Town manager presents $5.6 million FY2026–27 budget proposal, holds tax rate steady

The Spencer Town manager presented the recommended fiscal year 2026–27 budget to the board, proposing a $5.6 million plan that would keep the property tax rate unchanged at 63.05 cents per $100 of assessed valuation while phasing in remaining salary-study commitments and funding limited capital replacements.

In an overview of the proposal, the manager said the recommended budget includes about $5.3 million in the general fund, roughly $228,000 in the POW bill fund, and $67,366 in the capital reserve and replacement fund. He framed the meeting as the formal presentation step required by state law and said the board would have time to consider and amend the plan before adoption in June.

Heather Tan, the town’s finance officer, reviewed revenue assumptions that underpin the proposal. She said estimated real property valuations for FY27 are about $310 million (up from roughly $306 million in the most recent TR‑2 report) and that the town projects a 98% property‑tax collection rate. Tan said the budget uses a conservative 2% increase for sales and use tax receipts (the state’s estimate was 3%) and anticipates modest increases in vehicle tax receipts and interest income.

On the expenditure side, the manager said the budget aligns with the town’s strategic priorities — staff excellence, outreach, infrastructure and properties, public safety, and community planning and development — but stressed the plan is intentionally lean. He called out annual debt service of $223,661 (equivalent to about 5.6 cents of the tax rate) as a fixed obligation that constrains available discretionary funds.

The recommended budget continues the town’s commitment to implementing the market salary study: he said the current year funded about 60% of that study and FY27 would absorb the remaining roughly 40% of the commitment. The town is also recommending continuation of the developmental increase program and a one‑time holiday lump sum of $500 for full‑time staff and $250 for part‑time staff.

Health benefits and retirement costs are significant drivers in the proposal. The manager said the town’s grandfathered pre‑ACA health plan will no longer be available; the draft includes an estimated 18% increase in health insurance premiums for the town’s share (about $35,000 for the final seven months of FY27), with exact renewal figures expected closer to fall. He also said employer contribution rates for the Local Government Employees’ Retirement System are scheduled to increase, with estimates of about 15.1% for general staff and 17.1% for law enforcement in the coming year.

Staffing changes were described for public safety and public works. To provide 24/7 patrol supervision the manager recommended reclassifying a vacant lieutenant and two officer positions into sergeant roles, with hires phased in between July and January and offset by freezes of other vacant positions. For the fire department, the recommendation includes converting a part‑time deputy chief to a 30‑hour role to reduce overtime and regularize administrative time. Public works would move from a mechanic job share to one 30‑hour position plus a 15‑hour part‑time mechanic, with a separate vacant public‑works position frozen until January 2027 to offset costs.

Board members questioned timing for police hiring, the effect of frozen positions on holiday operations and solid‑waste back‑door service for seniors. Joel (public works staff) said the town provides back‑door collection for about 30 customers (roughly five to six per weekday) and staff indicated the service would continue though some routes may run more slowly; the manager said coordination with code enforcement and communication to residents would continue.

The manager said operational fuel and utility cost increases were budgeted (an 8% fuel increase for fire and 5% for public works, and roughly an 11% average increase in utilities across departments) and described a strategy for street maintenance: rather than large resurfacing projects, the town will bid targeted resurfacing and patching to stretch available POW bill funds, noting that North Carolina Department of Transportation paving of several state streets will also ease local needs.

The manager said the budget is balanced in part with planned use of fund balance (about $455,000 total across funds, with $67,000 covering capital requests) but emphasized the plan remains cautious to avoid a tax-rate increase. He invited public input: a public hearing is scheduled for 5:30 p.m. Thursday, June 4, and the board is expected to consider adoption at its June 9 meeting or at a later June workshop.

The board approved a motion to enter executive session to discuss economic development negotiations; any action approving contracts or incentives will be taken in open session following deliberation.

Ending: The presentation was received for review and public discussion; the board will consider final action following the June public hearing and subsequent meeting(s).