Title
Fiscal Year 2027 Operating Budget and Fiscal Years 2027-2031 Capital Investment Plan
Action
Action:
Adopt the Fiscal Year (FY) 2027 Appropriations and Tax Levy Ordinance, the FY 2027 Compensation and Benefits Recommendations, and other items related to the Annual Budget Ordinance adoption:
A. The FY 2027 Operating Appropriations and Tax Levy Ordinance,
B. The FY 2027-2031 Capital Investment Plan,
C. The FY 2027 General Solid Waste Fee,
D. The FY 2027 Storm Water Services Fees,
E. The FY 2027 Transit Operating Budget, FY 2027 Transit Debt Service Budget, and FY 2027-2031 Transit Capital Investment Plan which was approved by the Metropolitan Transit Commission on April 22, 2026,
G. The FY 2027 Charlotte Water Rates,
H. The FY 2027 Compensation and Benefits Plan and associated Human Resources contracts,
I. Outside Agency and Municipal Service District contracts,
J. Municipal Service District 5 Boundary Expansion,
J. Internal Service Funds Financial Plans Resolution, and
K. Other budget items.
Body
Council Resource(s):
Malcolm Graham, Budget, Governance, and Intergovernmental Relations Committee
Staff Resource(s):
Marcus Jones, City Manager
Marie Harris, Strategy and Budget
Matt Hastedt, 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 2027 Budget presented on May 4, 2026, and subsequent City Council budget adjustments.
§ The FY 2027 Budget is structurally balanced and focuses on five City Council Strategic Priorities: Well-Managed Government; 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 5, March 5, and April 6, 2026, and two Budget Workshops on February 23 and March 23, 2026.
§ Public budget engagement occurred through an in-person Budget 101 event on March 17; a virtual “Budget Listening Session: Connecting Capital Investments and Strategic Initiatives” on March 31; and a budget public input survey that was available from March 4 through April 6. There was also a Public Hearing on the Proposed Budget on May 11.
§ The Mayor and City Council met on May 18 and June 1, 2026, to discuss budget adjustments for consideration to the Proposed FY 2027 Budget. Three budget adjustments were approved by City Council for inclusion in the FY 2027 Budget.
§ FY 2027 General Fund and FY 2027 General Capital Investment Plan (CIP).
- Is a structurally balanced budget with a two-year lens that:
§ Preserves core services,
§ Advances Public Safety,
§ Invests in transformational Mobility+, and
§ Maintains reserves.
- Includes a 1.89¢ property tax increase dedicated to enhancing Public Safety.
- Continues Charlotte’s achievement of affordability for government services, ranking lowest among North Carolina’s largest cities with a population of 250,000 or above.
- Raises minimum pay to $25 per hour for 40-hour per week, non-temporary general city employees.
- Promotes recruitment and retention of Police and Fire employees in the Public Safety Pay plan with across the board pay increases, that are above typical pay plan years.
- Includes $12.4 million in funding for police and fire vehicle replacements.
- Adds an additional 35 cars for the police take home vehicle program.
- Includes $2.3 million to add Engine 46 at Miranda Road Infill Station.
- Adds funding for two civilian support positions to improve fire training and response times.
- Reserves funding for a commercial burn building for fire training and moves forward on a schedule to construct new or replacement Fire facilities every two years.
- Provides funding for a new helicopter hangar for Police.
- Provides funding to advance and complete the Animal Care and Control Satellite Adoption Center project.
- Invests in small businesses and neighborhoods with $600,000 for Business District Organizations and Main Street programs, $500,000 for Neighbors Building Neighborhoods, $500,000 for the Business Matching Grant program to revitalize business corridors.
- Elevates engagement by creating a new partnership with Foundation for the Carolinas to enhance engagement, adding personnel (one International Relations Manager and one Administrative Officer Senior) and additional operating funding to support international relations, and strengthening the Office of Constituent Services team to advance community engagement with seven positions (six support specialists and one communications specialist).
- Invests in youth with $500,000 to support youth internships at the city in FY 2027 and a $1.5 million commitment to the expanded Road to Hire program.
- Includes new sales tax revenue authorized by the Projects for Advancing Vehicle-Infrastructure Enhancements (PAVE) Act, which is projected to generate $100 million in FY 2027 to be used for roadway system projects.
- Creates a new Mobility PAYGO Program to provide a sustained source of cash funding for smaller-scale transportation programs, including $7 million to support the acceleration of early-stage future transportation projects.
