No one spoke at a May 19 public hearing on Smithfield’s proposed 2025-26 fiscal year budget, which includes a water and sewer rate hike but no other fee or tax increases.

The Town Council is scheduled to vote on the budget at its June 3 meeting.

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 those projects is a $2 million, nearly 4,000-square-foot maintenance building at the Luter Sports Complex to serve all town-owned parks.

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.

Town Manager Michael Stallings, who presented his draft budget on April 28, said aside from the increase tied to one-time capital projects, the budget is only $250,000 more than it was last year.

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.

Switching to TLC, which also provides coverage through Anthem, would mean 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.

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 water rate would 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. The town’s sewer rate would increase to $6 per 1,000 gallons, up 50% from the current $3.99 rate.

The water and sewer “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.