Board of Commissioners - Regular Meeting

Good morning, everyone. This, the May 20th, 2026, fiscal year 26-27 budget workshop is hereby called to order. And I will immediately turn this over to Andy Garland.

We presented the budget at your May regular meeting. And now we just want to provide an opportunity to talk about it with the board. We had a workshop back in April and discussed the CIP and also some organizational changes, positions that we were looking at. Obviously, once we went to balance the budget, there were quite a few things that didn't make it into the final budget. from the discussion in April. So we're gonna talk a little bit about that today. I think Amy's gonna start out with a presentation and just kind of go over some general background information about the budget and how it's structured just for everyone's benefit including the public. And then we can kind of get into the details of the budget and some of the changes that we made from the April workshop and certainly take questions from the board. I pulled it up on the screen, but you can take it over if you want to.

I probably need the number.

It's not showing up on my computer.

If you want me to do this, then.

Yeah, the whole board is not showing up. Do you mind?

It's good.

We're good. We need the website. Which website? Our budget is on the website. All right. Good morning. So I know we have a couple of new commissioners, so I didn't want to. I know this might be repetitive for some of the commissioners that have been through this last year, but I know the budget is a very long document and I'm trying to make it maybe a little bit more digestible. And we the first thing we wanted to do is kind of look at the budget online just so you can kind of see how it's broken down. And I did want to say it again, it is very long, but we do submit our budget to the Government Finance Officers Association because we want them to judge us for how transparent we are and meet their high standards. And so there are some items, especially in the beginning, that is really kind of like a, we try to break it down in layman's terms, but it is some accounting language for the Government Finance Officers Association, so that is why there's some extra parts in there, but we think it is beneficial to the town, and again, we just do wanna meet the highest standards we can and be as transparent as possible. So Andy, do you just wanna go to the town manager's budget?

The town manager's budget?

Yeah. Oh, wait, my huddle hub is finally on. So what is the number? I guess my computer just needs to... Andy, you might have to get off of it for me to get on. Sorry. I'm having a really hard time with this stuff. Okay, so I'm gonna go ahead and roll to the budget. On our website. All right, perfect. So the table of contents are linked so you can try to navigate a little bit easier. But, you know, at the beginning of the budget, again, we have the manager's message and we have a sample ordinance. We have our financial policies, which are required for the Government Finance Officers Association, which we'll talk about that a little bit today. And we just have some background information, like a community profile for somebody reading our budget that might not be a Nags Head citizen. And we do have our... debt schedule in here as well as our capital improvement program schedule. And we have the schedule of the capital investment fund showing you what's coming out of it, which I'll talk about that today as well. But just for expedience purposes, I'm just going to show you one of our budgets and how we kind of laid it out. So this is just the town managers and all the departments are laid out the same way, but we just have a description.

Can you zoom in a little bit?

Yes. I should have opened the PDF.

Is that better?

