Kenly council reviews balanced FY2026 budget, approves a budget amendment to fund pay increases

Interim Town Manager Tony Sears presented the Town of Kenly’s proposed fiscal year 2025–26 budget as balanced and compliant with the North Carolina Local Government Budget and Fiscal Control Act, noting a recommended tax rate of $0.64 and projected general fund revenue increases.

Sears said the $0.64 rate reflects new property valuations and a 98% collection assumption; at that rate the town projects roughly $1,442,833 in ad valorem revenue, compared with $1,092,949 under FY2025’s $0.69 rate. He also said the revenue-neutral rate to preserve FY25 revenue would be $0.50 and that each penny in the rate generates about $18,500.

Police Chief James Ayers emphasized staffing concerns and urged compensation increases to retain trained officers, saying losing officers “after investing in their training and equipment results in financial loss” and reduces continuity with the community. The budget discussion noted a proposed 18% increase for officers in one scenario and a separate amendment proposal later described a 21% increase for police and up to 15% for other employees to improve competitiveness with neighboring municipalities.

The budget narrative included projected increases in state-collected revenues (franchise, electric, sales tax and recreation fees), a 10% increase in group insurance premiums, a 1% increase in state retirement contribution, an annual $60,000 IT contract for modernization and security, and a $30,000 part-time administrative support position shared between the general fund and the water/sewer fund. Managers also reported $21,000 carried forward for Parks & Recreation master-plan work in pursuit of a grant.

Council discussed trade-offs to fund higher raises, including a possible tax-rate adjustment to $0.65. Financial summaries presented in the meeting noted the general fund was about 86% spent with revenue collection near 99% (expected to rise after quarterly sales tax receipts), and that water and sewer expenditures were running about 78–79% spent. Speakers also referenced major capital work underway, including wastewater plant investments and sewer-line rehabilitation projects funded in part with ARPA dollars.

The council voted to accept a budget amendment intended to align appropriations with operational needs and to accommodate personnel increases; the recorded vote was 3–1. The amendment included line-item adjustments such as a $60,000 increase to the general fund for unexpected employee payments and a $35,000 increase for the fire department to cover a previous shortfall, offset in part by reductions elsewhere.