Title
Fiscal Year 2026 Operating Budget and Fiscal Years 2026 - 2030 Capital Investment Plan
Action
Action:
Adopt the Fiscal Year (FY) 2026 Appropriations and Tax Levy Ordinance, the FY 2026 Compensation and Benefits Recommendations, and other items related to the Annual Budget Ordinance adoption:
A. The FY 2026 Operating Appropriations and Tax Levy Ordinance,
B. The FY 2026 - 2030 Capital Investment Plan,
C. The FY 2026 General Solid Waste Fee,
D. The FY 2026 Storm Water Services Fees,
E. The FY 2026 Transit Operating Budget, FY 2026 Transit Debt Service Budget, and FY 2026 - 2030 Transit Capital Investment Plan which was approved by the Metropolitan Transit Commission on April 30, 2025,
F. The Charlotte Water Rate Methodology by approving revisions to the Revenue Manual,
G. The FY 2026 Charlotte Water Rates,
H. The FY 2026 Compensation and Benefits Plan and associated Human Resources contracts,
I. Outside Agency and Municipal Service District contracts,
J. Internal Service Funds Financial Plans Resolution, and
K. Other budget items.
Body
Committee Chair:
Dimple Ajmera, Budget, Governance, and Intergovernmental Relations Committee
Staff Resource(s):
Marcus Jones, City Manager
Marie Harris, Strategy and Budget
Teresa Smith, Finance
Policy
§ As required by Chapter 159 of the North Carolina General Statutes, the City of Charlotte adopts annual appropriations and a tax levy ordinance and considers related actions by July 1 of each fiscal year.
§ The annual budget is an instrument that establishes policy. The budget identifies and summarizes programs and services provided by the city and how they are funded. It is the annual plan that coordinates the use of revenues and associated expenditures.
Background
§ The annual budget ordinance is presented in accordance with the City Manager’s Proposed FY 2026 Budget presented on May 5, 2025, and subsequent City Council budget adjustments.
§ The FY 2026 Budget is structurally balanced and focuses on five City Council Strategic Priorities: Well-Managed Government focused on Equity, Engagement, and the Environment; Great Neighborhoods; Safe Communities; Transportation and Planning; and Workforce and Business Development.
§ The budget development process includes input from the community, city departments, and the Mayor and City Council. To facilitate input, the city held three Budget, Governance, and Intergovernmental Relations Committee meetings on February 3, March 3, and April 7, 2025, and two Budget Workshops on February 10 and March 24, 2025. Public budget engagement occurred through a virtual budget “Lunch and Learn” session on March 4; an in-person Budget 101 event on March 18; a virtual “Community Conversation” on May 27; and a budget public input survey that was available from February 8 through April 7. There was also a Public Hearing on the Proposed Budget on May 12, a Budget Adjustments Meeting on May 19, and a Budget Straw Votes Meeting on June 2, 2025.
§ The Mayor and City Council met on May 19 and June 2, 2025, to discuss budget adjustments for consideration to the Proposed FY 2026 Budget. Five budget adjustments were approved by City Council for inclusion in the FY 2026 Budget, including the use of $3,237,000 in one-time funding from American Rescue Plan Act (ARPA) revenue replacement funds.
§ FY 2026 General Fund and FY 2026 General Capital Investment Plan (CIP):
- Balances budget without a property tax increase.
- Preserves core services.
- Maintains operating reserve levels with no use of one-time revenues such as General Fund fund balance.
- Continues Charlotte’s legacy of affordable cost of service, with the expectation of maintaining the lowest tax rate among North Carolina’s largest cities in FY 2026.
- Protects current employees with no layoffs or furloughs.
- Raises minimum pay to $24/hour for city employees.
- Begins a four-year plan to improve Solid Waste Services’ cost recovery to 50 percent for Residential Curbside collections by splitting the Solid Waste Fee into two fees, Residential Curbside and Residential Dumpster, and increasing the Curbside fee by $1.35 per month and the Dumpster fee by $0.49 per month.
- Establishes the Office of Youth Opportunities to promote economic opportunity and positive youth development for ages 13-24.
