Graham city council members agreed by consensus during a budget session Monday afternoon to increase fees for a number of city services for the upcoming fiscal year that begins July 1.
The council mostly agreed that higher fees are needed to cover the city’s actual costs for services but clashed with mayor Chelsea Dickey over her requests for additional information about the budget for the 2026-27 fiscal year.
For example, Dickey had asked at a previous budget work session for an estimate of the potential cost for the city to provide all employees with the same 17.1-percent retirement contribution that police and firefighters receive, in addition to requesting such things as the city’s actual costs for contracted services.
City manager Megan Garner informed the council Monday afternoon, during its second budget work session since mid-May, that it’s “unlawful” to contribute a higher percentage to the retirement benefits for non-sworn employees than what’s prescribed in state law.
This week, Dickey expressed concerns that increasing fees for boat, kayak, and canoe rentals at Graham-Mebane Lake (which a majority of council members agreed by consensus to increase by $5 across-the-board) and fees for garbage and recycling collection could further strain lower-income residents and small businesses.
Garner unveiled her $44 million proposed budget – which would increase the city’s property tax rate by 3 cents, to 0.3399 cents per $100 of valuation – at last month’s council meeting. The proposed budget represents an overall increase of $8.2 million (22.9 percent) in the city’s budget ($35.8 million) for the current fiscal year that ends June 30.
Garner previously confirmed for The Alamance News that several years of successive property tax increases will be needed to fund the city’s capital improvement plan (CIP), in addition to the 3-cents tax increase planned for 2026-27.
The council is currently scheduled to vote to adopt a budget for the 2026-27 fiscal year at its next monthly meeting on Tuesday, June 9.
Though the council agreed this week by consensus, over Dickey’s objection, to strike $2.3 million in annual capital funding that had been earmarked for designing the first phase of Graham Regional Park from the 2026-27 budget, it won’t impact the 3-cents increase in the municipal property tax rate that’s planned for the upcoming fiscal year, Garner told the newspaper following the work session.
[Story continues below summary of council decision to eliminate $2.3 million earmarked for designing the first phase of Graham Regional Park, an expenditure for which Dickey has pressed throughout earlier budget discussions.]
“We need a fire station more than a park.”
– Graham city councilman Jim Young
“One’s a necessity; one’s a luxury, so I agree.”
– Graham city council member Bonnie Whitaker
“I think we’ve identified how we can do all of them [referring to a debt capacity analysis that was developed by Davenport Public Finance of Richmond, Virginia to identify funding sources for approximately $75 million in big-ticket capital improvement projects that city officials say will be needed by 2031]. Davenport was wanting us to do $4.1 million for the design services. . . I don’t think it’ll slow down the fire station, but that’s my opinion.”
– Graham mayor Chelsea Dickey
“That’s less money we’ll have to borrow.”
– Graham city councilman Ricky Hall
The city manager told the newspaper that the council had, instead, decided to redirect the $3.1 million in “pay-go” capital funding to the construction of a fire substation, which she said is currently estimated to cost between $6 and $8 million.
“We need a fire station more than a park,” councilman Jim Young said during the work session Monday afternoon.
“One’s a necessity; one’s a luxury, so I agree,” said council member Bonnie Whitaker.
“I think we’ve identified how we can do all of them,” Dickey said, referring to a debt capacity analysis that was developed by Davenport Public Finance of Richmond, Virginia to identify funding sources for approximately $75 million in big-ticket capital improvement projects that city officials say will be needed by 2031. “Davenport was wanting us to do $4.1 million for the design services. . . I don’t think it’ll slow down the fire station, but that’s my opinion.”
Mayor pro tem Ricky Hall said, “That’s less money we’ll have to borrow.”
Council majority wants higher sanitation fees for downtown businesses
Garner told the council Monday afternoon that the fees for trash and recycling collection aren’t fully covering the city’s costs for those services.
According to her budget message, the city manager has recommended increasing the total fee for customers who receive both garbage and recycling collection by $2 per month, from $14.50 to $16.50 for each rolling trash/recycling can, in 2026-27.
However, several council members said Monday that they would prefer to have a higher fee structure for recycling and garbage collection services in the downtown business district because those businesses tend to generate about three times more waste than residential customers, based on Garner’s description.
“Throughout this whole thing it’s like Graham is getting the short end of the stick on everything; hopefully when Graham becomes this flush with money paradise, we can revisit this and lower everything for everybody. I don’t want to put a burden on small businesses, but small businesses are kind of being a burden on the sanitation service.”
– Graham city councilman Jim Young
Garner told the council that the additional revenue from sanitation fees could eventually offset the costs to replace a garbage truck that she said has been described as “stinky.”
“Throughout this whole thing it’s like Graham is getting the short end of the stick on everything; hopefully when Graham becomes this flush with money paradise, we can revisit this and lower everything for everybody,” Young said during the work session. “I don’t want to put a burden on small businesses, but small businesses are kind of being a burden on the sanitation service.”
