The town of Smithfield is looking to move forward with plans for a nearly 4,000-square-foot maintenance building at the Luter Sports Complex to serve all town-owned parks.

The estimated $2 million cost accounts for just over half of the $3.9 million in one-time expenses included in Town Manager Michael Stallings’ proposed 2025-26 budget. Tax rates wouldn’t change.

Stallings presented his draft budget on April 28. Smithfield’s Town Council will hold a public hearing at 6:30 p.m. on May 19 and is scheduled to adopt a budget June 3.

The maintenance building was originally to be funded with now-expired federal COVID-19 relief dollars the town received through the American Rescue Plan Act. When the town deemed available ARPA funds insufficient to cover the maintenance building, the town redirected the money to a 600-square-foot concession stand completed last year at the Luter complex.

The proposed budget shows nearly $15 million allocated to the town’s general fund, a nearly 33.5% increase from the current $11.2 million general fund budget. Nearly the entirety of that increase, or $3.5 million, would come from the town’s cash reserves to fund one-time capital projects, the largest of which is the maintenance building. Another large budgeted one-time expense is the $900,000 contribution Smithfield’s Town Council agreed last year to contribute as its 11.8% share of the estimated $7.6 million single-lane roundabout and related turn lanes on Turner Drive that Isle of Wight County plans to construct by 2029.

“Once you take those projects out, the budget’s only $250,000 more than it was last year, so we’re relatively flat,” Stallings told the Town Council.

The bulk of the remaining increase, Stallings said, is tied to an expected rise in what the town spends to provide its employees with health insurance.

Anthem, the town’s current insurance carrier, has proposed a $267,914, or 38%, increase. To lessen that cost, Stallings has proposed the town switch to The Local Choice, an insurance pool established by the state for governmental entities.

TLC also provides coverage through Anthem, but TLC caps the annual increase Anthem is allowed to charge TLC’s member localities, which include Isle of Wight County and the town of Windsor. This year, the highest increase any member locality will see is 12%, Stallings said.

That works out to a $108,326 increase in health insurance costs for the town and a $38,504 increase that would be passed on to town employees through their premiums, which is just over half the $66,000 collective increase in employee premiums the town would have seen by staying with its non-TLC Anthem plan, Stallings said.

The budget proposes keeping the town’s real estate tax at the current 16 cents per $100 in assessed value and to keep the town’s car tax rate at $1 per $100.

The budget would fund a 4% salary increase for town employees and no new positions.

The only fee increase would be in the town’s water and sewer rates.

Stallings said a recent study recommended the water rate increase to $8.50 per 1,000 gallons, a 21.4% increase from the $7-per-1,000-gallon rate town water customers currently pay. Town water customers also pay a flat $11.47 debt service fee, which would remain unchanged and is tied to the town’s $4.1 million reverse osmosis water treatment plant that began operating in 2011. The per-1,000-gallon rate gets paid into the town’s water fund while the latter gets paid into a separate debt service fund.

The town’s sewer rate would increase to $6 per 1,000 gallons, up 50% from the current $3.99 rate that gets paid into a separate sewer fund.

The two “enterprise funds,” which are supposed to be self-sustaining, took in just under $3.4 million in operating revenues last year but paid out $3.5 million in expenses, resulting in a net loss of $117,463 as of June 30, according to a recent audit of the town’s 2023-24 finances. Blacksburg-based TRC, which in 2022 acquired the town’s former consultant, Draper Aden Associates, projected in January that the annual deficit could rise to between $250,000 and $500,000 by 2029 if the town doesn’t raise its rates.

The town’s total 2025-26 budget across all funds, which in addition to water and sewer include a highway fund, would total $22.6 million.

Per the schedule TRC proposed in January, the water rate would rise again to $8.75 by July 1, 2026, $9 by the same date in 2027 and $9.50 in 2028. 

All are still lower than Isle of Wight County’s rate of $13.15 per 1,000 gallons, which is proposed to increase to $15.15 by July 1 of this year in the county budget. The proposed July 1, 2025, town sewer rate would exceed that of the county, which currently charges $7 per 1,000 gallons and is proposing to increase the rate to $9 come July 1.