- Continues the city’s commitment to violence reduction through investments in the Alternatives to Violence program along Beatties Ford Road and provides funding for the expansion of Atrium Health’s hospital-based violence intervention program, Project BOOST.
- Supports small businesses with nearly $2 million to establish the Small Business Readiness fund to build capacity in targeted industries, especially those related to mobility investments, and to continue NXT|CLT and Amp Up.
- Leverages more than $1.8 million in funding to support urgent home repair, affordable housing placement, and high-quality naturally occurring affordable housing in addition to the $100 million voter-approved 2024 Housing Bond to increase affordable housing production.
- Invests $1 million to start a community benefits fund to help advance the greatest needs identified in the 14 Community Area Plans.
- Continues the city’s Education to Employment (E2E) program, giving Charlotte-Mecklenburg Schools graduates opportunities to apply for entry-level positions within the city.
- Continues being a leader in municipal sustainability led by the Strategic Energy Action Plan with:
§ $2.5 million to support the installation of sustainable infrastructure at city-owned facilities; and
§ Funding for 45 electric vehicles and 155 hybrid vehicles to reduce emissions in the city’s fleet, as well as the continued conversion of the Airport’s bus fleet to electric vehicles.
- Invests $25.6 million in Fire infrastructure by advancing the construction of five firehouses (three new infill and two replacements) and expansion of one existing firehouse to accommodate an additional fire company.
- Adds a Commercial Burn Building to the Advanced Planning and Design Program to support on-going training for Charlotte firefighters.
- Funds $30 million over the next four years for a satellite Animal Care and Control adoption facility that is currently in design.
- Elevates Charlotte Business INClusion and the General Services’ Procurement Division into the new Contracting and Procurement Department to optimize cohesion and the expertise within these core services.
- Establishes a new Organizational Improvement Team that will identify opportunities to streamline operations, improve service delivery, and improve customer satisfaction beginning with the new Contracting and Procurement Department as well as the CLT Development Center.
- Realigns Animal Care and Control services from Police to the General Services department to allow Animal Care and Control to more directly benefit from the administrative, operations, and field services components within General Services.
- Dedicates $3 million in FY 2026 and $11 million over five years towards an ongoing radio replacement program to ensure critical public safety communication infrastructure is replaced regularly.
- Supports expansion of the 911 Call Center in Police headquarters and the Police and Fire Training Academy with $2 million in funding in FY 2026 for a total investment of $9 million.
- Continues to implement the Americans with Disabilities Act Transition Plan in city-owned facilities.
Recommended Changes to the Proposed FY 2026 Budget from the June 2 City Council Budget Straw Votes Meeting
§ During the June 2 Budget Straw Votes Meeting, City Council approved five adjustments with the first four adjustments listed utilizing one-time funding from American Rescue Plan Act (ARPA) revenue replacement funds.
- Allocates $1.5 million over three-years for the city’s employee support programs;
- Provides $200,000 for the NAACP National Convention hosted in Charlotte;
- Programs $1,237,000 to add the following non-profit organizations to the city’s FY 2026 One-Time Discretionary Financial Partner program:
§ Carolina Metro Inc.: $50,000,
§ Carolina Youth Coalition: $100,000,
§ Carolinas Asian American Chamber of Commerce: $100,000,
§ Charlotte Museum of History (operating): $100,000,
§ DreamKey Partners: $231,000,
§ For The Struggle, Inc.: $100,000,
§ Hearts for the Invisible: $100,000,
§ Just Do It Movement! Inc.: $32,000,
§ PowerUp USA: $100,000,
§ Que-OS/BOOM Charlotte: $90,000,
§ Roof Above: $100,000,
§ The Males Place, Inc.: $100,000, and
§ The Save Our Children Movement, Inc.: $34,000;
- Provides $300,000 to the Helping Hands Foundation; and
- Authorizes the City Manager to seek $350,000 of alternate funding sources for an upcoming Charlotte Museum of History exhibit.
A. Adopt the FY 2026 Operating Appropriations and Tax Levy Ordinance
§ The total FY 2026 budget is $3.65 billion net of transfers, with $1.21 billion for personnel and benefits expenditures, $988.0 million for operating expenditures, $1.14 billion for capital expenditures, and $308.2 million for debt service expenditures. The General Fund operating budget totals $943.5 million.
