Council - Regular Meeting

clock were running a little bit slow. We'll [clears throat] go ahead. Good evening, everyone. It's 6:00. We're in the Smith room. It's our May 4th Town Council meeting and uh we're um if you are able to stand and we'll we're going to have a moment of silence and then the pledge of allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Council, I need a motion to approve tonight's agenda. So moved, Madam Mayor. And do I have a Okay, second. Say We have a um uh All in favor? All in favor. All right. Aye.

[laughter] Thank you. You'd think I could read. [clears throat]

Uh Liliana, do you have a presentation for us tonight? Good evening, Council. Tonight, I'm presenting the quarterly financial report for the third quarter of this current fiscal year, which it ends in March 31st, 2026. The quarterly financial reports provide periodic updates on the town's financial performance. Their purpose goes beyond simply presenting numbers. They play a critical role in supporting transparency for our citizens, informed decision-making, tracking performance overview over the time, accountability and regulatory compliance, and internal planning. In short, this report ensures that everyone remains aligned on the town's financial position. We're going to start with the fund thing, which is the operation fund. This fund supports the town's day-to-day operations and services. We're going to start with the revenues. The town's primary revenue source is the property tax. At this point, March 31st, we have collected 96.21% of the taxes. The other revenue sources include the other taxes. We have collected 60.39%. The permits and fees, 80% collected. Intergovernmental revenues, these funds are received from external agencies, including grants, power bill allocations from the North Carolina Department of Transportation, which supports street maintenance and repairs.

The interest earned collection has significantly exceeded projections by 329%. And I'm going to mention the um last Wednesday, April 29th, in the meeting, the Federal Reserve decided to hold interest rates steady for the upcoming quarter, which might continue to positively impact the earnings. Additional revenues include the miscellaneous sources, such as such as sales of merchandise, assets, insurance reimbursements, and donations. And overall, 78% of the total projected revenues has been collected at this point, with 3 months remaining for this fiscal year, April to June. Let's take a moment to look into the shared revenues. People close look into this one. The shared revenues are the sales tax, occupancy tax, and land transfer. They represent a significant portion of the other collections revenues, and they are being closely monitored and are performing and they are actually performing better than the previous fiscal year. The next fund that we're going to look is the fund 41, capital project police department construction. Unlike the general fund, which supports ongoing operations, the capital project fund is used for one-time, large-scale projects. The police department project has been completed with final expenditures coming below budget. Savings were realized in equipment costs, inspection fees, and primarily within the construction contingency. As a result, $157,390 will be transferred back to the general fund when we close this fiscal year.

[laughter]

Conclusion. As of the third quarter, the town's financial position remains strong with approximately 75 79% of the projected revenues collected. Departments continue to manage their budget effectively, contributing to a positive overall outlook for this fiscal year. And at this point, if you have any questions, I'd be glad to answer. Good evening, Sarah. Thank you. Thank you very much. Thank you, Liliana. Madam Clerk, do we have anybody signed up for public comment? We do not have anyone signed up for public comment right now. All righty. Council, I need a motion to approve tonight's consent agenda. I'll make a motion to approve tonight's consent agenda. Thank you. I'll second. Second. All in favor? Aye. Okay. Let's see.

[clears throat]

Okay. Um Council, we have um two public hearings tonight. Uh the first is about um allowing medical services in our medical district. Do I have a motion to go into public hearing? So moved. Second. All in favor? Aye. Thank you. All right. Um do we have anyone that would like to speak to the um subject of medical services in a medical district? Anybody? We good? All right. And then I I'm going to need a motion to come out of public hearing. So moved. Thank you. Second. Thank you. Um all in favor? Aye. Aye. Council, um let's see. Do we need any discussion on this um among the council? Pretty straightforward, I think. And if not, I'm going to need a motion. I'll make a motion. I move to approve the proposed proposed text amendments to chapter 42, division 5 of the Kitty Hawk zoning ordinance, town council's final proposals consistent with the town's adopted land use plan. Thank you, David. I'll second. Thank you, Dylan. All in favor? Aye. Aye. Okay. The second uh public hearing is regarding dimensional requirements. Do I have a motion to go into public hearing? So moved, Madam Mayor. Second. All in favor? Aye. Aye. Thank you. Good.

