-
(ARCHIVE PHOTO | THE GRAHAM LEADER) Mayor Alex Heartfield, at right, speaks at a budget workshop Thursday, Feb. 13. The Graham City Council were presented budget data Thursday, April 10 by City Manager Eric Garretty. The council will meet Thursday, April 24 and establish a budget planning calendar.
Planning for the upcoming Fiscal Year 2025-2026 budget is underway with the city of Graham as proposed increases in the property rates, water rates and sewer rates are under consideration.
City Manager Eric Garretty presented budget data to the Graham City Council during their meeting Thursday, April 10 as part of the budget development process.
The city manager said no final decisions have been made on the budget and the numbers he proposed will vary as the budget planning process continues.
“(I have) proposed a 6% increase in the property tax rate and a 7% increase in water and sewer rates,” Garretty said. “These increases are needed to balance the budget at current levels of service. However, the city manager only proposes the rates. The city council will ultimately set the final property tax rate and water and sewer rates.”
The proposed budget includes a cost of living adjustment for employees from 1.5% to 3.5% in an effort to retain employees competitively.
The city’s current adopted tax rate is $0.655 per $100 valuation and the city manager proposed it be raised four cents to $0.695 per $100 valuation.
Under the new proposed tax rate from the city manager and an estimated collection rate of 97%, he is estimating the city will bring in revenue of $3,938,996 in property taxes, a 9% increase over the $3,600,000 forecast for the current fiscal year.
A 7% increase in the water rate is still estimated to put the water fund $200,000 short due to a decrease in consumption.
“What we’re wondering is, with the rate hike, are folks much more sensitive to how much water they’re using? Are we seeing a decrease in volume? That’s good on the water conservation side and good on the lake side, but we have to come up with a revenue number to support the system,” Garretty said.
The city manager said the increase in water rates is needed to maintain the system even if the consumption remains the same and is following the water rate study conducted for the city.
“My concern is, if that decrease in consumption continues, if it does really exist, ...if there’s pressures on the revenue side, then we’re going to have to look at something different, either major cuts on the expense side, or we will probably look at another 7-8% increase for it FY 27,” Garretty said. “The cost of providing water continues to go up, and that’s not something that’s within the city’s control.”
One of the biggest changes in the city manager’s budget was a 22% drop in the street department which was reduced to $750,000 for street repair and $50,000 for curb and gutter repairs.
“I’m hoping as I work through the budget, we can put some more toward it, but in balancing up at this tax rate, that was kind of the last place I could go to,” Garretty said. “It’s still at the level that we’ve been spending (of $700,000-750,000).”
Sales taxes have been another point of consideration for the city council with the city manager estimated a drop.
“Based on the numbers that I’m seeing, I think we’re going to collect at least $2.9 million in sales tax this year,” Garretty said. “I’m going to say the same thing for next year, unless we see something between now and budget adoption that makes us think that we’re not going to be able to make that or the number will be higher.”
The budget does not factor in multiple pending budget requests from departments across the city such as new patrol vehicles, body cameras and video surveillance cameras for Graham Police Department, setting aside to continue to build a general fund reserve, proposed increases in ambulance services and more.
The city manager will provide a Fiscal Year 2024-2025 financial forecast during the city council meeting scheduled for 8:30 a.m. Thursday, April 24.
During that meeting the council will also consider setting a second budget workshop and approve a calendar for the budget development process.
“The public is welcome to attend this (budget) workshop,” Garretty said. “In addition, during the summer, the council will hold formal public hearings on the budget and the property tax rate. The public is encouraged to attend these public hearings and provide comments to the council on the proposed budget and tax rate.”
The city council must adopt a new fiscal year budget and tax rate no later than Tuesday, Sept. 30.
