City Manager Charles Penny presented the City of Statesboro’s proposed FY2026 budget during a work session Tuesday May 13, laying out a $64.7 million financial plan that holds the line on taxes, boosts employee compensation, and plugs a major hole in fire services funding using one-time internal loans.
Penny described the budget as “challenging” to assemble, largely due to the loss of $2.3 million in revenue from the dissolved County five mile fire district tax. That money previously supported the Statesboro Fire Service Fund, which now faces a shortfall heading into FY2026. To fill the gap without layoffs, service cuts, or tax hikes, the city is proposing to borrow a combined $3.18 million from three of its enterprise funds:
- $1.8 million from water and sewer
- $680,000 from natural gas
- $707,000 from solid waste collection
These funds will be repaid over 10 years.
“You can only do this one time,” Penny told the council. “But we can afford to do it now, and I completely recommend that you do. The alternative would’ve meant rolling back the employee pay plan or cutting performance raises, and that would undo all the progress we’ve made.”
The proposed fire fund budget for FY2026 is $8.03 million. That includes plans to move forward with Fire Station 3, now expected to open July 1, 2026, off Brannen Street. Construction costs are not included in the FY26 budget, but operating costs are projected for future years. The city is also finalizing a feasibility study for a potential fire services fee, which will be presented before the end of June. No action has been taken yet.
Penny said the city now employs 350 out of 360 authorized positions and has reached full staffing in the police department with 83 employees, four above the approved count. “First time in my history we’ve been that full,” he said.
Budget Overview
The total budget across all funds is $64.7 million, a 9% increase over FY2025. However, due to the absence of federal ARPA funds, the citywide budget shows a 6% overall decrease compared to last year.
The General Fund, which covers most personnel and core services—climbs to $27.3 million, up from $25.3 million. No new positions are proposed. A 4% cost-of-living pay adjustment is included, alongside continued pay-for-performance raises, both part of a compensation strategy reviewed by Condrey & Associates. Health insurance premiums will remain flat.
Penny said 64.8% of the general fund goes toward salary and benefits. Expenditure increases include $1.2 million for compensation, $95,000 for police cloud storage, $60,000 for tasers, $70,000 in credit card processing fees, and $90,000 for street lighting costs.
Despite rising costs, Penny said the city remains in strong financial shape. “The city’s budget is financially sound,” he said. “We have strong reserves, continued growth in our property values, and we’re not relying on revenue from developments that haven’t come online yet.”
Revenues, Taxes, and Growth
The budget assumes no property tax increase, and the millage rate will remain at 8.625 mills. However, the city is not recommending a rollback, meaning increased property values will generate more revenue. Statesboro’s property tax digest has grown by 12%, and general fund revenues are projected to rise by 7.5%.
Penny noted that for every mill assessed, the city brings in roughly $1.1 million. That compares to $3.5 million per mill for Bulloch County and the Board of Education, due to their broader tax base.
The city is budgeting $17.4 million in tax revenue, including $9.6 million in property taxes, both up from FY25 totals of $16.2 million and $9.1 million respectively.
Though over 4,500 residential units have been approved for development, and roughly 2,500 are currently under construction, none of that anticipated tax revenue is factored into this budget. “We didn’t count it, but next year we can,” Penny said.
Utility and Fee Adjustments
To keep up with operating costs, the city is proposing a 10% increase in several service fees:
- Water and Sewer (rates not increased since 2012)
- Stormwater (raising the residential rate from $5 to $5.50)
- Natural Gas
- Solid Waste Collection and Disposal
- Police and Fire Extra Duty Fees
- Aid to Construction Fees
- Credit Card Convenience Fee
Water and sewer rates will be discussed further at the next work session, including how revenue will support a future 4 million gallon-per-day wastewater treatment plant. That project is needed to support new development and ease strain on the city’s current 45-year-old facility.
Capital Projects and Priorities
Among the top infrastructure priorities:
- Sewer installation in underserved neighborhoods like Ramble Road and Quail Run
- Continued housing rehabilitation, with new CDBG grant applications expected
- Sidewalk and intersection improvements across major corridors like Stockyard Road and Brannen Street
- Expansion of the inert landfill, following a successful property acquisition this year
The city plans to use $928,755 from the general fund reserve to balance the budget—well below the $1.6 million budgeted last year—and still expects to maintain its 25% reserve target. Statesboro is also using $1 million in interest earnings to support the budget, but Penny warned that interest income won’t be reliable if rates fall.
A public hearing is scheduled for June 3, with final adoption set for June 17. The full budget document will be posted online and made available at City Hall.