We have a description, we have the org charts, and then each department head is responsible for updating their accomplishments that they've achieved over the last year or some of what they're still working on. And then we have the goals and upcoming projects, some of which are reflected in the budget, some are just some ongoing items. we really do try to tie it to our strategic plan which that is also part of the gfoa transparency when they look at our budget and i did add this little part with the pictures under here that wasn't in the budget i gave you all because after we prepared the budget i read the comments from the gfoa and i thought this was kind of cool that they suggested that the icons that we use in our strategic plan to identify those as part of the goals that we've accomplished. So I've put some icons there that shows you some of the things that we're working on or have achieved through those icons in each department. And then we get down to the highlights, which we'll go over some of the highlights, but these are a lot more in depth than what's in the manager's message and also more in depth than what we'll talk about today, but they're just, again, the highlights of each department. And then we have just a chart, a summary page that kind of breaks it down by capital, operations, personnel, and a comparison to other years. And this has like what we estimate is going to be in 26 and then what the adopted budget was in 26 and then what is in 27 and the changes. And it's broken down by type, personnel, operations. So then you get to the budget and line item budget and it's again broken out by the type of account, personnel, operations, capital. So on the left hand side is the financial plan and I do want to reiterate that the financial plan is just a plan. When you adopt the budget, it does not get adopted. It can change. It's just a planning tool. And then in the second column you have the departmental requests and then you have what is the managers recommended. And then all other columns just are there for comparison purposes, the adopted budget, the amended budget, what we project through the end of the year and then the prior to fiscal year's actuals. And Then behind those we just have the capital outlay breakdown for each department and the debt service as well. and then on to the next department. So that's how to read it, so I don't know, happy to answer any questions as we go along, or if the budget was a little confusing, I know it's a lot to digest, I'm happy to answer any questions, but that is how we have it laid out, and at the end we do have the fee schedule, which we do have some changes in the fee schedule that we've highlighted, that will be part of the budget adoption process, and just a glossary of terms. an acronym so that's just kind of at the end of the budget but there's unless there's any questions I can move on to the presentation no questions no questions all right whatever that. So one part of our budget that is a very large part of the budget that might make it look larger or budget larger what it is is the capital reserve funds. So the capital reserve funds are legally consolidated funds into the general fund and that would be the what we call the original capital reserve fund and then the capital investment fund and they cannot by statute in accounting standards they cannot have any activity going in and out of it all they can do is hold money so the only activity that we're allowed to have within those funds is transferring money in and out between the general fund So the first capital reserve fund we have is just the capital reserve fund and that is what we use for holding our beach nourishment money both for beach nourishment taxes coming in, they go there, facility fees go in there and then when we pay for things they come out of there. And that's just done between a transfer. The capital investment fund is funded annually through our general fund appropriation. And as we work to balance the budget, we found ourselves cutting that a little bit more to help balance the budget. And this year we did use we are using more of the fund balance in CIF than what we were putting in. So that is one way that we were able to balance the budget. And the CIF pays for debt service, capital, and large maintenance and repairs, and of course our public service complex debt. That's probably the biggest thing. And the way that its budget is, in the budget there's a department called Interfund. And the Interfund is the general fund contribution to the Capital Investment Fund, as well as the beach nourishment taxes that we collect, the MSD taxes and town-wide, and then the facility fees. So that is the Interfund Department, and I believe in the budget it's one of the first departments. So that's why that number is so large, because all of our beach nourishment taxes we collect and the general fund appropriation to the Capital Investment Fund, that is that fund. And then in the general fund, you'll see a revenue source called other financing sources. And those are the transfers coming out of those capital reserve funds. It's the beach nourishment debt service money funded through the beach nourishment taxes. We show that as revenue coming into the general fund. As well as the capital outlay debt service, all of our CIF expenditures those flow into the general fund as revenue. There's a table on the budget on that, again, because we cannot record, we have to record them in the general fund. Those are very large parts of the budget, but maybe confusing, so I try to, break it down so you might understand what that is a little bit more. And sorry if this was repetitive. All right, the next part of the budget, it's not really part of the budget, but just kind of a recap from this year is the fund balance. And we do have a large part of the budget in the beginning is dedicated to talking about revenues, projections, and fund balance. And again, that's in an attempt to be more transparent. So I encourage everyone to read that, but just to give you the cliff notes on that, I've copied these tables from the budget and condensed them a little bit more, but part of our budget, like I had said, we do have our policies in the budget, our financial policies, and our general fund policy is that our unassigned fund balance audited must be 25 to 35% of general fund expenditures, and that's a board policy. Anything above 35% gets transferred to the CIF. And again, these are board policies, but they're also based on GFOA best practices. So last year, we did not transfer anything to the CIF. And this year, I don't think we will either. But we will be within policy, and I feel like it will grow a little bit. But again, these are just estimates as of the end of April. So something can change. But I do want to reiterate that this budget was prepared with the assumption that both the CIF and the general fund will be within policy. The CIF does have its separate policy. It's 25% of audited expenditures, and this year I think it'll be at 40%. but again um the way we've kind of balanced the budget and i think andy's going to talk a little bit more about that for 28 is kind of dipping into that even more we did budget the land and water fund grant the four million dollar grant in 28 as a placeholder and are kind of using that to help balance the budget but again it's just a plan and just you know a talking point for a starting point for a discussion um so that's where i project us to be with fund balance um Unless there's any other questions, I can go to some of the highlights that I showed you.

Can we pause there for a second? Yeah. So for the Interfund, Amy mentioned that we budget revenues and expenditures, and there's an Interfund line item. And I just want maybe some help from Amy explaining, you know, when you read the budget and you're trying to figure out, like, what we're actually spending. Like, how much money is the town spending on stuff, like real stuff? Well, the Interfund sort of double counts things to a degree. And so that's something to be aware of. Like, if you're looking at the bottom line of our budget, which is $35 million, Well, that includes the inter-fund, which is the transfers of revenues and expenditures, so it's sort of double counting things. And so, no, the proper way to figure out what we're actually spending in terms of capital and personnel and things like that.