Mayor, if I may on this one, um mid-afternoon today we received a and I think you guys were all copied on it, I believe, but a pretty lengthy letter um involving a bunch of um items that touched on legal notes that I need to further dig into all with respect to this particular text amendment. Um prior to consideration of any of of the staff report or any comment, I would say or I would propose to you guys that you guys entertain or consider a motion for us to continue this particular hearing until next month's meeting, um which will allow me time to deal with uh the issues raised in that letter and make myself uh comfortable before bringing this back. Thank you. All right. Then um

Madam Mayor, I approve I I make a motion to um Continue. Continue. Continue the proposed text amendment to section 42-250 and 42-251 And that is until ordinance. And that is until next month's meeting? Yes. Council. Mayor Pro Tem. Thank you. Kim Parrish. Second. All in favor? Aye. Okay. Um do I have a motion to come out of public hearing? So moved. Second. All in favor? Aye. Okay. Let's see. This is going to be a wrap. Came up quickly, didn't it?

[laughter]

Okay. Now it's your turn. I was rusting a little bit. Good evening, council and members of the public. Um thank y'all for being here tonight. And it is my privilege to present to you the drafts of the fiscal year 2026-2027 budget. We call this the fiscal year 2027 budget. Um every year we pick a theme for our budget, and this year's our vision for tomorrow starts today. And the council and staff have worked very hard putting this together. We had three budget workshops. We We've done a lot of work to get to this point. So, I appreciate everyone's input, and uh we'll go from here. So, first for the really for the sake of the public, I wanted to talk a little bit about the budget process. Um statutorily, I am legally I I am the budget officer for the town, and I am legally obligated to present a draft budget to the council by June the 1st. Now, traditionally, we do it in May, and we were able to meet that deadline this time as well. But, statutorily, it is required by June the 1st.

[clears throat] A budget must require a budget message, projected revenues and expenses, which should be balanced and match, um a summary of the annual goals and important activities funded for the budget, and any changes from the previous fiscal year in program goals, appreciate appropriation levels, and fiscal policy. Once I present this to y'all, so starting tomorrow, the draft budget will be available for public inspection. We will have physical copy at the front desk. We will also put it online so people can view it that way. Um and you guys have also received a copy of the budget document in your packets.

[clears throat] Um public inspection will last until our meeting on June the 1st, which is um and tonight, by the way, we will also be setting a public hearing. We are statutorily required to have a public hearing uh after having ample time to uh for the public to view the budget. And so, we will have our public hearing on June the 1st, and hopefully, it will be approved um on June the 1st, but we have until June the 30th to approve the budget again by the rules, by statutes. So, I just wanted to sometimes I think, "Oh, we have all the time in the world." But, we have rules that we have to follow. Um

[clears throat]

So, this year, uh town council worked really hard um and did some visioning exercises and uh came up with six priorities. [snorts] And they are public safety, financial responsibility, coastal resiliency, responsible development, investment in community, and cultural heritage. And these are going to be the top six things that our town will focus on, and hopefully, we will develop a strategic plan and goals that will go along with these in this coming up year. Um so, decisions that are made in the budget are using these guiding priorities. So, tonight I'm going to talk a little bit about the fund balance, about revenues, expenses, and the capital reserve. They're all main parts of the budget.

[clears throat] So, the fund balance, every year we have an annual audit. We've actually already started our audit for the fiscal year that we're in. Um but, as of June 2025, that when we were audited last, our unassigned fund balance was $7,308,808. [snorts] Now, that includes the three and a half million dollars that's an emergency fund that town has set aside just in case of emergencies, and that was done by ordinance. [clears throat]

