $100,000 in sewer capital outlay for the coming year.

On the general fund side, the presentation listed personnel and fringe as the largest expense and identified a state-required 1 percentage-point increase in the town's contribution to the Local Government Retirement System, an item staff said would cost about $148,302 to the general fund. Liability insurance was projected to rise substantially (staff cited a 50% increase in a property/liability quote tied to losses from Hurricane Helene). To address workforce retention, the budget funds a 2.5% career-track increase and a 1% cost-of-living adjustment, and fully funds certain reclassifications and benefit contributions.

Staff recommended minimal capital spending, citing constrained revenues. Examples presented included a proposed $250,000 roof replacement for the public works building and a $200,000+ motor for cemetery equipment (figures taken from the staff presentation). Staff said the general fund is estimated to increase by $878,084, or about 4.5% compared with the prior year, after proposed adjustments.

Council member Joe moved that the council accept the budget proposal for information and set a public hearing on the proposed budget for May 27 at 6 p.m. at the next regular meeting; the motion was seconded and approved by voice vote. Council members discussed reserving additional time at the May 27 meeting for a budget workshop should more review be necessary before final action in June.

The council was told a more detailed presentation will accompany the formal budget packet and the public hearing notice; staff will distribute budget documents electronically to council members prior to the hearing.

Questions and clarifications during the presentation included how shared staff costs (finance, HR) are allocated across funds and which capital items were being deferred. Staff said charges for shared services are allocated to the enterprise funds where staff time is used.

The presentation and council action recorded in the meeting packet are informational at this stage; the council set the public hearing for May 27 to allow public comment before any final adoption vote.