During her presentation Monday night of Morganton’s proposed $94 million budget, City Manager Sally Sandy balanced optimism about the city’s future with concerns about ongoing Hurricane Helene recovery efforts and state legislation that could impact local finances.
The proposed budget, which will be voted on on June 22, is a $7.7 million decrease from the current fiscal year. It maintains the city’s 50-cent property tax rate and includes a 2% cost-of-living adjustment effective in July and a 2% merit increase effective in March for city employees. The council will hold a public hearing and vote on the budget on June 22.
While the tax rate would remain unchanged, Sandy said one of the biggest uncertainties facing the city is proposed legislation in the North Carolina General Assembly that would limit local governments’ authority over property taxes.
Property taxes are expected to generate about $12.65 million and account for about 32% of the general fund, which supports key city operations like public safety, parks and recreation, public works, and other city services. Sandy noted that property tax revenue does not fully cover basic public safety operations, leaving a gap of about $368,000.
“I know there’s a perception that everybody pays their taxes and that we have all of this money, and that everything gets paid for with that, but that simply is not true,” Sandy said.
“That’s the best way I know how to explain what a big deal it is if the General Assembly decides that you don’t get to decide for your community how to set your property taxes, because your community elected you to do that,” she told council members. “That is a threat to our budget and our ability to pay for services as we go forward.”
The city’s general fund is projected at nearly $40.5 million, a decrease of about $5.2 million from the current year. Sandy said the budget focuses on providing quality services, continuing investments in quality-of-life activities, and attracting new development and people.
The downtown municipal service tax would remain at 12 cents per $100 of valuation and generate $163,500, covering about 16% of the Main Street department’s expenses.
CAPITAL PROJECTS
Capital projects would account for nearly $11 million in general fund spending, led by more than $6 million in potential renovations to the City of Morganton Municipal Auditorium. The 40-year-old facility is eligible for disaster relief funding and would receive improvements to the front of house, auditorium, backstage areas, dressing rooms, along with the addition of a loading dock, storage space, and a multipurpose space for community events and classes.
If the city does not receive grant funding, Sandy said staff will revisit whether it’s the right time to move forward with the project.
Other general fund capital projects:
- $315,000 for repair and painting of the exterior of the Historic Courthouse, with Burke County covering the other half of the cost
- $429,500 for public safety vehicles, fire equipment, and a new K-9
- $600,000 for resurfacing
- $300,000 for a vacuum truck for public works
- $510,000 for three garbage trucks with tippers and 5,000 trash containers
- $100,000 for leased parking lot improvements
- $50,000 for interior painting of the Morganton Community House
The proposed budget also continues funding for community partnerships, including regional efforts opposing Charlotte’s request to increase water withdrawals from the Catawba River Basin.
Along with other local governments, Morganton is contributing funding for legal, engineering, and public relations services involved in the effort. The city’s share for the upcoming fiscal year is $40,210.
“It’s a fight worth fighting, especially as we sit here in a drought,” Sandy said.
The general fund would require $320,683 worth of fund balance to balance the budget, which Sandy said complies with council policy and follows a year of adding to the fund balance.
“Part of that, again, is projects that take multiple years to complete, so your expenditures, your finals, don’t catch up to you,” Sandy said. “We’ve been pretty conservative because we’re really trying to get Helene things done.”
Garbage fees could increase from $12 to $14 per month beginning Aug. 1. The budget also includes $510,000 for the first phase of transitioning to roll-out containers while continuing backyard service once a week.
UTILITY FUNDS
Water, sewer, and electric usage has largely returned to pre-Helene levels, and the city is seeing slight growth in commercial and industrial usage. However, revenue growth is not keeping pace with rising expenses.
The proposed water fund totals about $8.4 million and includes a 2.5% volumetric rate increase, which depends only on usage, not fixed fees. A residential customer using 5,000 gallons per month would see an increase of less than $1 monthly. The proposed fund also includes $2.2 in capital improvements.
The wastewater fund is also projected at about $8.4 million and includes a 2.5% volumetric rate increase effective Aug. 1. Capital projects total about $2 million. Both the water and sewer funds will include retained earnings to for balancing and include improvements at the treatment plant, line and/or manhole replacements, and infrastructure for housing developments.
Under a $31.7 million proposed budget, electric would see a 2.6% increase in all customer classes, which is the first rate increase in several years, according to Sandy. The average residential customer would see an increase of $3.47 per month. Capital improvements are about $3 million and include pole inspection/replacements, a new bucket truck, and more. Staff would use retained earnings to balance the fund.
“In North Carolina, we have the lowest commercial rates and second lowest residential rates of electric providers,” Sandy said.
CoMPAS has a proposed budget of $6.4 million, which includes $75,000 for a marketing plan, $610,000 in capital improvements, and retained earnings to balance the budget. The city is continuing to see a slight decline in internet customers as federally funded private providers expand service within Morganton.
HELENE RECOVERY
While the budget addresses current operations and capital needs, Hurricane Helene recovery remains one of the city’s biggest long-term financial challenges.
The city has received reimbursement for 17 projects totaling about $5 million. In all, 26 projects are estimated to cost nearly $60 million.
The largest challenge remains rebuilding Catawba Meadows Park and the Soccer Complex. Preliminary engineering estimates place the cost between $27 million and $30 million.
“That’s 15 fields and everything that goes with them. That is two concession stands, an office, shed, bathroom facilities, equipment storage, and whatever other buildings were destroyed,” Sandy said. “That is giant. That is larger than the available fund balance that we have in the entire general fund.”
“So, if we spent every dollar that we have saved, we could not redo these parks at the current engineering estimates,” Sandy said.
FEMA has only approved about $300,000 of the estimated costs so far, while current calculations would reimburse roughly 10% of total expenses at $3 million.
“That is unacceptable,” Sandy said.
The city continues to work with FEMA, engineers, and state officials while evaluating financing options to move projects forward, available FEMA funding, and competitive state and federal funding to move projects forward.
“I’m no closer to having our people playing sports, enjoying the park that they’re paying for, and that’s frustrating,” Sandy said. “It’s very depressing”
Sandy said the proposed budget serves as a roadmap for maintaining Morganton as a city of choice while balancing financial responsibility with recovery efforts, continued investment, and future growth.
Her theme for this year’s budget, a Sally Sandy tradition, came from the film “Miracle,” quoting coach Herb Brooks: “Great moments are born from great opportunity.”
How does the city accomplish it?
“With unselfish players who bought into a unified system,” Sandy said, quoting Brooks once again. “I see that’s how we work here.”


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