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Town Budget and Fund Balance

At a glance

  • What: resident and council discussion of the size of the town's roughly $5.8 million general fund budget and its fund balance reserves.
  • Where it stands: a resident urged the council to cut back; the manager and a council member defended the budget and the reserves. No action beyond the Community Center Capital Project.
  • What's next: staff begins preliminary work on the fiscal year 2027-28 budget in late October.

Resident critique (public comment)

  • Brent Coles said the council had "just passed a $6 million budget" with little comment. He compared Rural Hall with other North Carolina towns of similar size (he said many spend $3 million or less), cited governmental expenditures of $2.8 million in 2020 versus $5.7 million budgeted for 2027 (a 102% increase), and noted that grants and state revenue shares make up much of income. He urged the council to consider shrinking spending, warned that future property taxes would have to cover recurring costs, and said he was interested in the fire department negotiations. These figures are his and were not verified.

Manager and council response

  • Homer Dearmin reported that as of September 29 general fund spending was about $1.276 million (22% of the $5.8 million budget) with about 25% of the year elapsed, and revenue about $571,731 so far, with property tax arriving later in the year. He said four First Citizens Bank accounts were closed and funds moved to the North Carolina Capital Management Trust, saving about $360 a year in fees. Fuel prices are being watched (late September: about $4.13 gasoline, $6.16 diesel in the area); no immediate budget concern.
  • He described a "make local government boring again" FAQ series, including one on fund balance, and said council adopted updated financial policies in September.
  • At the close a council member said he has worked on budgets for over 40 years and called this one among the best he has seen.

October 13 town hall

  • In answer to resident questions, officials said the town tax rate is 28 cents, one of the lowest among Forsyth County municipalities and about 1.3 cents above revenue neutral. Reserves include about $4.1 million accumulated, of which $1 million is earmarked for the Community Center Capital Project; the main amount owed is about $1.3 million for the fire department.
  • Idle funds are held in no-risk accounts earning about 3.7%, moved from certificates of deposit at a bank; officials said investment earnings exceeded $400,000 over three years and a $1 million balance should earn about $40,000 a year. Homer Dearmin had reported the previous night that spending is still under budget; fuel prices are the main watch item.
  • Grants: the $500,000 state park grant is a matching grant (the only one outstanding; see Covington Memorial Park Improvements); the $3.8 million fire department grant, $200,000 county grant and about $260,000 for air tanks carry no further obligation.
  • A resident asked what services would be cut first if costs rise. Officials said the biggest costs are the fire department and the Sheriff's Office, that events (about $55,000, see Town Events Program) or bulk pickup would save little, and that the town runs its own fire department, unlike most in the county. Mention was made of the November election; see November 2026 Municipal Election. Figures are as stated aloud and unverified.

Official minutes

Discussion time

About 19 minutes across 2 meetings (from transcript timestamps; approximate).

Meeting Minutes
2026-10-13 - Mayor's Town Hall Meeting 12
2026-10-12 - Town Council 7

Log

  • 2026-10-13 - Mayor's Town Hall Meeting - Town hall Q&A: 28-cent tax rate, fund balance and investment earnings, grant obligations, and which services drive costs.
  • 2026-10-12 - Town Council - Public comment urging smaller budget; manager's September financial report; fund balance debated during the community center vote.
  • 2026-09-14 - Town Council - Resolutions 914 (card and electronic payment policies) and 915 (cash management and investment policy) adopted; manager cited over $800,000 interest earned in under 3.5 years, fund balance up about 49% since FY23, and a plan to move money market accounts to the NC Capital Management Trust (from auto-captions).
  • 2026-09-14 - Town Council - Minutes: Resolutions 914 and 915 adopted unanimously; UTV purchase saved about $32,000 versus a brush truck.
  • 2026-08-10 - Town Council - Council unanimously approved a $150,000 grant revenue and expenditure amendment (pass-through of a state railroad economic development grant, no net fund balance effect); Homer Dearmin reported audit progress, $252,000 in federal firefighter equipment reimbursement, a CD renewed at 3.65%, and investment earnings of about $792,500 since January 2023 versus about $79,700 in fiscal years 2015 to 2022 (from auto-captions).
  • 2026-10-27 - 2026-10-27 - Mayor's Town Hall Meeting: mayor answered budget growth questions (about $4.9M excluding the park grant match; audited spending up about 1.1% a year).
  • 2026-06-22 - Special Town Council Meeting - Minutes: Ordinance 896 and the Sheriff's Office contract reduction approved.

Sources