Budget & Performance

The Town of Clayton’s annual budget is the legally authorized plan for how we expect to raise and spend money during the fiscal year that runs from July 1 to June 30. Specifically, the FY 2026 budget (adopted in June 2025) is about $141.2 million across the three major funds, the General Fund, Water and Sewer Fund, and Electric Fund. In simple terms, it is our 12-month roadmap for funding the work we do for our community.

In addition to the annual operating budget ordinance, the Town may adopt project ordinances for specific capital projects on an as-needed basis. Unlike the annual budget ordinance, which is adopted for a single fiscal year, a project ordinance covers the completion of the project and does not have to be readopted in a subsequent fiscal year.

The Town’s operating budget is developed through a series of discussions, requests, analyses, and decisions that begin in the winter of the preceding fiscal year. The process starts with base-level estimates of anticipated revenues and expenses. Departments then participate in a formal request period, where they may propose adjustments to their base budgets, including new positions, equipment, programs, and revenue changes.

These requests are reviewed by the Town’s executive leadership and the Budget Manager. The Town Manager, serving as the Town’s Budget Officer, determines what is included in the Manager’s Recommended Budget. The Recommended Budget is presented with a required Budget Message, and a public hearing is scheduled. In accordance with North Carolina law, the proposed budget must be available for public inspection for at least 10 days prior to adoption. 

Following the public hearing and Council discussion, the Town Council votes to adopt the budget ordinance, which legally authorizes spending for the upcoming fiscal year. 

The Operating Budget is adopted annually before June 30 and includes a balanced plan for the Town’s revenues and expenses for the upcoming fiscal year, which runs from July 1 through June 30. It outlines how the Town funds its day-to-day operations, such as staffing, maintenance, utilities, programming, supplies, contracted services, and other routine costs needed to deliver services to residents. By state law, the Operating Budget must be balanced, and adoption of the budget ordinance legally authorizes the Town to spend funds for that fiscal year.

The Capital Improvement Plan (CIP), on the other hand, is a multi-year planning document. It outlines major capital projects, such as buildings, parks, road improvements, utility infrastructure, and large equipment, whose construction, acquisition, and useful life span multiple years. The CIP prioritizes and schedules these projects based on scoring criteria that balance community needs, regulatory compliance, risk reduction, economic development, health and safety, and quality of life.

While the Operating Budget provides authorization to spend in a single fiscal year, the CIP does not appropriate funds on its own. Instead, it serves as a roadmap for future capital needs. Projects identified in the CIP are funded later through the annual budget process or through separate project ordinances once Town Council formally authorizes them.

In short, the Operating Budget funds ongoing yearly operations, while the CIP plans for long-term investments in major infrastructure and facilities.

The Town welcomes public input throughout the year. Residents can share ideas or feedback at any time by emailing budget@townofclaytonnc.org. The Annual Budget Survey is another way for the community to voice priorities, rank services, and highlight needs that should be considered during the upcoming budget cycle. Community involvement plays an important role in shaping Town services.

Residents with questions about the Town budget, financial information, or performance data can contact budget@townofclaytonnc.org. Staff are available to help explain the process, provide clarification, or connect residents with the appropriate department.

The Town’s revenue comes from a mix of local taxes, service charges, fees, and intergovernmental sources. The largest single source is property tax, which helps fund general government services such as police, fire, parks, public works, and administration. The Town also collects utility revenues from its water, sewer, and electric systems. These revenues are restricted to supporting those utilities.

Other important revenue sources include sales taxes from the State of North Carolina, user fees for recreation and cultural programs, development-related fees, vehicle taxes, solid waste fees, and grants. Together, these revenue streams allow the Town to fund both daily operations and long-term infrastructure needs.

The Town decides how to allocate money through an annual budget process that balances legal requirements, community priorities, and long-term planning. Each year, the Town begins by reviewing its Strategic Plan, which outlines the community’s long-term goals and guides decisions about where resources are most needed. Input from residents is also an important part of the process. The Town conducts a Budget Survey to gather feedback on services, priorities, and areas where residents would like to see investment.

Departments use this information to develop budget requests based on operational needs, service demands, and upcoming projects. These requests are reviewed by the Town Manager and Budget Office to ensure they align with strategic priorities, support core services, and fit within available revenues.

The Town Manager then presents a Recommended Budget and Budget Message to the Town Council. After public review and a formal public hearing, the Town Council adopts the budget ordinance, which legally authorizes how funds may be spent in the upcoming fiscal year.

The Town’s largest expenses vary by fund, but generally fall into a few major categories. In the General Fund, the biggest costs are personnel, such as police officers, firefighters, parks and recreation staff, public works crews, and administrative staff, because most Town services are delivered by people. Public safety, including police and fire, typically represents the single largest category of operating costs.

In the Town’s enterprise funds, including Water and Sewer and Electric, the largest expenses are related to system operations and infrastructure, such as treatment plant operations, power purchases, system maintenance, and large-scale capital improvements needed to support growth and reliability.

Residents can explore the Town of Clayton Budget Book, which includes details about revenues, expenses, major projects, and long term financial planning. 

The Town uses its Strategic Plan to guide decisions and track progress toward community goals. Each priority area includes measurable outcomes and action steps.