Well, you could probably, just a quick and dirty way off the top of my head would just be to subtract that department out.

And so that's something to keep in mind if like the inter-fund transfer shows up as like a $7 million line. Right. Even though we have a $35 million budget, we're probably only spending $28 million. Right. Because the way you're required to budget to show the transfers between the capital funds and the general fund. And so I've been asked that question before, and it is confusing, so I just wanted to stop and point that out, that it is important to understand.

Definitely.

Because when we get into strategic planning, like financial planning, which we keep talking about needing to do this year, We're sort of going to have to break it down into, okay, personnel costs, operating costs, capital costs, and so you're kind of not looking at these reserve funds as much when you're doing that. You're looking at what your actual costs are. And so just pointing that out. And then the fund balances. So it used to be we only had a fund balance for the general fund. and our fund balance policy is 25 to 35 percent so it's a range we have to stay within that range now the lgc has a policy on what we were required to maintain by law i mean can you talk about that a little bit i think there's recommendation is eight percent and it just is meant to cover a certain amount of months if something happens but this is based on the gfoa best practice and it does take into account like we do live in a hurt can get hurricanes and so um this is more modeled after the gfoa best practice recommendations and the town has always tried to be way above the minimum requirement of the what you see eight percent is low especially for a coastal community at one point i think our fund balance policy was up to 50 we were never achieving 50 And it didn't really make sense for us to hold that much money. And so we kind of settled on this 25% to 35% range, and the range being that each year is different and it's going to fluctuate. And so when Amy says we're not contributing money to the CIF, well, basically, once our fund balance hits 35% or goes above that, any extra money goes automatically into the CIF to help pay for capital items. So last year, and then she doesn't expect that to happen this year, we're probably not going to break that 35%, which helps us in the CIM. We're still well within the policy, but sometimes it happens because we just don't spend as much as we budget. And that is reality every year. You do your best job budgeting, but sometimes you don't spend everything you budget. because you budget conservatively. And then sometimes you might spend more than you budget, but I'm not sure that's a really good idea.

Well, and also, you know, when our share revenues were so high and we didn't know that that was going to happen, that would be another reason. But that's not happening anymore.

Windfall. So, you know, we might get into this discussion once we start more financial planning discussions maybe next year. The fund balance policy for the general fund probably is good. The CIF fund balance policy we could probably look at because we're holding a lot of money in the CIF too, and that's making it more difficult for us to balance the budget. And so how much do we really need to hold in the CIA? The CIA fund balance is not like the general fund fund balance where we have a big disaster. It's there to help us. It's really to help us go year to year and cover larger expenses. Like if you have two trash trucks, you have to buy in one year. you don't have to finance the second truck because you've got that fund balance in the CIF. That's what it's really doing. And so do you need to hold 20% as a fund balance in the CIF? And so when we start talking about that at some point in the year, that'll be a question for the board. Because the board will be faced with, well, do you raise taxes so you can maintain a 20% fund balance? That's harder to sell.

Yeah, Andy and I have had that discussion. I think actually it used to be 25%, and we dropped it to 20%. The board obviously dropped it to 20% to help for that very same reason. So yeah, definitely a good discussion to have.

And those policies that we adopted in 22 and 24 are in the budget for anybody who's interested. Yes.

This page 34, all the policies are listed out.

All right. And while we're sort of at this pause, and I don't know when I might get to ask this, so using state street aid for capital projects, is that what was typically called Powell Bill?

Yes.

I'm a little surprised we can do that.

will have a little the requirement it's a statue we have to any power bill money that the state gives us we have to hold in our phone balance so that has to be accounted for separately so we can't just it's not just considered like a general fund revenue so we hold a fund balance in there and you'll see it in our financial statement so One of the things I was gonna talk about too is we have a fund balance policy that we've been carrying over and so we're using that in 26 to do the streets project. So instead of using any general fund money or CIF, it's coming from, A, what we have in the fund balance, and B, the appropriation we get every year. So we're using that, which we have to keep separate, and that part of the fund balance we can only use, I believe it's under the restricted part of our fund balance in the financial statements, but we have to have it separate, and we can only use it for streets projects. And we actually report it to the state every year, too. So, we did use the PAL bill money to help, which I'll talk about later, to help balance the budget. We also appropriated $500,000 of fund balance, which you'll see, I think the fund balance appropriation was 685, and 500 was general fund, and the 185 was the fund balance, sorry, the PAL bill appropriation. So, I know it's all fund balance for the purposes of financial, but it is two different pots. And we did, again, use more of the CIF on balance than we're putting in. So we are kind of drawing those down. And that's really what helped us balance the budget this year.