§ The total budget includes the following key revenues:
- A property tax rate of 27.41¢ per $100 of assessed valuation, the same rate as in FY 2025. The FY 2026 assessed value is estimated at $231.8 billion, with an estimated collection rate of 99.4 percent.
- The FY 2026 Water and Sewer Fee is proposed to increase by 6.81 percent for the typical homeowner, which is an average increase of $5.47 per month.
- The FY 2026 Storm Water Services Fee is proposed to increase by 6.60 percent. The typical homeowner would experience a $0.67 per month increase.
- The Solid Waste Fee is being split in FY 2026 to align with the two residential service types, dumpster and curbside. The Solid Waste Fee is increasing by approximately $0.49 per month for residential dumpster service and approximately $1.35 per month for residential curbside service.
- Select Aviation non-regulatory fees were adjusted to increase or decrease based on Aviation’s cost-recovery model.
- Charlotte Area Transit System (CATS) base transit fare remains flat from FY 2025 to FY 2026.
B. Adopt the FY 2026 - 2030 Capital Investment Plan
General CIP
§ The General CIP is supported by a portion of the 27.41¢ property tax as follows:
- 4.09¢ for the Municipal Debt Service Fund, and
- 2.09¢ for the Pay-As-You-Go (PAYGO) Fund.
§ The FY 2026 - 2030 five-year General CIP totals $651 million and includes General Obligation Bonds, other sources, reappropriation of prior authorization, and PAYGO funds.
Nongeneral CIPs
§ Nongeneral programs are financially self-sustaining and do not rely on property tax support.
§ The FY 2026 - 2030 five-year nongeneral CIPs include:
- Aviation totals $1.67 billion and is funded by $906.8 million in revenue bonds, $249.5 million in Aviation PAYGO, $262.0 million in passenger facility charges, $182.2 million in federal grants, and $72.2 million in state grants.
- CATS totals $331.6 million and is funded by $121.6 million in Certificates of Participation, $106.9 million in federal grants, $16.8 million state grants, and $86.3 million in other sources.
- Charlotte Water totals $2.29 billion and is funded by $988.6 million in Charlotte Water PAYGO and $1.30 billion in water and sewer revenue bonds.
- Storm Water totals $425.0 million and is funded by $180.0 million in revenue bonds and $245.0 million in Storm Water PAYGO and program income.
C. Amend the General Solid Waste Fee
§ The Solid Waste Fee is being split in FY 2026 to align with the two residential service types, dumpster and curbside. The annual Solid Waste Fee changes for residential dumpster service from $104.05 to $109.90 and for residential curbside service from $104.05 to $120.30. The increase will generate additional revenue to cover a portion of FY 2026 increases in Solid Waste operations. The additional revenue brings the estimated cost recovery for curbside residential service to 39.8 percent with the goal to reach 50 percent cost recovery by FY 2029.
§ These changes become effective on July 1, 2025.
- The revised fee will be included in the tax bills that will be mailed to property owners by September 2025 and are due by December 31, 2025.
D. Approve the FY 2026 Storm Water Services Fee
§ In accordance with the Interlocal Agreement on Storm Water Services, this action will inform Mecklenburg County of the amount to be charged for the city’s portion of the fee.
§ The FY 2026 Storm Water Services Fee changes include:
- Detached single family homes with less than 2,000 square feet (sf) of impervious area changes from $6.88 per month to $7.34 per month in FY 2026;
- Detached single family homes with 2,000 to less than 3,000 sf of impervious area changes from $10.15 per month to $10.82 per month in FY 2026;
- Detached single family homes with 3,000 to less than 5,000 sf of impervious area changes from $15.00 per month to $16.00 per month in FY 2026;
- Detached single family homes with 5,000 sf or more of impervious area changes from $24.81 per month to $26.46 per month in FY 2026; and
- Commercial and multi-family per acre of impervious area changes from $179.07 per month to $190.98 per month in FY 2026.
