Kenly council approves budget amendment to boost pay and weighs FY26 tax options

The Kenly Town Council on July 14 approved a budget amendment to provide higher pay for town employees and heard a presentation on the proposed FY2026 municipal budget.

Interim Town Manager Tony Sears presented the FY26 budget as balanced and compliant with the North Carolina Local Government Budget and Fiscal Control Act, citing a proposed tax rate of $0.64 that the town estimates would generate about $1,442,833 based on new property valuations and a 98% collection rate. Sears said the revenue-neutral rate would be $0.50 and that each penny of tax rate generates roughly $18,500.

The budget presentation included recommended salary increases and other cost pressures: an initial proposal cited an 18% pay increase for police officers and a 12% increase for other employees, a 10% rise in group insurance costs, a 1% increase in state retirement contributions, a proposed $60,000 annual IT contract, and a $21,000 allocation to Parks and Recreation for master-plan work to support future grant applications. The police department emphasized retention concerns; Police Chief James Ayers told the council that while the department recommended a 21% increase, an 18% proposal had been discussed. "Losing officers after investing in their training and equipment results in financial loss," Ayers said, arguing higher pay helps retain officers and preserves community relationships.

During new-business discussion, council members debated a budget amendment that included higher compensation levels (council discussion referenced up to 21% for police and 15% for other employees) and funding offsets, including a suggested tax-rate adjustment from $0.64 to $0.65 to help finance the increases. Council also reviewed utility and capital expenses, noting over $1 million in wastewater-plant work and $6 million in sewer-line improvements; staff reported that Johnston County increased purchased-water costs by $0.35 per 1,000 gallons, which factored into recommended rate changes.

The council voted to accept the FY2025 budget amendment. Motion by Council Member Keith Davis, second by Council Member Beverly Knight; vote recorded as 3–1. The amendment will require staff follow-up to finalize line-item adjustments and to implement any approved pay changes.

Next steps: staff will update budget documents to reflect the amendment, bring specific salary schedules and any proposed tax-rate modifications back to council for final adoption, and incorporate the water-rate and fee changes into upcoming ordinances as needed.