“I hate it, too, but I mean that’s not even going to bring us up to where we were last year,” Whitaker said, before turning to Dickey and asking, “Chelsea, what’s your vote?”
“It’s a consensus, not a vote,” Dickey said. “I agree with Jim, but it does feel like a dollar here, a dollar there…I can go along with it; it’s three times the amount of service and only $3 more than the new residential fee. People don’t like stinky, and it’s going to get us closer to getting new trucks.”
Whitaker said, “So you’re a no. It still matters. I just want to know for the record, for our clerk; she’s got to have names.”
Higher development and permitting fees on the horizon
Meanwhile, the council also agreed by consensus Monday afternoon to increase 11 other types of fees related to development reviews and permits.
Some of the proposed higher fees for development and permitting include: major subdivision preliminary plat, from $10 to $20 per lot; requests for rezoning from a flat rate of $200 to $300; requests for special use permits from $300 to $400; major subdivision final plat review from $50 to $125; minor subdivision final plat reviews from $25 to $75; first and second reviews of non-residential site plans by the city’s technical review committee (TRC) from $250 to $350; and TRC reviews for non-residential site plans from $100 to $150.
Assistant city manager Aaron Holland told the council Monday afternoon that he thought the higher fees for developmental reviews will encourage developers “to come to the table with better projects.”
Whitaker said, “They really want you to do the work for them. . . I’m okay with going up [by] $100. It seems to me that, the more reviews you require, the more it should go up.”
Holland explained that fees for TRC reviews typically decrease with each subsequent submittal because “the review gets shorter…it’s more pinpointed at the third or fourth [review].”
Dickey had advocated for continuing the city’s current practice of not charging an application fee for a “major certificate of appropriateness (COA)” and temporary use permit but was overridden by other council members.
Hall said he wanted to charge $25 for a major COA application; the council ultimately landed on a new $10 application fee for a major COA.
The council also agreed to levy a new fee of $25 for temporary outdoor sales. “It’s no inspection [involved],” Holland told the council. “It’s really permission.”
Young said, “You’ve got small businesses paying taxes, paying rent – these vendors come in and basically do it for free. I don’t agree with that. . . I think it should be at least $25. If you’ve got someone selling crystals or jewelry, and they can’t afford to pay $25, then maybe they need to rethink their business plan.”
‘It feels a little bit nitpicky’
At times throughout Monday’s work session, council members clashed with the mayor over her requests for information related to the proposed budget for the upcoming fiscal year.
[Story continues below quotes from council members, mayor.]
“Am I the only one who received an email from the city manager prior to the first budget work session, if we had any questions about the budget, to email them and they would get back to us and have them answered by the time that meeting happened? I took advantage of that and Megan answered all those questions. I don’t understand why you [addressing mayor Chelsea Dickey] couldn’t have emailed all this stuff to Megan because it feels a little bit nitpicky.
“. . . It feels a little bit like showboating.”
– Graham city councilman Jim Young
“Again we were told to email our questions; [I] guess everybody but you [addressing Graham’s mayor] did that.”
– Graham city council member Bonnie Whitaker
“. . . If the past two years of the audit of our books is any illustration of how well we’re operating, that should . . .our last audit, we came in within budget. In my mind you’re asking questions, almost looking for a gotcha.”
– Graham city councilman Bobby Chin
“I’m not looking for a gotcha. There’s a lot of moving pieces in this budget, and I’m trying to understand.
“. . . I will take that I’m green, and I’m finding my way. I’m a newly- elected official and finding my way. But I think it’s very important [to] understand, comprehensively, the budget that we’re passing because it impacts our residents, employees, tax dollars, spending, and the operations of the city. In my opinion, it’s important to know all the P’s and Q’s.”
– Graham mayor Chelsea Dickey
“Am I the only one who received an email from the city manager prior to the first budget work session, if we had any questions about the budget, to email them and they would get back to us and have them answered by the time that meeting happened?” Young asked Monday afternoon. “I took advantage of that and Megan answered all those questions. I don’t understand why you couldn’t have emailed all this stuff to Megan because it feels a little bit nitpicky.”
For example, Dickey had requested a side-by-side comparison of departmental funding for 2024-25 and 2025-26, plus the manager’s recommendation for 2026-27 (see accompanying chart for a breakdown of departmental spending within the general fund and utilities fund).
[Story continues below chart Graham’s mayor had asked city manager to provide.]
Among other expenses that Dickey requested were: the city’s fees for hiring an outside law firm to defend the city against a lawsuit that Mebane has filed against Graham over Mebane’s share costs to upgrade Graham’s wastewater treatment plant; and the cost for a water and sewer development fee analysis by Hazen and Sawyer, a consulting firm in Raleigh.
“What do you mean by consulting fees?” Garner asked Dickey.
Dickey said she wanted to know the “full amount” that the city has spent during the current fiscal year for “all of the attorneys, any contracted attorneys, all of the engineering costs we have.”