E. Adopt the FY 2026 Transit Operating Budget, FY 2026 Transit Debt Service Budget, and FY 2026-2030 Transit Capital Investment Plan which was approved by the Metropolitan Transit Commission on April 30, 2025
Policy
§ The Transit Governance Interlocal Agreement calls for the Metropolitan Transit Commission (MTC) to annually approve a Transit Operating Program and a Transit Capital Program by April 30. Following the MTC’s approval, the Transit Operating and Capital Programs are forwarded to City Council for approval. Upon approval, City Council shall fund the programs through its budget process and/or project ordinances.
Budget Overview
§ The FY 2026 Transit Operating and Debt Service Budgets and the FY 2026 - 2030 Transit CIP have been developed in compliance with CATS Financial Policies, including an annual contribution to the Transit Revenue Reserve Fund, year-end fund balance, debt service coverage ratios, and the transfer of balances to the capital program.
§ The FY 2026 Budget includes no proposed fare increases and no proposed new fees.
§ The FY 2026 Budget for CATS represents three key ideas: safety and security of riders and operators, valuing CATS employees, and maintenance and preservation of CATS facilities, buses, and rail vehicles.
F. Amend the Charlotte Water Rate Methodology by approving Revisions to the Revenue Manual
§ Charlotte Water rate methodology changes with the adoption of the FY 2026 Budget.
§ The schedule of water and sewer rates, fees, and charges is calculated according to the rate methodology as codified in the revenue manual and Charlotte Water’s approved budget and is published annually.
§ The Revenue Manual revisions include:
- Clarification of language related to special financing programs, civil penalties, and installation fees;
- Addition of miscellaneous fees related to backflow and meter/yoke removal;
- Addition of levelized billing options for customers;
- Rebranding of the manual name;
- Various formatting and editing of duplicative language; and
- Alignment with Chapter 23 of the City Code.
§ A Joint Public Hearing between the City Council and the Charlotte Water Advisory Committee was held on May 12, 2025. No comments from the public were received.
G. Adopt the FY 2026 Charlotte Water Rates
§ Water and sewer fees are necessary to maintain current infrastructure, accommodate growth, and respond to changing regulatory requirements.
§ FY 2026 rate changes include:
- Typical resident water and sanitary sewer availability fees at $11.76 per month, an increase of $0.84 from Fiscal Year 2025;
- Typical resident water and sanitary sewer fixed fees at $13.24 per month, an increase of $0.92 from Fiscal Year 2025;
- The typical monthly total water and sanitary sewer bill for residential customers is estimated to be $85.82 in Fiscal Year 2026, an increase of $5.47 per month; and
- The typical bill assumes 5,236 gallons, or seven Ccf, used each month. Based on the current rate structure, users consuming more than the typical level of consumption are charged a higher rate to encourage conservation and responsible use of this resource.
H. Adopt the FY 2026 Compensation and Benefits Plan and Associated Human Resources Contracts
Compensation
§ This action authorizes the City Manager to implement the recommendations from the FY 2026 Compensation and Benefits Plan and subsequent adjustments by Council at the June 2 Budget Adjustments meeting including, but not limited to the following items:
§ In the Public Safety Pay Plan:
- All merit steps of the FY 2026 Public Safety Pay Plan to be funded,
- A market adjustment to the pay steps of 1.5 percent, effective August 16, 2025, and
- A one-time 1.5 percent lump-sum payment in November 2025 for Public Safety Pay Plan members that are not eligible for a step increase in FY 2026.
§ In the Salaried Pay Plan:
- Merit increase pool funded at three percent, and
- A 2.5 percent structural increase to the Salaried Pay Plan ranges, effective July 5, 2025, which adjusts the minimum and maximum rates of pay grades to ensure the plan remains competitive in the marketplace.
§ In the Hourly Pay Plan:
- City minimum pay rate increase to $49,920 for all non-temporary, full-time employees effective November 1, 2025,
- One across-the-board pay increase of 1.5 percent effective August 16, 2025,
- A 2.5 percent Hourly Pay Plan pool as the city transitions hourly employees back to an annual salary review, and
- A 2.5 percent structural increase adjustment to the Hourly Pay Plan ranges, effective July 5, 2025, which adjusts the minimum and maximum rates of pay grades to ensure the plan remains competitive in the marketplace.