But the CIF on balance is still at 40%.

It's within policy. It is budgeted to be within policy in 26 and 27 and 28. but it keeps getting lower.

And we'll talk about that more. I mean, you know, I think I've mentioned this, you know, you've got rising personnel costs, rising capital costs and debt, which we continue to accumulate. And so at some point, you know, we've got to be careful with some of this stuff because it, it takes away from this capacity that we have to do all this extra capital work. I mean, that's shrinking. The money in the CIF is shrinking because, I mean, there's another slide that talks about how much debt we have now. We've added a lot of projects, and they're all town goals and good things for the town, but that's why I say when we want to be a little bit more strategic about when we do things and how we do them, that I think setting out a plan for the next five years or so, like when we talk about the big one would be the fire station, like what does that look like? Because over time the debt starts to come off, but like the public services debt's 20 years. The other debt we have's not so long, so. Yeah, go ahead.

Unless there's any other questions about this, happy to answer. But I think we've covered everything that Andy and I want to talk about on swim balance. But next, we do just wanted to, I mean, I'm not going to read all these because you can see them. But just some of the, you know, wanted to call out some of the big initiatives that we're doing. Andy did talk about the fire station. We do have two traffic signals going in, one of which the Outer Banks Visitors Bureau is helping to fund. Beach accesses, and that is funded through the Capital Reserve Fund, through the beach nourishment taxes and beach nourishment sales tax. We get extra sales tax from our MSD levies that we're using to pay for these beach accesses. We did apply for a CAMA grant. We should be hearing if we're invited to the final application soon um we're starting to design the harvard bath house and we did get a 400 000 grant for that for the construction from cama and my plan is to ask for the rest from the visitor's bureau so that's what i'll be applying for um in in the fall We have a sanitation truck, a culvert cleaner, police vehicles, and we do build in a slight contingency for capital items through the CIF because we seem to need it every year. And then just some water projects are a water main, an excavator, and a vacuum trailer. So those are just some capital items.

One of the things, we do a CIF contingency because it used to be like we were budgeting contingencies for every single project. Yes. We don't always need it, and so having sort of a centralized contingency allows us to not duplicate contingency for every project.

How long did the culvert cleaner last? I thought we bought that in 18, 17, 18, 15. Oh, okay.

And it's getting warm. It's warm. Okay.

That's a lot of work.

That's a lot of work.

Yeah. Okay. Thank you.

I don't know that much about the culvert cleaner, but just that kind of machine, it doesn't last that long, just the way it's constructed.

That saves a ton of time, though. Yeah, it does. I mean, before, there was multiple employees to do one day's work on that, I remember.

If you came to the public services open house yesterday, you'd learn a lot about the equipment. But so Stephen was showing me the Ventrac. I don't know if you've ever seen that. So it looks like a riding lawnmower but it's got this circular blade on it and he uses it to edge the multi-use path along the bypass and you basically set the blade and you ride along there and he said he could do almost the whole thing in a day. He said it used to be like four guys working for two days straight to do all that.

and i mean just one other thing i think andy talked about this maybe at our last budget workshop or in the cip but the vacuum trailer is we did budget in the waterfront because it's mainly going to be used for them but it is going to also help us with um cleaning out the culverts i think um it'll help us clean up along the bypass yes this discussion we had this past year about

cleaning out the drainage system along the multi-use path you know it's a much more efficient and safe way to do it with this vacuum trailer and then we have a water line break they can get in there with the vacuum trailer and suck all the water out of the hole and get down and work it makes it a lot more efficient it's like yeah we're going to share it yeah it's a great piece of equipment they were very excited about it there was a there was a little bit of a fight internal battle

Got that worked out?

I think so.

I think they're happy about it now.