So, the unassigned fund balance is 7.3 million, but some of that is the 3 and 1/2 million strictly for emergencies. This year, the town's projected revenue is 13,176,710. This is a 5.1% [clears throat] increase over last year's town budget. Um, when we went to look at our budget and our expenses, um, we, of course, like most people, have more expenses than we had revenue coming in. So, [snorts] um, probably to the tune of a half a mill- a little bit more than a half a million dollars. So, we had to really look and look at our priorities and decide what we wanted to do. So, this year, we are proposing a town-wide tax of 23 and 1/2 cents. This includes a 20 cent tax that goes to operations, a 2 cent tax that is allocated to beach nourishment, and then a 1 and 1/2 cent tax dedicated to the newly created fire apparatus fund. Um, it's been said, since 2021, the cost of fire apparatus has gone up 150% and the town is is feeling that, um, very much. And so, this is an effort to create a fund that will be there so that when we replace our fire trucks, we're already at the maximum replacement of 25 years, that we will have money in the in the fund to cover those expenses. There is also a separate municipal service district. The beach nourishment tax, um, and that's for people between the highways and on the oceanfront. That's

an additional 6 cents that it strictly goes to beach nourishment. [clears throat] Do I have any questions? Just FYI, one penny generates $244,891 in our budget. So, [clears throat]

that's how we look at things in pennies. Um, So, the biggest part of our revenues are property taxes, 50.47% or $6,658,36, and then the other taxes, like Liliana talked about, like shared revenue, sales tax, all of that, occupancy tax, those are all shared revenues, $5,401,205. dollars. And that's 40% of our revenues. And again, [clears throat] together, the town's budget is 13 million. You can see that's 12 million right there. They they, um, cover the majority. Excuse my voice, by the way. I got the something. She struggled to be here tonight, so let's let's give her some some encouragement here.

Expenses, um, again, the balance is budgeted at $13,176,710. That's the exact number of expenses. And so, revenues have increased by 5.1 as have the expenses. [clears throat] The balance is budgeted. We are not using any fund balance or dipping into our savings account to pay any portion of our budget. We are funding it all from our revenues. So, personnel and benefits is $7.1 million, operations is 4.3, maintenance and repairs is nearly $400,000. Capital outlay is 358,000, and transfers to capital reserve is 928,000.

[clears throat]

So, just some of the highlights that we did last year where a lot of the money from this fiscal year, I keep saying last year cuz I've been in last year since I've been in this year since February. But anyway, um, roof replacement and siding at the new medical office building, replacement of a pipe and culvert on North Midgett Road, construction of a pedestrian trail around the town hall, new playground equipment at Paul Pruitt Park, sand fencing along the beach, repairs to East Kitty Hawk Road beach access, and completion of the police department building. And we're so proud of that project and so proud to be able to say that we actually were able to put money back into the unassigned fund, which is a really big deal. Um, this year, we're looking at some cybersecurity enhancements. We received a grant, um, through the North Carolina information systems, um, that we're going to work on. We had an audit from the National Guard, I believe it was, who came and pointed out some things how we can protect our information better. Um, next, we are working now on a multimodal pedestrian bicycle plan. We had to have this done by the end of the year. Again, this is a grant, um, that's going to help us, hopefully, connect with what we have envisioned for what we could use in the future. Um, we're currently working on the US Life Saving Service Memorial. It's at the bathhouse. It's going to be, uh, memorial and an educational piece, and we hope to have a ribbon cutting maybe in September for that with some other activities. Um, the multi-use path along Highway 158 is still going. Uh, we hope to have a rendering, I was told in May, of what that might look

like. So, um, we'll we'll we'll see. And then, development of a strategic plan. That's what I'm hoping we can take our priorities and come up with real action items, um, as a as a town. So, capital purchases, um, we're going to spend $30,000 on playground equipment at Sandy Run. Um, we're going to replace three police vehicles and the equipment that goes with them. Um, police equipment is 50,000, fire rescue self-contained breathing apparatus is 57, thousand. That's five units. And then, fire rescue equipment is 25,000. And I'll just like to brag a little bit. Um, [clears throat] nobody on our staff asked for things that they don't really need. I mean, you can all know that the fire department needs breathing apparatus, and the police need vehicles, and, um, that their radios and their tasers and the things that they need, they literally need. And so, we we, you know, we balance our we try to balance our needs, um, and we've taken out quite a few things that could wait. Um, in the capital reserve funding, we have $928,000 going into capital reserve, and that's kind of like a savings account. Um, IT equipment replacement and upgrade and development, $20,000, finance software, 10,000, town-wide boardwalk and dock repairs, 10,000, HVAC replacement at fire station, 7,500, roof replacement at the fire station, 25,000, Caterpillar backhoe replacement, 10,000, we had the firehouse galley for 10,000,