Benefits
§ Increase active employee medical plan weekly premiums by $1 to $32 based on plan and tier.
§ Increase non-Medicare-eligible medical plan monthly premiums for retirees with 20 years of service by $2 to $69 based on plan and tier.
§ Provide the City Manager the authority to make medical and prescription drug plan and wellness incentive changes within the overall health insurance budget.
§ Provide the City Manager the authority to approve vendor, rate, plan options and plan design changes for the Medicare-eligible Retiree Health Plans.
§ Provide the City Manager the authority to renegotiate the current contracts, or if the contracts are rebid, to select vendors, execute the contracts and future contract amendments and determine plan design within the selected vendors for Medical Coverage, Dental, Health Clinic, Employee Assistance Program, Flexible Spending Accounts, Health Savings Accounts, Health Advocacy, Short-Term and Long-Term Disability, Family Medical Leave Administration, Benefits Administration, Vision, Stop Loss insurance, Life Insurance, Prescription Drug Plan, Benefits Consulting Services, voluntary benefits, and wellness services.
I. Approve Outside Agency and Municipal Service District Contracts
§ This action authorizes the City Manager to negotiate and execute contracts related to outside agencies and municipal service districts. The outside agency and Municipal Service District contracts are outlined below.
Arts and Culture Sector
§ Foundation For The Carolinas (FFTC) will administer the city’s FY 2026 allocation of arts and culture funding totaling $11,000,000 from the General Fund. This allocation includes:
- $8,850,000 to support the organizations that have historically received annual operating support;
- $2,000,000 to be distributed to Arts, Sciences and Cultural Council (ASCC) via FFTC for grantmaking that supports individual artists, creatives, collaboration across the ecosystem, of this amount, up to 15 percent is eligible for administrative costs that support the Arts and Culture Plan; and
- $150,000 in an administrative fee to FFTC for their service as the fiscal agent and administrative partner.
§ Additionally, FFTC will provide $300,000 of excess funds raised for the Infusion Fund to the Charlotte Museum of History for the upcoming exhibit, The American Revolution, the Augmented Exhibition. This is in addition to the city’s funding of $50,000 for the exhibit.
FY 2026 General Fund Discretionary Financial Partners
§ Alliance Center for Education (formerly Bethlehem Center): $90,000
§ Greater Enrichment Program: $200,000
§ Knothole Foundation: $75,000
§ My Brother’s Keeper Charlotte-Mecklenburg: $50,000
§ Safe Alliance: $397,038
FY 2026 One-Time Discretionary Financial Partners
§ Big Brothers Big Sisters of Central Carolinas: $100,000
§ Carolina Metro Inc.: $50,000
§ Carolina Youth Coalition: $100,000
§ Carolinas Asian American Chamber of Commerce: $100,000
§ Charlotte Museum of History (operating): $100,000
§ Crisis Assistance Ministry: $825,000
§ DreamKey Partners: $231,000
§ For The Struggle, Inc.: $100,000
§ Hearts for the Invisible: $100,000
§ Housing Collaborative: $200,000
§ Just Do It Movement! Inc.: $32,000
§ National Institute of Minority Economic Development - The Women’s Business Center: $50,000
§ Our Daily Bread Foundation: $70,000
§ PowerUp USA: $100,000
§ Prospera NC: $50,000
§ Que-OS/BOOM Charlotte: $90,000
§ Roof Above: $100,000
§ The Boost Pad: $50,000
§ The Males Place, Inc.: $100,000
§ The Save Our Children Movement, Inc.: $34,000
§ United Way of Greater Charlotte: $130,000
FY 2026 Dedicated Revenue Sources Financial Partners
§ Municipal Service District (MSD) Contracts
§ The tax rates remain unchanged in MSDs #1 and #4 (Charlotte Center City Partners), #5 (University City Partners), and #6 (SouthPark Community Partners). Charlotte Center City Partners’ FY 2026 Budget for MSDs #2 and #3 includes tax rate increases of 0.82¢. MSD #2 increases from 2.18¢ to 3.00¢ per $100 assessed valuation and MSD #3 increases from 3.32¢ to 4.14¢ per $100 assessed valuation. These increases are to support the Uptown Vibrancy Collaborative, which focuses on public safety, improving perception, and increasing economic vibrancy.
