Clayton council hears manager's $62.5M budget proposal, continues public hearing after residents object to water rate increases

The Clayton Town Council on May 18 heard the manager's recommended fiscal-year 2026-27 budget and took public comment before voting to keep the budget public hearing open for further input.

Budget Manager Todd Melton presented the recommended package, saying, "The budget is balanced across all three funds," and outlining major figures: a $62.5 million general fund, a $54.3 million water and sewer fund, and a $23.5 million electric fund. The recommendation included $4.7 million committed for capital improvements (which draws on $2 million previously approved), the appropriation of $1.767 million of fund balance to cover the first debt payment on a limited obligation bond, a 3% cost-of-living adjustment for staff and elected officials, and recommended additions of 18 full-time equivalent positions (16 in the general fund, one in each enterprise fund).

Melton also described proposed utility adjustments: a combined 8.3% revenue increase in water and sewer (to offset a reported 10.1% bulk water purchase increase from Johnston County), a 2.5% average increase across electric rates, and a $2-per-month increase to solid waste service (to $26). He explained that support services charges applied this year make some departmental budgets appear larger and that the town is building reserves to pay for anticipated large capital projects, including water-supply work.

Why it matters: the budget proposes no property tax rate increase but shifts more of the town's cost-recovery to utility rates and fees; changes would affect households differently depending on usage and whether residents are served by enterprise funds.

Residents pressed the council on affordability and water quality during the public hearing. One commenter said, "When I moved to the town of Clayton, my water bill averaged about $75 a month ... now my average bill is $95 a month," and added that the water's chlorine taste had required extra filtering or bottled water purchases. Another resident said their recent total utility bill was $634 and that a $234 sewage charge was a burden for seniors and families on fixed incomes.

Council members and staff responded with technical and policy context: staff noted statutory posting and inspection requirements for the budget, explained that the county purchases bulk water (and that the county's purchase price affects local rates), and described a seasonal disinfection process the county conducts that can alter taste for roughly a 45-day period. Council members emphasized that enterprise funds (water/sewer and electric) are generally required to be self-supporting and that retained margins may be used for long-term planning and impending capital expenses.

After hearing public input, Council Member Porter Casey asked that the public hearing remain open to allow more residents to comment. The council agreed to continue the budget public hearing to the next council meeting and asked staff to notify the public via the town's budget engagement page and social media. Staff reiterated the next steps: an ordinance and vote are expected June 1, but the council will accept additional public comment before final action.

What's next: the council left the public hearing open and directed staff to advertise opportunities for further public comment; the manager's recommended budget and supporting documents remain available at townofclaytonnc.org/budget for review.