Frequently Asked Questions

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.