- Matches the historic 2024 Transportation and Neighborhoods Bonds at $300 million, which will include:
§ $60 million for Strategic Investment Areas (SIAs), which will be expanded to the Corridors of Opportunity;
§ $22 million for Vision Zero projects;
§ $50 million for sidewalks;
§ $10 million for bicycle facilities;
§ $2 million for a new Orphan Roads program; and
§ $100 million to deliver seven mobility projects by 2030 (Big Moves).
- Invests $5.95 million for Mobility+ programming to proactively build workforce and small business capacity alongside increased capital transportation investments.
- Matches the historic 2024 Housing Bond plus a one-time bump of $25 million to support anti-displacement efforts for the largest housing bond in city history at $125 million.
Recommended Changes to the Proposed FY 2027 Budget from the June 1 City Council Budget Straw Votes Meeting
§ During the June 1 Budget Straw Votes Meeting, City Council approved the following adjustments:
- Provide an additional three percent pay increase for eligible Fire employees in the Public Safety Pay Plan for a total pay increase of 10 percent across the board;
- Provide an additional position and additional operating funding for international relations; and
- Provide funding for consulting services and/or a partnership to develop a Land Use and Transportation Model, which will be scoped by the Transportation, Planning, and Development Council Committee.
§ These adjustments are funded by reducing funding for Public Safety Technology Investments, reducing the proposed increases to Fire’s overtime budget, eliminating three new proposed Fire Field Technician positions, and eliminating the proposed Community Investment Contingency and reducing the General Fund fuel contingency.
A. Adopt the FY 2027 Operating Appropriations and Tax Levy Ordinance
§ The total FY 2027 budget is $4.49 billion net of transfers, with $1.24 billion for personnel and benefits expenditures, $1.03 billion for operating expenditures, $1.86 billion for capital expenditures, and $372.1 million for debt service expenditures. The General Fund operating budget totals $1.04 billion.
§ The total budget includes the following key revenues:
- A property tax rate of 29.30¢ per $100 of assessed valuation, a 1.89¢ increase from FY 2026. The FY 2027 assessed value is estimated at $237.1 billion, with an estimated collection rate of 99.0 percent.
- The FY 2027 Water and Sewer Fee is proposed to increase by 5.74 percent for the typical homeowner, which is an average increase of $4.41 per month.
- The FY 2027 Storm Water Services Fee is proposed to increase by 4.44 percent. The typical homeowner would experience a $0.48 per month increase.
- The Solid Waste Fee is increasing by approximately $0.41 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 2026 to FY 2027.
B. Adopt the FY 2027-2031 Capital Investment Plan
General CIP
§ The General CIP is supported by a portion of the 29.30¢ property tax as follows:
- 3.06¢ for the Municipal Debt Service Fund, and
- 1.50¢ for the Pay-As-You-Go (PAYGO) Fund.
§ The FY 2027-2031 five-year General CIP totals $1.72 billion 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 2027-2031 five-year nongeneral CIPs include:
- Aviation totals $1.98 billion and is funded by $1.29 billion in revenue bonds, $379.1 million in Aviation PAYGO, $39.2 million in passenger facility charges, $228.2 million in federal grants, and $46.5 million in state grants.
- CATS totals $1.24 billion and is funded by $481.7 million in CATS PAYGO, $380.8 million in debt issuance, $354.4 million in federal grants, $8.0 million state grants, and $15.5 million in other sources.
- Charlotte Water totals $2.57 billion and is funded by $1.03 billion in Charlotte Water PAYGO and $1.54 billion in water and sewer revenue bonds.
- Storm Water totals $423.0 million and is funded by $170.0 million in revenue bonds and $253.0 million in Storm Water PAYGO and program income.
C. Amend the General Solid Waste Fee
§ The annual Solid Waste Fee is increased from $109.90 to $114.77 for residential dumpster service and from $120.30 to $136.55 for residential curbside service. The increase will generate additional revenue to cover a portion of FY 2027 increases in Solid Waste operations. The additional revenue brings the estimated cost recovery for curbside residential service to 42.1 percent with the goal to reach 50 percent cost recovery by FY 2029.
§ These changes become effective on July 1, 2026.
- The revised fee will be included in the tax bills that will be mailed to property owners in July 2026 and are due by September 1, 2026.
