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Mebane council approves FY27 budget with no tax increase, directs five-year plan
Summary
After a lengthy public hearing and debate, the Mebane City Council voted to approve the FY27 budget without a tax increase, using additional fund balance to cover the removed penny and directing staff to produce a five‑year plan for capital needs including the next fire station.
After a public hearing on the proposed FY27 budget, the Mebane City Council on a voice vote approved a budget that keeps the city's tax rate unchanged and increases the one-time fund balance transfer to cover the revenue otherwise raised by a 1¢ tax bump.
City Manager Richard White presented the budget, describing $46.5 million in recommended operating expenses, $18 million in utility fund expenditures and $327,400 in occupancy-tax special revenue for a proposed total of roughly $65 million. White also outlined a scenario that would have increased the property tax rate by two cents, with one cent directed to the capital reserve fund and one cent to general-fund debt for a planned fire station.
Councilman White (Councilman White) led debate in favor of deferring a tax increase, saying the council should prioritize starting the new fire station while giving residents one year's notice if a future increase is necessary. "I came to the conclusion that getting the fire station started is an absolute priority," he said, urging staff to prepare a five-year plan for the council and residents.
Other council members pressed for more savings in the capital reserve fund. One councilor said the capital reserve's value has been shown this year and urged restoring 3¢ to it to avoid higher financing costs on future big-ticket projects. Councilors also discussed employee compensation changes included in the budget: a 3% cost-of-living adjustment, health-insurance increases of roughly 6%, and recommended salary adjustments for the mayor and council members totaling about $6,850 annually.
The council passed a motion to adopt the budget with no tax increase and to increase the fund-balance transfer to compensate for the removed penny (the motion referenced an approximate $580,000 transfer). The council separately adopted the fee schedule, the 2027–2031 capital-improvement plan and the position classification and pay plan as presented.
The council directed staff to prepare a five-year capital and staffing plan outlining when future tax increases might be needed and what they would fund. The adopted FY27 budget will be administered under staff's direction while the council receives the requested long-range plan.