Andy alluded to the debt. And taking out the beach nourishment, it is about $0.05, $2.5 million. And again, it's going to be the public services complex. The water part is not included in that $2.5 million, but I did just want to break it out just so you could see and be reminded that we are paying for it from the water fund and the general fund. the workforce housing that both units with the fitness facility. Next year's project is the multi-use path around Jockey's Ridge from Carolista to West Downside Road. We did receive a very generous $750,000 grant from the visitors bureau that will really help defray that. We have two fire pumpers which is kind of the norm that we carry debt service on two fire pumpers at least since I've been here. The land that we purchased recently and then I know this might sound weird but it's an accounting thing because everything now you know is a cloud subscription and so if you have a contract for those IT subscriptions that is you have to record that as debt service. And that is a government accounting standard that we have to do. So like the license plate readers, the body-worn cameras, those are debt service payments. And then of course we have our first beach nourishment payment, which I think they timed it so we're actually paying our beach nourishment debt service and the public works debt service on the same days. So that kind of makes it convenient. I think our first one for this will actually be in December. And then personnel, again, these are broken out, but we do have a 3% cost of living. We talked about the health insurance increase. We're not changing the 100% for employees and then the 80-20 split for dependents. We do have a new position being requested in facilities maintenance heavy equipment operator. Planning has requested, and Andy's recommending, to instead of just having a seasonal event assistant, just having that be a year-round part-time person as the events have grown. It'll be a 1,000-hour position without benefits. Making the Ocean Rescue Captain exempt, and you maybe could tell in the budget that we moved his salary and his position to Ocean Rescue full-time. and additional hours for part-time firefighters. And some of the things from our engagement survey that we included are, we had talked about these doubling, the flat rate longevity amount, and I have a chart here from the last one that I can show you. We do have a retainer for mental health counseling um i think anybody can use it but it's really meant for like emergencies um and and really you know if if the fire police department are experiencing some traumatic event it would they could call on this person um and another another non-budgetary item is a mental health day off, which that not only spoke to the engagement survey, but it aligned with the pay study recommendations that for our benefits, we have one less day off than most of our other peers that we compared ourselves to. So that meets both of those recommendations. And just the longevity, it's going from 500 to 1,000 and 1,000 and so forth for the flat rate. The people that are the percentage based, hired before 7-108, that is not changing. They are grandfathered in. Just want to make that clear. Unless there's any other questions, we just can kind of talk about what we've changed from what we originally showed you as we were trying to balance the budget. So unfortunately, the fiber build out at Bonnet and Dowdy got cut, but maybe one day we can put it back in. And we did cut a sanitation knuckle boom. Really, those were the only two things that we really cut. Everything else we kind of value engineered. with david is that what is that the right word okay um so um he helped us figure out you know how to cut the cost of the multi-use path um the parks and rec plan we did cut that a little bit but we already had 20 000 that we've carried over from last year And we are actually, we do have capital reserve fund money to use for that. So that helps with the CIF fund. And again, we already talked about, we did cut back on the streets and stormwater project, but we consulted, of course, David made that recommendation, what we could do. And we are using all the Powellville money.

Can we talk about some of the stuff a little bit? So the streets and stormwater, so every year, you know, we have a project that we kind of had planned out. And we talked before about sort of a 20-year plan to repave all of our streets and combine it with drainage and water projects. So we had a year seven is the year we're in for the plan. And that included a variety of different projects. So we went through and looked at all of that. And some of the projects required engineering. um for some of the storm water work we sort of we sort of focused on the projects that did not require engineering that you know mainly involves swale work and so that saved quite a bit of money and then there were a couple of streets when we went back and looked one was i think ray eagle street the other was lone cedar court ray eagle was paved only 10 years ago and so that's something that wasn't accounted for when we did this 20-year plan And then we kind of looked at Lone Cedar Court as one of the newest subdivisions in the town. And so we felt like that's something that we could defer to a later phase of the plan. So between not doing this two streets and saving on some of the engineering costs, we brought the cost of that project down significantly without really sacrificing, I think, our goal of what we're trying to do. And then with the multi-use path along Jockey's Ridge. So that's in the budget. Amy mentioned we got a $750,000 grant from the Visitors Bureau to help with that project. I think the original budget estimate was like $1.9 million. David went back and looked at the path, and he brought that down, as Amy said, over $200,000. Now, we're meeting with the state Jockeys Ridge staff today about this project. We already met with DOT about this. We've tried to maintain a 10-foot wide width for the multi-use path throughout the town. This is one section. We'll probably squeeze that width down a little bit. We are looking at doing some bulkheading in this area. not extremely long areas, but a couple hundred feet and it would be about four feet tall. But one of our goals is to stay within the right of way and not get back into the park with any of the work. We're gonna talk to them about that today. They might have a different opinion of that. you know the sand continues to migrate out into the road there's going to be maintenance with this we know the sand is going to fall down onto the path and we're going to have to do that whether or not they want us to get in and do a little bit more grading is is kind of up to the state but it it also affects our permitting because once we get outside the right of way permitting i think becomes extremely difficult And so some of the things we're going to talk about today, but part of the way we saved money on this was by squeezing the width down of the path a little bit. That brought down the height of the bulkhead and the lengths of the bulkhead, and it also saved on the concrete. And there is drainage that's going to have to be done in these areas, too. And so it's all part of it. We won't really know the cost until we design it and put it out to bid, but the goal is to have a design ready to go so we can put it out to bid and start in the fall. Probably, I think David said October 1 was the goal to start and get that project done.

