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Mebane manager outlines FY27 budget with proposed 2¢ tax increase, hires and utility rate proposal
Summary
City Manager Richard White presented the FY27 budget showing a projected $36.5M in revenues (including a proposed 2¢ tax increase generating about $1.1M), proposed expenditures of about $46.8M, nine proposed general-fund positions, and a finance recommendation from STANTEC for ~10.5% water/sewer rate increases.
City Manager Richard White presented the City of Mebane’s proposed FY27 budget during a special work session on April 9, telling council the package was built around a proposed 2¢ property tax increase and several capital priorities, including replacement apparatus and a design placeholder for Fire Station 4.
White said staff prepared the FY27 budget assuming a 2¢ tax increase that would generate roughly $1.1 million and described FY27 expenditures at approximately $46.8 million. That gap was to be bridged with a combination of issuing debt (about $6.9 million), a $1.5 million transfer from the general capital reserve fund, and appropriating about $1.8 million from fund balance under the scenario presented. White also noted the legislature is considering a proposed constitutional amendment that could cap local property-tax rate increases; staff will monitor the House Select Committee process.
The proposed capital budget includes a $6 million design placeholder for Fire Station 4 and a $1.5 million equipment share. Staff also recommended replacing one soccer field at an estimated $750,000. White listed nine proposed general-fund positions totaling roughly $1.1 million (three firefighters, IT position funded by reallocating Comtech contract funds, building code inspector funded via inspection revenues, two stormwater positions, HR analyst and a maintenance technician).
On utilities, staff presented an updated STANTEC study that suggested a roughly 10.5% increase in water and sewer rates; White said the utility-fund gap before transfers was around $4.2 million and that a combination of transfers and rate adjustments would be necessary to balance that fund.
Finance director Daphna walked council through three financing scenarios that trade capital-reserve transfers against debt issuance for Fire Station 4. Her analysis showed lifetime interest differences between the scenarios (in some comparisons staff estimated roughly $900,000 in lifetime interest savings by using reserves in a blended scenario versus all-in debt). Councilors asked for more detailed debt-service schedules and requested those be available ahead of the next work session scheduled for May 13.
Council discussion touched on the timing of capital projects and the accounting treatment of construction costs (projects must be budgeted in full the year they begin even though debt-service flows over subsequent years). Councilors asked for printed/digital copies of the scenario spreadsheets and for clearer debt-service schedules before the next meeting. White said he would provide those materials and that the manager’s recommended budget will be presented May 4, with adoption scheduled for June 2.
The work session concluded after the council took votes on parkland purchases and directed staff to prepare required budget amendments and debt schedules.