future bike ways, pedestrian pathways, 16, fire station alert system, 40,000, fire apparatus replacement fund, 381,372. That is where the 1 and 1/2 cent tax is going. It is solely going to the fire apparatus play- replacement fund. The land use plan update is 3,000, the zoning ordinance rewrite is 20,000, and then beach nourishment taxes fund the beach nourishment reserve of $376,291. Um, I think fire apparatus fund, this is a new fund. It's dedicated 1 and 1/2 cents of the town-wide tax will go to this fund, and it generates $381,372. Um, beach nourishment, again, town-wide is 2 cents, the municipal service district is 6 cents. That results in a total of $376,291 going to beach nourishment. The final land payment of this project will be paid in 2026, December. Permitting and engineering is underway already. And the next project is scheduled to begin next summer, uh, 2027. So, once again, thank you to everyone, department heads, staff, council, everybody who has worked to get this thing straightened out. We appreciate it. Do you have any questions? Anybody?

[clears throat]

Nope. Okay. Thank you. Thank you so much, and and thank you, department heads, for all your hard work to make this budget a reality. Council, we need to schedule a public hearing for June 1st regarding annual budget. Do I have a motion? Madam Mayor, I I a motion to schedule hearing, a public hearing for next month, June 1st, 2026. For the budget for the for the budget. Mhm. I got it. Second. All in favor? Aye. Okay. Anna, did you need to speak to us? You're good? Okay. All right. Thank you. I just didn't want you to get missed if you were Um Well, Melody, since you finished your budget report, um do you have any um reports [snorts] or town announcements?

Sure. Um Since [clears throat] our last meeting, it feels like we have been in a whirlwind and we've had so many community events and fun things and parties and people to meet and um we've had a community clean-up, we had the anniversary celebration, we had the skate event on Sunday with the police department. We've had Coastal Reserve Day. Um There's been so much and um I appreciate all everybody's help um who all the employees who coordinated and worked those events and then community members who came out, you know, it's [snorts] always it's always fun and it's always good to have people out and they always generally seem to be happy and happy to help and volunteer and celebrate. So, I really appreciate that. It's a good day when you can do that.

[clears throat] As I said earlier, we started our fiscal year 2026 audit prog- process. Representatives from Carr, Riggs, and Ingram were here last week and they're gathering information and talking to Liliana and Laura and Lauren C about their processes, making sure we have doing what we're supposed to do and have all the internal controls. Um the second visit is scheduled for September and then we'll have the full audit report. I think it's due by December. Is that correct? [clears throat]

So, that's already in the works. Um The police the In conjunction with Peace Officers Memorial Day on May 15th the local public safety personnel, including our police officers and our fire department um are participating in the Special Olympics Torch Run. Um it's designed to bring awareness to the Special Olympics and it is very much like the Olympics where they carry a torch and um it will take place on May 15th at 8:30 in the morning. They're going to be running from the base of the Washington Baum Bridge in Nags Head over the bridge and um to Pirate's Cove. So, if um anybody can go out and see that, that's a really good thing. Um lifeguards um the season is almost upon us. It's hard to believe. The daily ocean rescue service will begin on Saturday, May the 23rd. Um Willie wanted me to let you guys know that the last day for large item pickup requests is May the 20th. They will resume them after the season in the fall. And then um the Kitty Hawk Police Department has another event coming up in June on the 14th. It's a kids fishing tournament. It's on Kitty Hawk Pier. It's always fun time and it's from 8:00 to 12:30. So, you can still sign up. You can go on the town uh the police department's Facebook page, call the police department. I think Tyler Cuescoris is Sergeant Cuescoris is um coordinating this event. So, lots of ways to reach out. And that's all I have.