So what's projected size if you're squeezing it down?

So I mean, it would be ten, ten feet where it could be ten feet, but in some cases it would be eight and it's as low as six feet. But that's only for a fairly limited section.

Do you recall that?

That's still pretty big. You know, a six foot wide sidewalk is still fairly generous. I mean, It's not what you would typically do for two-way traffic, but you're trying to squeeze through an area and there's a lot of constraints.

So I know the extra width does allow us to drive some pieces of equipment on the multi-use path as we're doing maintenance or work along it. So the reduction in width might have an effect on our ability to drive some equipment.

It might, but you've still got curb and gutter, and then you're going to have a little bit of a clear space between the back of the curb and the path. So with that, I think you'll still have at least... What, 10 feet?

12 to 15 feet toward the wind. So that's . OK.

And it's curved away from the highway, so the separation from the highway is a curve and it's... Yeah, I mean, just like in the northern part of the town, we have sections of the path that are curved with the stormwater infrastructure. And so we have to put a curve in because DOT requires that the path's going to be within a certain distance of the edge of pavement. You have to provide that curb and gutter. I think once your path gets at least 10 feet off the edge of pavement, you no longer have to do the curb and gutter. So we've done that in areas where we've been constrained, putting in that curb and gutters, the additional barrier.

That'll actually help with people that like to pull off the side of the road there.

It's hard. It will definitely be hard. And they do. It's definitely something that I wanted to pause on that. The board should be aware that this is how it's being. We can come back to the board and present the final design. or draft design before it gets finalized, but something to be aware of now. That's the thought process in order to not get back beyond the right of way.

Can somebody explain to me what Power Bill is?

Sure, Powellville is the funds the state Department of Transportation provides every community to maintain public streets. And it's for local streets, so it's not for any obviously DOT maintained streets. And NAG said we've got US 158, NC 12, and 1243 are the state roads. But it's for us to maintain our publicly open local street so it wouldn't include any private streets in town and we're limited on what we can use that money for okay it has to be for for certain things and you know it can include obviously street paving drainage work along the street segments signage things like that but there's a policy we follow for what we can use it for okay and it's not much money relative to the cost of paying we get about 120 000 a year And that's for us to maintain how many? 37 miles of streets. 37 and a half. 37 and a half. And nobody gets enough to do what they need to do. So you have to end up using your own funds to supplement that.

OK. Thank you.

And I don't know where the name Powell bill comes from. It was the man. The man?

Mr. Powell.

senator or whoever it was. And I know that you get it based on your percentages of mileage as a whole in the state. So not everybody gets the same amount. The more mileage of street you have, it's distributed proportionately based on the mileage of streets that you have to maintain across everyone in the towns in the state. Raleigh's going to get more than we are. We all don't get the same. and then i guess just kind of piggybacking on to some other things that david was helping with he has graciously um agreed to do the remainder of the beach road multi-use path saving us a hundred thousand dollars over two years um and then also designing the finch to forbes

water main so that's going to save us between those two things it'll save us like two hundred thousand dollars so we had budgeted for consulting to do the engineering for the remainder and david's going to do it in-house so when you think of being able to raise taxes less think of dave yeah yes all these cuts are thanks to him everybody doesn't have a date yeah thank you I had added this slide.

Oh, okay. You added that today. Like after 8 o'clock this morning.

