Budget Workshop: Continued Discussion of FY 2026-2027 Recommended Budget - May 21, 2026
Budget Workshop: Continued Discussion of FY 2026-2027 Recommended Budget - May 21, 2026
On Thursday, May 21, 2026, at 2:00 PM, the Winston-Salem City Council met as a Committee of the Whole to continue discussion of the Fiscal Year 2026-2027 recommended budget. Key topics included potential general fund reductions, community agency funding, merit increases, property tax rate adjustments, and the impact of state-level constitutional amendments. The meeting concluded with a recommendation to the full council for a 2.2 cent property tax increase (from 2.6 cents in the proposed budget) and approval of a 3% merit increase for all employees meeting performance expectations.
Discussion Items
-
Staff Presentation on General Fund Reductions: City Manager Scott Tesh and staff presented a series of potential general fund reductions totaling approximately $2.4 million. These included delaying merit implementation to December, correcting stormwater fund positions, reducing public safety leased lines, increasing Winston Lake Golf Course revenue projections, eliminating the decorative street lighting subsidy, closing the secondary revenue collections location at the Black Phillips Smith building, eliminating unallocated community agency funding ($115,000), and eliminating a human relations position. Councilmembers discussed the impact on the tax rate (roughly half a penny per $2 million).
-
Health Insurance and Benefits: Dr. Keena presented a comparison of employer/employee cost shares for health insurance, showing the city's proposed 87% employer share. The health insurance increase for the most common employee-only PPO plan is $1.39 per pay period. City Manager Pate noted that no employee will see a net pay decrease due to the increase.
-
Merit Increases and COLA: Staff clarified that 99% of employees meeting performance expectations would receive the 3% merit increase. A potential 1% cost-of-living adjustment (COLA) would cost approximately $1.13 million for the general fund if implemented in January (half-year cost). Councilmember Hall expressed interest in future COLAs, but Mayor Pro Tem Adams urged caution given uncertain state revenue.
-
Community Agency Funding: Councilmember Clark presented a prorated allocation of $115,000 in unallocated general fund money and $400,460 in occupancy tax fund money. The occupancy tax allocation (for culture, recreation, and tourism) included Collideum, Summer Youth Program, and Triad Film Consortium. Debate ensued over whether Collideum should be funded from both the general fund and occupancy tax; some councilmembers argued it should be only in one pot. Councilmember Clark recommended keeping the $115,000 in the general fund and not cutting the decorative street lighting program.
-
Property Tax Rate Discussion: Councilmember Clark proposed a 2.2 cent increase (from 2.6 cents) to show sensitivity to citizens, citing pending state constitutional amendments that could restrict local revenue. The proposed new rate would be 58.9 cents per $100 valuation (current is 56.7). Mayor and councilmembers expressed support for the lower increase as a responsible message to the state legislature.
-
Housing and Unhoused: Councilmember Joyner asked about additional funding for the unhoused. Councilmember Clark noted that the general fund already provides hundreds of thousands of dollars for homeless services (e.g., Bethesda Center, City with Dwellings, Samaritan Ministries) and that a new local housing trust fund is being developed. Mayor Pro Tem Adams cautioned that the city's role in social work is limited and may be further restricted by state actions.
Key Outcomes
-
Motion to Recommend a 2.2 Cent Property Tax Increase: Councilmember Clark moved to recommend a 2.2 cent increase (from 56.7 to 58.9) instead of the proposed 2.6 cents, supported by the identified general fund reductions (excluding the unallocated community agency funding and decorative street lighting program). The motion passed unanimously (all aye).
-
Merit Increase: The 3% merit increase for all employees meeting expectations will be maintained, with implementation delayed to December to save $1.2 million in the current fiscal year. No layoffs will occur; two positions eliminated (one vacant, one relocated via attrition).
-
Community Agency Funding: The $115,000 in unallocated general fund community agency funding will be retained in the budget. Councilmembers may adjust allocations before the final vote on June 1, 2026, but must provide a balanced proposal.
-
Next Steps: The committee's recommendation will be presented to the full City Council on Monday, June 1, 2026, at 6:00 PM for final budget adoption. The meeting also previewed routine resolutions (capital plan, tax collection, opioid settlement, user fees, stormwater fees, and personnel regulations) that will be voted on as part of the budget package.
Meeting Transcript
Sorry, I'm Alan Jones again on the mic now. Call to order this um city council meeting acting as a committee of the whole and ask city clerk to call roll, please. Councilmember joyner present. Councilmember Andrew Bowen. Here council member Sipio present. Councilmember Clark. Here. Mayor Pertim Adams here. Councilmember Taylor. Councilmember Hall, present. And Councilmember Burke here. Thank you very much. Of course, we're continuing today the uh discussion of fiscal year 26-27 budget. And I turn the meeting over to Chairman of the Finance Committee, Councilmember Clark. Thank you. Thank you very much. We're gonna have some presentations by the staff to answer some questions that were have been brought up in the last few. Uh and there's a few other things to discuss at the end before we finish. I am gonna make a recommendation uh on the budget, and it will be up to the committee to hold the vote on it, not just the finance committee as committee the whole with the understanding that this is uh the vote will be to recommend something back to the council. Now council just happens to be here, but and that will take place which date? June 1st. June 1st. So just everybody understand the uh timeline of what we're doing. And with that, uh I'll turn it over to City Manager. Mr. Mr. Tess is going to uh gonna start us off today. Good afternoon, Mayor Mayor puts in members of the city council. Uh City Clerk, if you could um get the presentation up for us. Yesterday evening, a res uh short response packet was sent out. We're gonna go through a few of those things in a little more detail. There are several of those other items. If you have questions, feel free to ask. Several of them also say that we are committed as staff to bringing back presentations and more detailed information through the committee agenda in the fall, particularly things related to public works. Uh so I do have one staff change I'm gonna tell you about. We haven't done one of these in a while. It's a very simple technical adjustment based on something that council has already approved. Uh Dr. Keena is gonna come up. She's got a couple of slides to talk about some follow-up from benefits administration questions that were part of budget workshops last week. And then I will go through a few things that are in the response packet related to potential general fund recommendations and also community agencies. When the utilities commission looked at that refinancing, it created about four hundred thousand dollars worth of savings. They built that into their recommended budget for you, uh and also into the rate structure that they are putting forward. We are just putting this into the city's budget as they recommended it again, already been approved, so it's just a technical adjustment where we'll we'll reduce principal and interest payments in the water and sewer fund by four hundred thousand dollars based on savings and uh bond refunding. Dr. Keena, I'm gonna allow you to come up and uh go through the benefits. The follow-up from uh last week was the employer employee share cost comparison. And so what you see before you are some of the localities that we were able to get that information from. Um the city is what we're proposing would be 87 percent for the employer share cost and 13 percent for the employee. Um comparing to the other provide or other localities.
openpublica.com