All right. Thank you. Thank you. Town attorney, do we have any things we need to talk about? I have nothing, Mayor and Councilman. Thank you. Thank you. [clears throat]

Dylan, do you have any Just want to give a quick thanks to Melody, Liliana, and the rest of the staff members um for the all hard work in the budget process. Once again, uh that is a thorough process and I think the town is extremely lucky to have all of our department heads and staff members uh helping us out with that. So, thank you. Okay. Thank you, Dylan. Dylan? Yeah, I [clears throat] do. On the consent agenda, there was an item to name a portion of 158 to Darrell Collins. Darrell Collins was park ranger for 38 years. Most of his career uh was at the Wright Brothers Memorial where he was historian and storyteller and I just sometimes we just overlook and I'm just so glad that they have brought his name forward. He He was an ambassador to our area. I'd also like to thank the Coastal Reserve and the the Marine Fisheries uh uh They highlighted our woods and they brought people in here to to tour and Marine Fisheries gave them a tour of the wetland islands and other people took them to guided tours through our woods. Uh I'd like to thank police department for the skate thing uh the skate activity. I saw it was packed. And last some of the I have to do. I like to uh just recognize it's my anniversary and I'd like to thank my wife for all she's done uh putting up with, you know, the budgets and being kind of the stronghold when I get home sometimes uh for 35 years. I just want to thank her for that. That's all. Well, happy anniversary.

Thank you. Thank you. David, do you have something?

No, ma'am, I do not. Okay. David? Um yes, ma'am. I too would like to thank Melody and the staff for all their work on the budget. It's hard work, as Dylan said, and and my first round in it and I've been through many many budget meetings before in the past and and this one was right up there with them. So, due diligence and hats off to the department heads because it's not easy to cut and everybody made some big cuts to make this budget. So, I appreciate that and and all the hard work went into it to include um the up front uh uh creating a vision and goals and priorities that that you you briefed tonight, Melody, which are huge cuz that helps us as a town create a framework to prioritize. We only have so many assets and and resources, but we have a lot more demand signals. So, you got it's got to come down somewhere. So, I appreciate that to make sure we're aligned. Um also in the consent agenda was a master recreation plan for the recreation committee. Recreation master plan for Kitty Hawk and that's a big piece um uh As soon as we get that in there and approved formally by council tonight, as we did in the consent agenda, that says this is the the town's plan for the recreation of the town going forward and there's a whole lot in that document, but I will say the recreation committee's worked extremely hard. We're already in the rewrite for the next one. So, hopefully by June in our next meeting, we'll have even a a newer version of this, which will take into North Carolina's recreation master plan and all the surveys and that just came out in January and that's like a 400-page document or whatever. And so, recreation committee's been working very hard to make sure that they're aligned with North Carolina and this council with the priorities as set forth in that vision that we've laid out. So, there's some real nice synchronicity going on

here and that recreation plan will come out soon. Part of one of the reasons why that recreation plan made it into was from Alsu, who has done a lot of tremendous work putting in a It's going to be quite expensive and she's working hard to see if we can't get help in in getting that paid for. So, fingers crossed, but she's done a lot of work. A lot of stuff went into that. We tried last year and it was a swing and a miss. So, this is year two and we put our best foot forward and and we're hoping that we'll be able to pull it off. So. She submitted that on time and it Yes, ma'am. and we're just waiting to hear. It's a big grant. So, and we told everybody at the um reserve day to put in a good word for us. Yes, definitely.

[laughter] We've had a had compliments on the new way we're doing the brush pick up and and um that's gone nicely. Um I'm just I'm in awe of how our community's coming together and the activities that we've been having and and uh people are taking party and so, thank you very much and that sense of community is what's so important here. Now, we need to go into a closed session. So, I'm going to shoo everybody out. [laughter] So sorry.

So. And and I just want you to know that the recreation [snorts] committee is more than just trails. It's involves a lot of different areas. So, anyway. Thank you. Yes. Mhm.