D. Approve the FY 2027 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 2027 Storm Water Services Fee changes include:
- Detached single-family homes with less than 2,000 square feet of impervious area changes from $7.34 per month to $7.66 per month in FY 2027;
- Detached single-family homes with 2,000 to less than 3,000 square feet of impervious area changes from $10.82 per month to $11.30 per month in FY 2027;
- Detached single-family homes with 3,000 to less than 5,000 square feet of impervious area changes from $16.00 per month to $16.70 per month in FY 2027;
- Detached single-family homes with 5,000 square feet or more of impervious area changes from $26.46 per month to $27.62 per month in FY 2027; and
- Commercial and multi-family per acre of impervious area changes from $190.98 per month to $199.38 per month in FY 2027.
E. Adopt the FY 2027 Transit Operating Budget, FY 2027 Transit Debt Service Budget, and FY 2027-2031 Transit Capital Investment Plan which was approved by the Metropolitan Transit Commission on April 22, 2026
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 2027 Transit Operating and Debt Service Budgets and the FY 2027-2031 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 2027 Budget includes no proposed fare increases and no proposed new fees.
§ The FY 2027 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. Adopt the FY 2027 Charlotte Water Rates
§ Water and sewer fees are necessary to maintain current infrastructure, accommodate growth, and respond to changing regulatory requirements.
§ FY 2027 rate changes include:
- Typical resident water and sanitary sewer availability fees at $12.53 per month, an increase of $0.77 from FY 2026;
- Typical resident water and sanitary sewer fixed fees at $13.50 per month, an increase of $0.26 from FY 2026;
- The typical monthly total water and sanitary sewer bill for residential customers is estimated to be $81.21 in FY 2027, an increase of $4.41 per month; and
- The typical bill assumes 4.488 gallons, or six 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.
G. Adopt the FY 2027 Compensation and Benefits Plan and Associated Human Resources Contracts
Compensation
§ This action authorizes the City Manager to implement the recommendations from the FY 2027 Compensation and Benefits Plan and subsequent adjustments by Council at the June 1 Budget Adjustments meeting including, but not limited to the following items:
- In the Public Safety Pay Plan:
§ A market adjustment to the pay steps of 10 percent, effective July 4, 2026, for Police and Fire.
§ Qualifying military service may be combined with a two-year degree to be eligible for a total 10 percent incentive equal to the incentive provided for a four-year degree, and
§ Deferral of step progressions until FY 2028.
- In the General Employee Pay Plan:
§ City minimum pay rate increase to $25 per hour or $52,000 per year for all non-temporary, 40-hour per week employees effective July 4, 2026;
§ An across-the-board pay increase of 1.5 percent for hourly employees effective July 4, 2026;
§ Merit increase pool funded at 2.5 percent for hourly employees;
§ Merit increase pool funded at four percent for salaried employees, and
§ Unified salary structure for salaried and hourly employees effective July 4, 2026, to establish consistent pay grades across the organization, support transparent career progression and internal mobility, and provide administrative efficiency. The new structure will change the minimum and maximum rates for pay grades to ensure the plan remains competitive in the marketplace.
Benefits
§ Increase active employee medical plan weekly premiums by $1 to $20 based on plan and tier.
§ Maintain non-Medicare-eligible medical plan monthly premiums currently in Plan Year 2026 for all plans and tiers for retirees with 20 years of service.
§ 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.
H. 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 2027 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.
FY 2027 General Fund Discretionary Financial Partners
§ Carolina Youth Coalition: $125,000
§ Community Culinary School: $38,830
§ Crisis Assistance Ministry: $90,000
§ Housing Collaborative: $200,000
§ ParentChild+: $190,000
§ Per Scholas, Inc.: $120,000
§ Roof Above: $127,182
FY 2027 Dedicated Revenue Sources Financial Partners
§ Municipal Service District (MSD) contracts: $12,661,183
- The tax rates remain unchanged in MSDs 1, 2, 3, 4 (Charlotte Center City Partners), and 6 (SouthPark Community Partners). University City Partners’ FY 2027 Budget for MSD 5 includes a tax rate increase of 1.18¢ per $100 assessed valuation. This increase is to support enhanced services to business and residents in MSD 5 including: an ambassador program to address safety and cleanliness; improved business and community programming; beautification and wayfinding signage and projects; and strategic planning to address growth.