Yeah, so this just goes along with what we discussed in April, but we had this long discussion in April about our long-term goal for ocean rescue. And the long-term goal was to move our ocean rescue captain to full-time and do that position year round rather than becoming a firefighter for four or five months. But also having a second position that could be sort of the backup in the summertime to the Ocean Rescue cap. And we've been relying on seasonal people to do that. And while that was our goal, that second position did not make it into the budget because we were constrained. So just wanted to point that out. Obviously we'll continue to consider that in future years or if the board wants to talk about ways we could bring that back, we could try to do that. You recall that the fire department and town manager's office and the committee did a staffing study for additional positions in the fire department. And the goal was to add, I think, three additional positions was the recommendation to the fire department to staff at Station 16. And there are a variety of reasons for that. And we can talk about that more later if you want to. But in lieu of being able to do that, we have been budgeting part-time hours. And they have a part-time pool of firefighters that they use to supplement their staffing. And these are folks that are certified and work in primarily other local agencies. And they come and fill shifts for us to help us meet our staffing levels. And we've continued to do that in lieu of being able to add full-time positions. And I think we added another 10,000 or so to that this year. And I think about $70,000

I think when I looked in the budget yesterday, it was like $77,000 or something like that.

And they are using those hours. We get to a point where if we add enough of that, you're almost at a full-time position. So that's something to think about. Just wanted to point that out, though. We've talked about an HR assistant that is being recommended in the budget, but that is just a sort of reorganizing existing staff, and so it's not adding additional headcounts, and the cost of that is minimal. But you will see when you adopt or consider the pay plan in the org chart as part of the budget in June, you'll see that new position will be in admin services, obviously, under the director of human resources, which is Jan. So water, so we, the board just approved a change to a position in water at the May meeting. It was to take a position that was in water operations and make it a floater position. So that's essentially already been done and there was no cost to that. It was just to try and make that whole system a little bit more efficient. And we are considering some other changes to the water department very soon. And I'll be coming back with some more about that here to the board probably in June. Those discussions are ongoing. I didn't want to say too much about that right now, but we've got some opportunities we're looking at for the water department. And then customer service. So Part of the reorganization to be able to allow for the HR assistant is moving some staff around internally. And so we are doing that. But essentially, that will result in the customer service person that works at Public Works. And we have an administrative supervisor in Public Works. And we also have a customer service person in public works. So the customer service person in public works would be going to a part-time position. And I don't know if you want to talk about this, but we've got a part-time position that works at Town Hall now. And so that would be changing. That essentially would be transferring down to public works. And then we would still have a full-time customer service person at the front desk at town hall. But the net result is we felt like we could... still meet the goals of the Public Works Department and our customer service functions there with a part-time person as opposed to a second full-time person at Public Works. And that's just looking at their duties and the amount of foot traffic that's coming into Public Works. It's certainly not as great as Town Hall. And in the customer service at Public Works, just so you're aware, it used to be that the brush yard was only open three days a week. And now we are open five days a week at the Brush Yard. We did that when we opened the new public services facility. We have a part-time person that works the Brush Yard three days a week. And so the office personnel at Public Works, they fill those other two days by sort of switching off. And that will still continue to happen with this new person. so just wanted to give the board a little bit of background on that even though that's not really impacting the budget per se those are some organizational changes and just trying to look at some more efficiencies we could achieve with what we've got which i feel like we have to do because things are getting tight yeah and then um as as we mentioned the facilities maintenance heavy equipment operator this was really the one position that we did recommend in the budget Because the facilities maintenance department, they can never have too many people. The load has grown drastically with the amount of facilities and the maintenance load of the town. And so they continue to find ways to be more efficient. As I mentioned, the Ventrac, but even with that, their needs are great. And having another heavy equipment operator and paying someone at that level is something that we really need and it's also going to help us during storms to have another position where we've got somebody we can retain here to do that and you've seen that with the snowstorms in the past few years but also hurricanes you know we continue to look at having our staff here to provide immediate service during these emergencies. That's a summary of the position changes that we're recommending or not recommending.

