Smithfield’s Town Council voted on June 3 to adopt the town’s 2025-26 fiscal year budget, which includes a water and sewer rate hike but no other fee or tax increases.

There were five votes: one to adopt the budget, one to reenact the town’s tax rates, one to adopt the town’s five-year capital improvements plan, one to set water and sewer rates and a fifth to enroll the town in The Local Choice, an insurance pool established by the state for governmental entities. All five motions passed unanimously.

The budget includes 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 all of that increase, or $3.5 million, will 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.

Town Manager Michael Stallings said bids for the building will be priced with and without a brick facade. Per the town Planning Commission’s 2023 vote, the building is to have brick on all public-facing sides. The $2 million total cost also includes 100 additional parking spaces at the Luter Sports Complex and stormwater infrastructure for the maintenance building, Stallings said.

Another large budgeted one-time expense is the $900,000 contribution the 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.

Stallings said in April when presenting the then-proposed budget that 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 providing town employees with health insurance.

The town switched to The Local Choice after learning its current insurance carrier, Anthem, had proposed a $267,914, or 38%, increase. 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, Stallings said.

The budget keeps the town’s real estate tax rate at the current 16 cents per $100 in assessed value and keeps the town’s car tax rate at $1 per $100. The water rate will increase to $8.50 per 1,000 gallons, a 21.4% increase from the current $7 per 1,000 gallon rate. The town’s sewer rate will increase to $6 per 1,000 gallons, up 50% from the current $3.99.

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.