Recommended FY 2027 Spencer budget continues momentum

SPENCER – Town Manager Peter Franzese has recommended the fiscal year 2026-27 budget to the Spencer Mayor and Board of Aldermen (watch here). The proposed budget for FY27 totals $5,613,197 with $5,317,321 in the General Fund, $228,510 in the Powell Bill Fund, and $67,366 in the Capital Reserve and Replacement Fund. The recommended property tax rate is 63.05 cents per $100 of valuation, no change from the current rate.

The proposed budget represents an increase of eight percent from the FY26 adopted overall budget, and approximately six percent more in the General Fund. The increase is supported by modest growth in assessed property values and local sales tax, two key municipal revenue sources. However, this revenue growth was tempered by anticipated higher costs associated with staff compensation, health insurance, and retirement contributions.

No changes were recommended to other fees such as Vehicle Tax or Solid Waste. Spencer joins many other local governments paying close attention to NC General Assembly legislation that could impact local revenue adjustments in future years.

The Town’s annual debt service obligation totals $223,661, which is the equivalent of 5.6 cents of the ad valorem tax rate. This effectively leaves a tax rate of 57.45 cents available for General Fund operations.

Franzese described how departmental budget requests were extremely lean to offset a variety of structural cost increases and the need to serve anticipated development prior to receiving tax revenue from newly developed property.

“The proposed FY27 budget maintains a very lean operational budget and continues to invest in high quality services delivered by our most important resource, our staff,” he noted. “We expect continued development in Spencer to add several million dollars of property value by the end of calendar year 2026, which will ultimately lead to relief for residential taxpayers.”

In recent years, the Town has significantly invested in staff and critical community facilities and equipment. The proposed FY27 budget generally maintains staffing levels and proposes some staffing adjustments to improve departmental supervision and efficiency. A limited number of currently frozen or vacant positions are recommended to be frozen for some or all of FY27, in a cost-savings effort. Departmental requests for operational expenses were very similar to current year’s figures, due to the awareness of increased expenses for personnel and insurance.

Other key recommendations include:

• Following through on the two-year implementation commitment made by the Board of Aldermen in 2026 to bring staff compensation closer to market rates.
• Anticipating an 18 percent increase in group health insurance premiums, because renewing a 2009 “grandfathered” health coverage plan is no longer possible.
• Reclassifying existing Police positions to add three Sergeants, to improve patrol supervision and coverage.
• Shifting Fire funding from overtime to improve staffing and cover built-in scheduling variations through a full-time (30 hour) Deputy Chief and consistent weekly part-time.
• Conversion of a Mechanic job-share (two part-time) to a full-time (30 hour) Mechanic complemented by a part-time (15 hour) Mechanic.
• Replacement and upfit of one Police vehicle and a Public Works mower.
• Continuing support of community events, including marketing support for the North Carolina Transportation Museum and sponsorship of Spencer’s Holiday Caravan parade and Winterfest.
• Investing in Street maintenance through the Powell Bill Fund.

The proposed budget includes use of approximately $455,000 from the General Fund Balance. $67,366 of this amount is to cover the minimal amount of capital requests included in the budget recommendation. Staff estimates use of available fund balance in the current year will be 15 to 20 percent of what was budgeted and expects that performance trend to continue or improve.

A public hearing on the budget is scheduled for 5:30 p.m. on Thursday, June 4 (pre-Agenda meeting) at Spencer Town Hall. Interested individuals can view the Town Manager’s recommended budget at spencernc.gov and in print in the Town Hall lobby.

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The annual strategic planning session, which informs the proposed budget, can be found here (FY26 goal updates and community input) and here (staff presentations and budget workshop). Agenda packets and minutes are available here.