By Tara Fischer

Staff Writer

The Berlin Mayor and Council presented the municipality’s proposed fiscal year 2026 budget last week, revealing a stagnant property tax rate and additional interest income.

The Town of Berlin’s Mayor and Council presented the municipality’s proposed fiscal year 2026 budget on Tuesday, May 27. The document includes a balanced general fund budget of roughly $17.4 million and a balanced electric budget of about $8.8 million.

According to Berlin Mayor Zack Tyndall, the budget process begins with each department head submitting their team’s needs for the upcoming fiscal year. During this initial process, the budget came in with roughly a half-million-dollar deficit. The finance group worked with staff on items that could be eliminated to reach the balanced fund that was reviewed this week.

The approximately $500,000 reductions, the mayor said, “won’t come without any pain.”

“The departments don’t put in a lot of frills, and when they have to cut those things, it means something has to be moved to another fiscal year,” he said. “…I would say some of the [cuts] are probably critical, but it’s just a matter of when. Are we in jeopardy of the wheels falling off the tracks? No. Are we in jeopardy of [the utility director] not being able to get the things he needs to make sure the lights stay on? No. But, is it stuff you can defer for multiple years? No, it’s not.”

Tyndall continued, maintaining that while the budget cuts had “some real substance that needs to be chiseled away,” the removed items would not have been eliminated if the town could not make it to the next fiscal year without them.

Also of note is the town’s decision to keep the real property tax rate flat at $0.8275 per $100 of assessed value, leading into FY26. Even with the unchanged rate, the town projects additional income of around $350,000, accounting for an increase in property value.

Two years ago, in 2023, Berlin increased its tax rate from .815 cents per $100 of assessed valuation to its current .8275.

Natalie Saleh, Berlin’s finance director, warned the governing group that a flat rate could damage the municipality’s financial situation in the long run.

“We are going through the same routine that we go year after year … without an incremental increase,” she said. “Every three years, the property is reassessed. When the new reassessment hits, it will be higher, and for you to say, ‘now we’re going to do an incremental increase,’ plus the assessed value will go up, it will get harder. The more we wait, the harder it will get.”

Saleh added that the town relies on the real estate tax as revenue for the general fund, and an increase will eventually be required to ensure Berlin’s financial stability.

“We don’t have new forms of revenue we can bring in to fund the ongoing projects,” the finance director maintained.

Some council members resisted increasing the property tax rate, arguing that they must consider the escalating cost of living when making decisions that will affect constituents.

“Our job, I look at it as balancing what you just said, with what we’re hearing from people out on the streets, and that is that people are struggling,” said Councilman Steve Green in response to Saleh’s comments. “Families are struggling amid rising costs of everything, working families … you’re the expert in the finance world. We must balance that with what we hear from people, and families are struggling.”

Green said he recently fielded a call from a constituent asking for help because she could not pay her first tax bill. He suggested she call the county treasurer’s office, which agreed to work with the homeowner because many residents are challenged to meet their property tax amounts.

Saleh conceded that people are feeling the rise in living expenses. However, she argued that these increases are also affecting the town and the services it is required to provide.

“We have to look at the cost of equipment, how much trash pickup costs, how much the trash truck costs, and providing those services at the level that we’ve always been, that’s our goal,” she said. “And even better, we need to improve the services, but that unfortunately requires funding.”

Tyndall expects to see some movement in the property tax rate next year, even if it’s marginal. Green said he would prefer to “see what the surplus is” from the current fiscal year budget rather than talk about tax increases. The town typically ends its budget year with a surplus due to conservative budgeting.

Saleh also worries that the town is advancing too much money from reserves to fund certain projects, another reason she believes the real property tax rate must be increased to produce additional revenue for the town.

In addition to capital expenses, such as $2.5 million for Town Hall renovations, $216,000 for restrooms at Stephen Decatur Park, and $2.8 million for a new public works facility at Heron Park, Saleh noted that there are some carry over initiatives from departments, particularly water resources, which has contributed to the decision to pull from reserves. Tyndall adds that the budget has a contingency of approximately $45,000, but believes it is likely not enough.

“Some carryforward projects from fiscal 2025 are not completed,” Saleh said. “The heavy lifter is water resources, they have major projects that they have been doing for several years and American Rescue Plan Act (ARPA) funds have been almost depleted…most of the biggest projects have been funded by ARPA, but also we have advanced some monies from capital reserves to continue and the prices of the project and the cost of equipment, supplies, and operations have been increasing recently.”

Tyndall said that the finance department has worked on building up the municipality’s reserves, which has resulted in a projected $285,000 in interest income. However, the mayor said that to maintain this strong financial position, continuing to pull from these reserves will have consequences.

“There is too much coming from reserves in this fiscal budget,” he said. “That is not a good thing when you’re trying to save and ensure we have the money we need moving forward. I want to ensure everyone knows that the finance director has been sounding the alarm about the significant pull on these funds from contributions from reserves. With that, it’s not sustainable. Sooner or later, that pot of money does dry up, and we’re sitting here talking about how we can see so much more in interest income. That doesn’t happen if we continue to draw.”

The budget reviewed this week also includes an electric budget of around $8.8 million, which provides for water at $5.7 million, sewer at $7.2 million, and stormwater at around $1 million.

Through discussions during the budget presentation, the council elected to make changes to staff appreciation. Historically, around Thanksgiving each year, the Town of Berlin provides its employees with a $50 Food Lion gift card. Councilman Jack Orris initiated a discussion to do away with the line item and instead incorporate the $50 into the one-time payment.

Thus, town staff will no longer receive a Food Lion gift card. Instead, their one-time payment amount, also given out around the holiday season, will increase from $300 to $350.

Berlin officials and staff agreed to eliminate the gift card line item, maintaining that the result remains the same: $350 each year for employee appreciation.

“I like it,” Green said. “I think some people don’t like to shop at that particular grocery store, and I think it’s easier … I just can’t imagine it not being well-received.”

The Town of Berlin will welcome residents on Monday, June 9, at 6 p.m. at its regularly scheduled Mayor and Council meeting for a public hearing on the fiscal year 2026 budget. The budget will be adopted at that time. The full document can be viewed on the municipality’s website.

Included in the town’s budget is a step increase for employees and a 2% cost-of-living-adjustment, resulting in most employees receiving a 4.5% salary jump.

The mayor noted he is confident in this year’s budget and the town’s financial position, but he believes some changes will likely need to be made next year, potentially to the real property tax rate.

“We’re in a good spot, but we also have to make some smart plays over the next 12 months,” he said.