§ Charlotte Center City Partners
- District 1: Center City
§ Tax rate remains the same, 1.28¢
§ FY 2027 contract: $1,940,866
- District 2: Center City
§ Tax rate remains the same, 3.00¢
§ FY 2027 contract: $1,796,992
- District 3: Center City
§ Tax rate remains the same, 4.14¢
§ FY 2027 contract: $2,749,904
- District 4: South End
§ Tax rate remains the same, 2.80¢
§ FY 2027 contract: $1,922,798
§ University City Partners
- District 5: University City
§ Tax rate increase, 3.80¢
§ FY 2027 contract: $2,442,066
§ SouthPark Community Partners
- District 6: SouthPark
§ Tax rate remains the same, 3.81¢
§ FY 2027 contract: $1,808,558
§ Charlotte Center City Partners: Additional support from Tourism Fund for special events (up to $500,000)
§ Charlotte Regional Visitors Authority (CRVA): $24,587,022
- CRVA - Film Commission: $150,000
- Additional funding from Tourism Fund to support Atlantic Coast Conference events: $200,000
Federal Grant Funded and Other Sources Financial Partners
§ Crisis Assistance Ministry: $425,000 in PAYGO funding for Innovative Housing
§ TreesCharlotte funded through Tree Canopy Care funds: $250,000
§ Safe Alliance: $397,000 in PAYGO funding for Crime Reduction
FY 2027 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 2027 CIP Public Art allocation includes $288,000 in the General CIP.
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 2026-2027 school year.
§ This action authorizes the City Manager to negotiate and execute the FY 2027 contract with CMS for continued funding for these SRO positions.
Public Access Television Programming
§ The Charlotte-Mecklenburg Public Access Corporation is a private non-profit corporation that operates the city’s public access channel and receives 6.6 percent of the city’s share of video tax revenue received from the State of North Carolina.
§ In FY 2027, the city will increase CMPAC’s share of the video tax revenue to 10 percent to account for increased operating costs.
I. Municipal Service District 5 Boundary Expansion
§ This action approving the expansion of MSD 5 (University City) in accordance with NC General Statute Section 160A-538.
§ The current MSD 5 boundary follows property lines and includes properties between the Highway 29/49 connector off Interstate 85 on the south, the rear property line of parcels on the west side of Mallard Creek Road on the west, Mallard Creek Church Road and some adjacent commercial properties on the north, and the rear property line of parcels on the east side of Highway 49 on the east.
§ State law outlines several guidelines for determining boundaries of municipal service districts. Properties within the MSD 5 boundaries must satisfy at least one of the following guidelines:
- Location in or surrounding existing or redeveloping concentrations of retail, office, or significant employment-generating uses,
- Surrounding major institutional uses, such as a university or hospital, and
- Location within 1,500 feet of major transportation and transit corridors, except for residential parcels which must be within 150 feet.
§ The proposed MSD 5 boundary expansion extends the existing district north and northeast to include additional properties that are contiguous to, and functionally part of, the University City Town Center, including:
- Properties beginning at the current northern edge of the district near JW Clay Boulevard and extending northward to include areas along and south of Mallard Creek Church Road between North Tryon Street on the west and Mallard Creek Road on the east;
- Properties east of Mallard Creek Church Road including those bounded by University City Boulevard and the Mecklenburg County line, following parcel lines and natural edges where applicable; and
- Properties located north of Interstate 85 in the vicinity of Pavilion Boulevard and surrounding parcels, while generally limiting further northern extension to areas consistent with existing development patterns and roadway boundaries.
- The proposed boundary continues to follow property lines and major transportation corridors, including North Tryon Street, JW Clay Boulevard, Mallard Creek Church Road, Mallard Creek Road, Interstate 85, and University City Boulevard, creating a contiguous and cohesive district that aligns with the primary commercial, retail, and economic activity areas of University City.
§ Council will be asked to consider adoption of an ordinance to expand the MSD 5 boundary at the June 22, 2026, Business Meeting.
§ The boundary expansion would take effect July 1, 2026.
J. Internal Service Funds Financial Plans Resolution
§ This action adopts the Financial Plans for the city’s Internal Service Funds.
§ The three funds include the Employee Health and Life Fund, Risk Management Fund, and Fleet Management Fund. These three funds predominately benefit other city funds and departments or other governments.
§ 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 2027 Budget.
- Sections 14 through 49 of this Ordinance serve to make budgetary corrections to the current fiscal year for technical, accounting, and other adjustments necessary prior to the fiscal year’s end.
- Sections 50 through 87 of this Ordinance contain related authorizations.
Attachments
Attachment(s)
Annual Budget Ordinance
Resolution by MTC
FY 2027 Compensation and Benefits
Internal Service Funds Resolution