- Charlotte Center City Partners ($8,137,294)
§ District 1: Center City
- Tax Rate remains the same, 1.28¢
- FY 2026 Contract: $1,929,137
§ District 2: Center City
- Tax Rate increased, 3.00¢
- FY 2026 Contract: $1,859,722
§ District 3: Center City
- Tax Rate increased, 4.14¢
- FY 2026 Contract: $2,605,759
§ District 4: South End
- Tax Rate remains the same, 2.80¢
- FY 2026 Contract: $1,742,675
- University City Partners
§ District 5: University City
- Tax Rate remains the same, 2.62¢
- FY 2026 Contract: $1,613,953
- SouthPark Community Partners
§ District 6: SouthPark
- Tax Rate remains the same, 3.81¢
- FY 2026 Contract: $1,794,542
§ Charlotte Center City Partners: Additional support from Tourism Fund for special events (up to $500,000)
§ Charlotte Regional Visitors Authority (CRVA): $23,978,293
- CRVA - Film Commission: $150,000
Federal Grant Funded and Other Sources Financial Partners
§ DreamKey Partners (formerly Charlotte-Mecklenburg Housing Partnership, Inc.) - Affordable Housing: $1,300,000
§ TreesCharlotte funded through Tree Canopy Care funds: $250,000
FY 2026 Public Art Work Plan
§ The Arts, Sciences, and Cultural Council administers the Public Art Program, which is outlined in Chapter 15 Article IX of the Charlotte City Code.
§ The FY 2026 CIP Public Art allocations include:
- General Capital Investment Plan: $198,600,
- Aviation Capital Investment Plan: $393,451, and
- Charlotte Water Capital Investment Plan: $175,000.
School Resource Officer Program for Charlotte-Mecklenburg Schools
§ The Charlotte-Mecklenburg Police Department (CMPD), through the School Resource Officer (SRO) Program, has a security presence at Charlotte-Mecklenburg Schools (CMS) middle and high schools in their jurisdiction.
§ The SROs provide police services to their respective school communities as their primary assignment.
§ CMPD will provide approximately 57 Police Officers and three Sergeants to CMS for the 2025 - 2026 school year.
§ This action authorizes the City Manager to negotiate and execute the FY 2026 contract with CMS for continued funding for these SRO positions.
One-Time Outside Agency Programmatic Support
§ Provide funding for the Helping Hands Foundation: $300,000.
§ Funding to support the 2025 NAACP Convention: $200,000.
§ Provide supplemental funding to the Charlotte Museum of History for the upcoming exhibit, The American Revolution, the Augmented Exhibition, in addition to the $300,000 from the FFTC: $50,000. This funding will come from the FY 2026 Non-Departmental - Contributions and Grants.
J. Internal Service Funds Financial Plans Resolution
§ Adopts the Financial Plans for the city’s Internal Service Funds.
§ The three Funds include the Employee Health & Life Fund, Risk Management Fund, and Fleet Management Fund. These three Funds predominately benefit other city funds and departments or other governments.
§ City Council has typically authorized the Financial Plans for these funds as part of the Budget Ordinance. This action excludes the Financial Plans from the Budget Ordinance, as authorized by state statute, with adoption granted through the approval of a separate Resolution.
K. Approve Other Budget Items
§ Various updates to the schedule of regulatory and non-regulatory user fees.
§ The budget ordinance included is the city’s annual budget operating ordinance. Sections 1 through 13 of this Ordinance reflect the items included in the FY 2026 Budget and all Council adjustments.
§ The remainder of the Annual Ordinance (Sections 14 through 95) serves to make budgetary corrections to the current fiscal year for technical, accounting, and other adjustments necessary prior to the fiscal year’s end.
Attachments
Attachment(s)
Annual Budget Ordinance
Resolution by MTC
FY 2026 Charlotte Water Revenue Manual
FY 2026 Compensation and Benefits
Internal Service Funds Resolution