Cary council weighs midyear cuts, festival support and using reserves to blunt tax increases

Cary — Council members continued a line-by-line review of the town’s FY2027 recommended budget on May 26, focusing on possible midyear operating cuts, capital deferrals and whether to use projected fund balance to ease a steep tax-rate increase.

Stacy, a town presenter, told the council staff had previously pared the FY2026 request by $27.8 million and said subsequent reviews eliminated positions and identified further operating and capital reductions. "That work temporarily for one year eliminated 29 positions," Stacy said, and staff later identified roughly $8 million in operating cuts and about $53.3 million in capital reductions under consideration.

The meeting highlighted a recent drop in assessed valuation in the Wake County portion of Cary: "that value decreased by about $200 million," Stacy said, attributing most of the decline to owners taking advantage of charitable-housing exemptions and related legal developments. Staff said the overall town assessed value remains higher than the prior official year because increases in other counties offset the Wake County decline, but they lacked a full property-by-property breakdown and urged the council to request more detailed county data.

Council members spent substantial time reviewing a non-recommended list of operating cuts staff provided as options. The list included a $375,000 line tied to the Chamber of Commerce contract and roughly $185,000 in direct cash festival payments for a small number of events. Staff characterized the items on the slide as "choices that could be made" but said they did not recommend them; canceling the Chamber contract, staff warned, would change the town’s relationship with an economic-development partner.

Members also debated the town’s indirect festival costs — the police, fire and EMS staffing the events. Several council members proposed setting uniform expectations for festivals, charging for certain public-safety coverage or trimming support across the board rather than making ad hoc cuts to individual events. A staff member said the manager’s office manages an enterprise contract with an outside vendor (Digital P) that produces town videos and runs the council meeting broadcast; councilors asked for a cost comparison showing what it would take to bring work in-house.

On capital, staff presented about $10.576 million of general-fund-supported projects (a subset of larger transfers) and cautioned that delaying or removing projects would reduce pressure on the tax rate. Staff also reminded councilors that housing-related capital items the council had previously directed remain part of the recommended budget and were flagged as not recommended for removal.

The council discussed fund balance and tradeoffs between using projected reserves and preserving ratings or policy buffers. Staff said projections are not final and that tapping reserves is a judgment about risk tolerance that can affect bond ratings and other measures; as an example, staff estimated using $10.8 million of reserves could reduce the tax-rate impact by roughly two cents. Several members asked for a dedicated session on fund balance and for budget pages that show deltas and line-item drivers so they can see why some departments show large percentage increases.

Next steps included staff returning with more granular festival cost data, a breakdown of the marketing/manager’s-office budget and a comparison of contracted video/website costs versus potential in-house alternatives. The council agreed to pick up unresolved items at a follow-up work session this week.

The meeting concluded with a procedural correction on auditor selection; the council then voted to enter closed session to consult with town attorneys and discuss personnel and privileged matters.