Just like its residents, the Town of Franklin is experiencing cost increases, but the town expects to maintain its current tax rate. However, water rates may increase to cover rising costs and infrastructure improvements.
The Franklin Town Council held its first budget session for the upcoming fiscal year on Monday, April 21. Town Manager Amie Owens gave an overview of the budget, and the council members will receive a copy of the budget at the May 5 regular monthly meeting. The budget also will be available to the public on the town website (franklinnc.com), and there will be a copy for review at Town Hall.
Owens said they could balance the General Fund budget with the current tax rate of 33 cents per $100 valuation (based on a 97% collection rate) and it would not require an allocation from the fund balance.
“In looking at the budget, we are very pleased with how the budget process itself went,” Owens said. “All the department directors did a fantastic job of getting their information on time and as complete as they possibly could.”
The proposed budget will be about $12.8 million – an increase of about 5.76% over the current year budget.
Owens said the budget will hold the operational budgets “steady” but there are some material cost increases. In addition to material cost increases, Owens said they have budgeted a 4% Cost of Living Adjustment for employees and a stipend increase for the council members. Owens said the last COLA for employees was in fiscal year 2021 and the n for council members had not been adjusted in 16 years. The proposed stipend increase is $200 per position per month. With the proposed increase, the stipend would be $500 per council member, $600 for vice mayor and $800 for mayor. The stipend increase would go into effect in January 2026 as the current council cannot vote to give themselves a raise.
Council member David Culpepper asked if instead of the stipend the town could offer a health insurance option for council members.
Overall, the budget has an estimated increase of $338,968 in expenses including health and dental insurance, retirement, workers compensation, utilities, the COLA and council stipend.
Some of the items included in the budget that the council members indicated as priorities during their February retreat are website redesign ($25,000), roundabout beautification ($25,000), Franklin Garden Club ($7,500 for maintaining downtown gardens), Economic Development incentives ($60,000), Greenway Connector and Recreation Capital Improvement ($227,443).
The proposed budget also includes a part-time coordinator for the Main Street program. Originally this was suggested as a full-time position; however, Owens said they decided it would be best to be part-time in the beginning. The town missed the deadline for the program this year and the next one will be in two years, giving the town more time to prepare to apply for the program.
“If we get a full-time position in here and then we’re not accepted into the Main Street program, what do we do with the position? I want to build the program effectively and efficiently,” Owens said.
Finance Director Sarah Bishop has agreed to take on the duties temporarily, at no additional cost. Prior to working for the town, she had experience in community engagement for a nonprofit. She said she can help the town make a good faith effort at getting into the program. “I think if somebody internal takes a good go at it and we work to build the program, then we will know if it’s going to work for us,” she said.
Bishop and Owens pointed out the position could eventually grow into a full-time one that includes the Main Street program as well as overall economic development for the town.
Water and sewer
While the General Fund budget balanced without an increase, Owens said they are proposing a 10% rate increase for the water and sewer budget and a $729,071.79 appropriation from retained earnings to balance the budget.
She said the increase was due to “escalating costs of materials and chemicals. Pipes and meters are not getting any cheaper. And we have to do these infrastructure improvements to make sure our facilities continue to work well.”
The town’s capital improvement plan approved in 2020 included a 5% rate increase each year for 10 years, however one year rates increased by 3% rather than 5%. When asked if the rate increases by 10% next year would it be back to a 5% the following year, Owens replied, “We just have to wait and see if materials are still up, if we still have debt service that we’re going to have to meet.”
She said bids were out for the clearwell project, which was originally estimated at $4.2 million, but the lowest bid was $5.4 million. The next bid after that was $6.2 million. She said they hope to get some grant money to offset the cost.
Council member Joe Collins asked how much revenue the 10% rate increase would generate. Bishop estimated between $300,000 and $400,000. Collins said if they didn’t raise the rate they would have to take even more from the retained earnings to cover the budget for the water and sewer department.
Bishop pointed out that the suggested 5% yearly increase was based on a study completed prior to COVID. “Nothing is the same,” she said.
Owens said a 10% increase would add about $6.50 per month to the average customer’s bill.
Council member Rita Salain said, “I’m concerned about the 10% with people have to come up with more out of their pocket when everything is so expensive.”
Fire Department
The budget for the fire department is based on the fire district tax remaining at 0.700 per $100 valuation. The county sets the fire tax rate for each department. The fire department has an annual debt service payment of $44,842 for the new substation on NP&L Loop. Owens said using the grant from the state, the substation should be completed by the end of this fiscal year.
Fund balance
In 2024, the council adopted a fund balance policy that states the town will keep a minimum of 80% of operating expenditures in the fund balance and up to 100%. Anything above that could be used for capital needs.
That means the town currently has between $1.5 million and $2.5 million available for capital projects.
Some of the items suggested are continuing with the next phase of the recreation plan for the Whitmire property, looking for a new location for the ABC store, paving the Greenway connector and landscaping for the bulb outs along Main Street.
Budget schedule
After the council members receive the budget at the May 5 meeting, a second budget session has been tentatively set for May 19. At Monday’s Town Council meeting, Owens will request that the public hearing on the budget be during the meeting on June 2 , followed by a vote so that the budget is approved before the new fiscal year begins on July 1.