City hosting first budget planning meeting Thursday

The public has their first opportunity to be a part of the budget planning process for the city of Graham during a workshop being held Thursday.

The budget workshop will be held at 5:30 p.m. Thursday, Feb. 13 at 608 Elm St. in Graham. 

During the meeting, City Manager Eric Garretty will provide a presentation on the draft fiscal year 2026 budget and discuss key budget issues. 

Issues include sales tax decline, cost of living adjustments, vehicle replacements, cash for capital improvements, debt for the sewer plant rehabilitation, general fund reserves, water and sewer rate scenarios, tax rate scenarios and other issues.

The city of Graham imposes a 1.5% rate on sales tax, which is placed in the general fund and a portion is also allocated to the Graham Economic Improvement Corporation for economic development and property tax relief.

The city’s sales tax returns have seen a continual decline and the council will have to make a determination on their upcoming budget on how to move forward. 

A two-cent increase in the property tax rate was adopted by the Graham City Council in September 2024 following a public hearing. A tax rate of $0.665 per $100 valuation was approved during the meeting.

Last budget cycle the council also approved increased sewer connection charges, water tapping fees and wastewater and water service charges.

From 2022 to 2023, the city manager performed a financial analysis of the city’s rate needs for the water and sewer systems which found the current rates were not sufficient revenue to maintain and sustain both the water and sewer departments.

“The city’s water and sewer systems have experienced significant inflationary quick pressures during the 2017 to 2024 period. The reason that (2017) period is significant is that’s the last time the city has touched the water side of the rates,” Garretty said in August 2024. “For example, the cost of chemicals for treatment have increased by 20-40% over that seven year period since those rates were last adjusted. It costs us more to produce a gallon of water in 2024 than it did in 2017, that’s the bottom line.”

With increases to the tax, sewer and water rates along with employees salary raises through various funds, the city was hoping to continue to be able to provide services and enhance and expand existing infrastructure.

One such piece of aging infrastructure is the wastewater treatment plan. The city council Thursday, Jan. 23 approved Freese and Nichols to produce a new Wastewater Master Plan and conduct predesign services for a proposed project to rehabilitate the wastewater treatment plant.

“We’re beginning what will probably be a four-year journey, and that is to develop a wastewater plan that will make sure that the needs of the community when it comes to wastewater are met for the next 20 to 30 years,” Garretty said. “We’re (also) doing an update to our currently failing infrastructure at the wastewater treatment facility, a plant that was built in 1980.”

In a previous interview, Garretty spoke about cost estimates for the proposed project and how it will require an increase in city sewer rates.

“In order to do this project, there will have to be some sort of rate increase on the sewer,” he said. “But the real thing is, how much? Is grant funding available? Are there low interest loan alternatives through the state? All those types of things will help to mitigate how much of an increase it is.”