Rapid growth and inflation: Sanford’s proposed budget raises taxes, water and sewer rates

The City of Sanford’s proposed 2026–27 $162,039,292 budget faces challenges from inflation and rapid growth, leading to higher taxes, utility rates, personnel costs, and concerns about road repair delays.

Sanford reviewed its proposed budget on May 26. The presentation emphasized that rising operating costs affect every department.

The city recommended a .3 cent tax increase.

A $250,000 household would pay about $75 more in taxes per year.

The tax increase will help fund additional personnel: two new positions in finance, a human resources position, a public facilities technician, a fire inspector and three new fire fighters.

Health insurance alone will have a “conservative” estimated increase of $105,000.

More reasons for the tax increase include the negative sales tax impact from the proposed county property tax rate increase, rising operating costs, retirement contributions, the agricultural marketplace and road repairs.

The solid waste fee may increase $10 due to bulk trash cost increases.

The total budget is $162,039,292, summed by $60,910,746 in the General Fund, $99,708,878 in the Utility Fund, $1,122,559 in the Chatham Park and Water Recovery Center Fund and $297,109 in the Municipal Service District.

The expected total expenses are $60,910,746.

Operating costs are increasing faster than revenues, and personnel and benefit costs consumed a large portion of the General Fund as infrastructure costs rise.

This led to a discussion about future road resurfacing being delayed or underfunded unless additional revenue sources are identified.

Assistant City Manager Beth Kelly recommended using $30 per vehicle from the Vehicle Fee Fund for road resurfacing.

Member Charles Taylor said it would be smart to bundle road repaving with the bond referendum to “get ahead of repairs” because inflation was rising.

“Putting something on a bond that we should fund would risk the debt credit,” Kelly said.

The city’s interest income is down due to the expenses paid for large investments such as the agricultural marketplace and in April 2026, the city approved spending $455,000 for the purchase of more property.

City Manager Hal Hegwer said that road conditions had worsened and inflation will be a consideration in planning repairs.

Over the last two years, the city had an increase of 1,400 registered vehicles.

Mayor Pro Tempore Byron Buckels said the city may not be able to catch up with growing inflation.

“Been operating with a snorkel and taking on more water than oxygen right now. Need to cut it off. This affects all departments, fire and all people,” Member Charles Taylor said about road conditions.

Hegwer said they would review the funding options and make a plan for road repairs.

The city’s move to reduce maintenance costs on city vehicles was evident in the police now having assigned individual vehicles.

After Taylor requested a five-year snapshot of operating spending and the penny rate changes, Kelly said she would supply the information.

Other increases include a July 1, 2026, 7% water and 7% sewer increase.

Kelly explained that the fees to haul sludge increased by $400,000.

Member Walter Ferguson said that due to social media misinformation, the public believed the Chatham County water service increased their rates.

Hegwer said Sanford’s rates were not impacted by services to Chatham County and that all will benefit from the activated carbon project to absorb contaminates and reduce PFAS.

“Will see a dramatic increase in water quality,” Hegwer said.

The water cutoff and return service fee will increase from $25 to $75 because the current fee does not even cover the cost of rolling out a truck.

Kelly explained that when a service truck is in a customer’s area and they have contacted the water department early, they can usually reconnect service without a fee, but after 5 p.m., they must charge.

Sanford participates in the Johnston Lee Harnett Community Cares program to help with water and utility fees. Customers may round up their bills to participate in Sanford Cares.

The annual ad valorem tax assessment begins January 1. The tax is based on a percentage of the property’s fair market value. The estimated selling price is the fair market price.

General Fund Revenue

Expect these changes if the budget passes.

Sanford expects a 10.9% increase from the previous year for the ad valorem tax.

Sales tax needs a 5.5% increase to navigate rapid growth.

Vehicle tax fees will increase 16.9% and sanitation fees will increase 2.5%.

The utility sales tax may decrease, depending on weather conditions, by 2.6%.

The general fund revenue’s interest income will decrease 37.5%, a loss of $450,000 compared to the previous year.

The anticipated budget review and adoption hearing schedule is to hold a workshop on June 9 and a public hearing with a possible adoption on June 16.

Read News Lines from May 16-22 in Moore, Lee & Harnett to understand the economic hurdles the area faces as legislators work to improve personal property rights while creating pathways for “affordable” growth. Learn about Lee County School Board Chair Sherry Womack’s resolution for the county, city and developers to collaborate with the school district to prevent overcapacity.

May 27, 2026

Stephanie M. Sellers

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