Based on information presented at the outset of Monday’s work session, the city has paid Davenport Public Finances $77,299.84 for its services since the current fiscal year began on July 1, 2025. No amount was given during Monday’s work session for the services provided by Hazen and Sawyer.
Dickey reminded her fellow council members that most of her questions had arisen during the previous budget work session on May 20. “I talked to Megan, and she said that a report wasn’t emailed out, we were just going to go back through the questions from last meeting so I’m following what was put together by Megan,” the mayor said Monday afternoon.
Whitaker asked Dickey, “I’m just curious if this has anything to do with whether or not you’re going to approve the budget? Are these questions going to impact that, or are they just things you’d like to know?”
The mayor responded, “I think it’s really good context to have especially as a newly-elected official, and it’s also my understanding that this is a big part of our job – passing the budget. All of the moving pieces [are] something I would like to . . . fully comprehend before passing a budget.”
“It feels a little bit like showboating,” said Young who, along with Dickey, joined the council in December 2025.
Whitaker said, “Again we were told to email our questions; [I] guess everybody but you did that.”
[Graham city officials hadn’t furnished copies of council members’ emails about the budget by press time Wednesday.]
Dickey had also asked the manager to provide the actual cost for increasing the “pay grades” for several positions, such as the utilities director and the police chief.
“Could you [addressing mayor dickey] explain why you’re interested in the pay plans for those individuals?
– Graham city councilman bobby chin
“Could you explain why you’re interested in the pay plans for those individuals?” Chin asked Dickey.
“Are you wanting to nix it, or what?” asked Whitaker.
“I have no way of knowing what the impact is,” Dickey responded.
Garner said that several supervisors have subordinate employees whose salaries have leapfrogged their bosses’ salaries. She has also recommended a 3 percent cost-of-living adjustment (COLA) for all city employees in 2026-27.
Dickey also asked Garner how much money the city has in unassigned fund balance (i.e., “rainy-day savings”) within the general fund. The manager said that information would be reflected in the city’s latest financial audit.
“If the past two years of the audit of our books is any illustration of how well we’re operating, that should…our last audit, we came in within budget,” Chin interjected. “In my mind you’re asking questions, almost looking for a gotcha.”
Dickey responded, “I’m not looking for a gotcha. There’s a lot of moving pieces in this budget, and I’m trying to understand.”
Graham had approximately $11.8 million in unassigned fund balance within the general fund as of June 30, 2025, based on a copy of the annual audit that Garner furnished to the newspaper on Tuesday.
Mayor asks to discuss possible future expansion of healthcare benefits.
Dickey also asked to look into the potential costs to provide health insurance coverage for police officers’ and firefighters’ dependent family members (i.e., spouses and children) for a future budget discussion.
“I know this is something that is much bigger than this budget,” the mayor acknowledged. “I would like to see if our staff could do a survey, see how many individuals could take part in this, what it could look like to offer a flat dollar rate or [health savings accounts] to our employees. We do want our employees to be able to live and work in Graham and be able to thrive on what we’re providing them… Can we have a conversation about this?”
Several council members rejected delving into that issue.
“Why are we throwing out any kind of stipend and such when that impacts the taxpayer?” Chin asked. “You’re tinkering with an existing health plan we’ve only had for two years now.”
Dickey said, ““Bobby, to your question, I’m not trying to add expenses willy-nilly but this is something that, through the Benevolent Police Association, staff is requesting, and this would add to retention and recruitment…I’m not just asking willy-nilly – I’m asking because I’ve been asked.”
Currently, the city of Graham covers 100 percent of the costs for employee health insurance premiums but doesn’t cover any portion of the costs for dependents, based on Garner’s description during the budget work session.
Garner said that the city’s healthcare premium rates for 2026-27 have been locked in since earlier this year, and the cost for any expansion of healthcare benefits would be astronomical.
“The cost would be, in my opinion, significant that I believe we’d be asking the taxpayers to cover,” Garner said. “The cost would be astronomical. You’re looking at a 6 percent [premium increase through the state insurance plan for local government employees] that we already had to negotiate for the upcoming fiscal year. I can’t imagine what the dollar amount would be.”
“Until we have a healthier workforce and we can get our claim data down, we really don’t have a lot of room unless you want to weaken the plan,” the city manager said. “You can’t have a [health savings account] unless you have a high-deductible plan, which we’ve already explored. At the end of the day, that’s going to end up hurting the employees who make less.
“I would just suggest that a funding source be identified,” Garner added. “Even employees who are watching today are going to be tuning into that fact. These are great ideas, but we have no way to fund them at present.”
In a subsequent interview with The Alamance News, Dickey said she’d been approached by police officers and firefighters whose wives don’t work and therefore don’t receive healthcare coverage through an employer.
“I will take that I’m green, and I’m finding my way,” she told the newspaper Tuesday. “I’m a newly- elected official and finding my way. But I think it’s very important [to] understand, comprehensively, the budget that we’re passing because it impacts our residents, employees, tax dollars, spending, and the operations of the city. In my opinion, it’s important to know all the Ps and Qs.”
