Roanoke Rapids City Manager Kelly Traynham Tuesday will present a budget amendment to the city council to adjust for a gap in anticipated revenues discovered during the budget-planning process for the upcoming fiscal year.

The city manager explained in an addendum to the budget message, which was presented to the council Thursday evening, that while developing the budget the city initially estimated $9,770,946 in ad valorem tax revenue.

As of April 1, the city has received $8,599,975 in ad valorem tax revenue — 88 percent of budgeted revenues.

In the budget message, she wrote, “While our objective is always to project accurate financial estimates, unforeseen variables have contributed to a gap between anticipated and actual revenues. This reality presents us with the dual challenge of addressing declining revenues alongside rising operational costs.”

Traynham said, “We recognize the impact that this situation may have on our work and on our collective commitment to serving our community efficiently and effectively. Please be assured that steps are being taken to address these fiscal challenges, and we are committed to finding strategic pathways forward that balance fiscal responsibility with our service obligations.”

Additionally, she told the panel, “There will be a gap in some of the anticipated and actual revenues,” and that the “budget amendment is advised to correct that.”

She said herself and staff are working through solutions to prevent this from happening. “Our new software system that’s being installed is going to provide significant transparency opportunities and have everything housed in one system rather than our current methods that are becoming obsolete.”

Budget message

“This proposed budget reflects our collective priorities and dedication to serving the community effectively within the confines of available financial resources,” she said. “It reflects the city's commitment to fiscal discipline, efficient allocation of resources, and dedication to meet community needs in a sustainable manner.”

The proposed  $19,844,045 financial plan, which represents a decrease of $8,001 from the current year, balances increasing financial obligations with the need to maintain affordability for residents, noting economic indicators like declining consumer confidence affected by inflation and rising costs, she said. “The budget prepares the city for growth by investing in employee retention, community safety, and technology to improve operational efficiencies and reduce long-term costs. Prioritization of these requests considers the awareness of budget limitations and the need to strategically allocate resources.”

By utilizing strong reserves and exhibiting responsive management, Traynham said the city intends to mitigate variances in revenue and expenditure projections through the fiscal year.

The proposed budget includes the ad valorem tax rate of $0.641 per $100 in value.

Revenue highlights

The proposed budget anticipates modest revenue estimates mainly driven by stable property tax revenues and normalized tax revenue changes, aligning with statewide predictions for the upcoming fiscal period, she reported.

The proposed budget was prepared utilizing the tax rate of $0.641 per $100 of assessed value, which is expected to generate $8,667,940 in net revenue after the 1 cent rate allocation to the Roanoke Valley Rescue Squad.

Sales tax projections are conservatively estimated at $3,845,750, acknowledging a cooling trend in consumer behavior, she said.

Anticipated revenue from Powell Bill funds stands at approximately $579,950 and is primarily allocated for infrastructure maintenance. “The budget includes funding for a pavement condition and management study to identify and address strategic resurfacing priorities.” 

The city’s expected revenue is based on a distribution formula that provides 25 percent based on local street miles, and 75 percent based on population. “The factors negatively impacting the city’s Powell Bill allocation include little to no new growth in street mileage and a declining population.”

In other revenues investment earnings continue to outpace budgeted amounts due to higher interest rates set by the Federal Reserve. The city expects to receive another increase in state-collected alcoholic beverage taxes.

The proposed budget is balanced using $698,383 from the general fund balance. 

Uses of the general fund balance should be limited to one-time or non-recurring expenses. This represents 3.52 percent of the operating budget. “It will still keep us with a very healthy fund balance,” she said. “We built it up over the last several years. If we felt it was going to put us in significant risk we would certainly have a different plan in place.”

Expenditure highlights

In addressing personnel costs, Traynham said, “Like most employers, the city is experiencing workforce challenges in the recruitment and retention of employees. The city council and city administration continue to recognize that our employees are vital to the delivery of municipal services and are our most important resource.”

The proposed budget includes a cost of living adjustment and implementation of a market-based pay plan salary schedule to aid with recruitment and retention. 

The study was completed by The MAPS Group and presented to the city council on April 1.

The proposed budget allocates funding for the employer’s share of benefits.

Effective July 1 the North Carolina Local Government Employees Retirement System employer contribution rates will increase.

The law enforcement rate will increase from 15.10 percent to 16.08 percent.

The civilian/non-law enforcement rate will increase from 13.60 percent to 14.40 percent.

There will be a 5 percent salary contribution to 401k for each law enforcement officer.

The city’s group health insurance premiums will increase by 7 percent, while maintaining 100 percent coverage to full-time employees. The city partially supplements the elected dependent coverage to reduce the overall costs to the individual employee electing coverage for children, spouse, or a family plan.

The proposed budget maintains 401k matches up to 3 percent for general employees — non-law enforcement — a $250 Christmas bonus, and benefits established within the personnel policy.

Departmental budget allocation

Expenditure growth is expected to remain moderate following inflation trends, Traynham said. “The city administration is committed to maintaining balanced operations through disciplined budgetary practices. Investment in city infrastructure and public services remains a key priority, ensuring that community essentials such as emergency services and environmental health are adequately funded.”

General government 

Allocated $2,762,078, accounting for property, liability, workers compensation insurance costs, funding for the fleet vehicle leasing program, and other services that serve citywide or non-departmental obligations.

Administration, finance, human resources, Main Street 

Includes a sum of $1,397,749.

Public works 

Set at $5,108,821, this portion of the budget supports essential street repairs and maintenance without significant funding for resurfacing.

Public safety 

Combined Police and Fire department budgets account for $7,472,920, ensuring continued investment in safety equipment and effective service levels.

Parks and recreation

Allocates $2,154,746.

Planning and development

Allocates $602,402.

Debt obligations 

The city will enter the upcoming fiscal year with an annual budget of approximately

$1,087,519 in currently obligated tax supported debt across three financial instruments. 

The city will satisfy one debt instrument by the end of the next fiscal year, freeing up approximately $40,862 in the 2027 fiscal year.

Conclusion

“The fiscal year 2026 budget reflects Roanoke Rapids' commitment to fiscal health and service improvement,” Traynham wrote. “As instructed by state statutes, this budget aims to ensure sustainable city operations while planning for future economic resilience.”

She wrote: “We are grateful for your continued dedication and professionalism as we navigate these challenges together. Thank you for your understanding and your resilience in these changing economic times. Together, we will work towards sustainable solutions for the betterment of Roanoke Rapids.”