I did... take a poll of the other finance officers to see what they're doing. And I shared with them what we're doing. And so in 26, 27, at least in the recommended budgets, Manio had three cents. Kitty Hawk had one and a half cents. I'm not sure if that will get adopted, but the Kitty Hawk one and a half cents was to save money, kind of like a capital reserve fund for them to save money for a fire apparatus. And so when I tried to look at the 28 budgets for everybody else, we were the only one that I saw that had a two year budget, at least for this cycle. And so I asked them if they knew what was going on for 27, 28, and they really didn't. And Derek County's budget, like I had said, when we presented the budget, it kind of indicated that if things didn't change, they would have to have a tax increase or it would be anticipated, I guess. And Southern Shores, in their budget, they did say they were probably gonna have a 27, 28, so I asked them and they said maybe two to three cents. Everybody else, they really didn't know. Kitty Hawk, did say that they weren't going to have a tax increase for the next five years. I don't know how you... That's a bold statement. So I was like, okay. But that's what everybody told me. Interesting.

Obviously, we meet monthly, the town managers, and the mayor meets with the other mayors. So we hear things, and I do think for the FY27-28 budgeting cycle, you're going to see other towns doing some things, too, because they've alluded to that. I can't say too much about that because they haven't published anything, but I think we can expect that.

Yeah, but even as Senator told us the other day, inflation's hitting everybody. No one is immune to inflation, and you're either going to raise your revenues or you're going to cut back your services at some point. There's just no way. While we're here and we're talking about planning forward and talking about next year, remind me about our recycling contract is that hope for renewal All right. That's going to be, it's probably going to be a tough one. You know, talking about cost and, you know, that cost is certainly going to go up and we're going to have to have a discussion about whether we're going to increase the subsidy for residents or for the users or whether we're not. So just something to keep, another thing to keep in mind.

Yeah, well, I mean, I guess probably around the first of the year, we'll get proposals for that service and see what that's going to be. Is everybody familiar with the subsidies that we provide?

How much of a subsidy do we provide?

We provide about $6 per customer monthly as a subsidy.

If the customer is signed up for it.

Right. And so basically the TFC, the vendor, has the number of customers, and they bill the customer for the amount they charge less our subsidy, and they bill us for the subsidy.

Okay. That's how that's been working.

and so i think that the cost just went up based on their contract and i emailed the board about that you know i think it was up to like 21 it's gone up quite a bit you know and i think tfc originally intended to have a larger footprint down here than they they've been able to achieve and so i don't think that works in our favor but they do still serve other communities down here The issue we've faced all along is there's just not a lot of vendors down here providing service to the out of banks. But we'll continue to explore what our options are.

Does the county contract with them too? With CFC? No.

No.

Do all the other towns?

I believe Duck does.

So just a couple of towns, not everybody.

And I think that was all I had prepared. Andy, did you want to talk about this slide?

This was just sort of a food for thought slide. And I've already touched on all of this in previous meetings. But when we look not to this year's budget for next year, these are just the things we're going to have to continue to think about. And I do feel like this year, we try to do a financial plan budget. Obviously the board only adopts one year's budget. The financial plan is what it says it is. It's for planning purposes, but there's so many things that are moving targets right now that are gonna affect our budget next year. It's really hard to be that accurate with our budget. And so we've got all these things affecting us, rising personnel in our debt and then flat shared revenues, all affecting our capacity. We know we're going to need additional revenue in FY28. We've put in as a placeholder a two cent tax increase for 28 to address this, but we'll have to do some more planning to see where that shakes out. And we've got several studies ongoing, which we've talked about the stormwater master plan, which you received a presentation about the water system master plan, you know, possibly updating our streets and stormwater plan. And then a water rate study, all those things could have major impacts on our CIP and our CIP might look a lot different next year than it did this year. And so we just know that there's going to be a lot affecting the budget and, um, That's why we keep saying we're going to probably engage the board with some additional financial planning this year to get ahead of next year's budget.

How much of what we spend on capital projects comes through the state in the form of grants, but which has a federal origin? In other words, it's a pass-through from the feds that comes through the state to the town. Do we have any idea?

I have a matrix of all our grants. I don't know off the top of my head, but I can just tell you really some of the big ones. like the multi-use path that we're doing now in south oregon uh the or project areas 12 and 13 at south oregon and inlet row the water system master plan and the stormwater master plan that's all arpa money that's all federal government money um but the project area four which is the bonnet street stormwater that is state money so those are like our really big ones so um The Bonnet Street one that we're getting ready to do is state money. And again, you know, some of it is local money, like from the Visitors Bureau. I'd have to look, I mean, I don't know off the top of my head, but I know those are probably like the biggest ones that...

I just, in terms of being more conservative, you know, I don't know if it will happen at the midterms or the next presidential election. At some point, the federal government is going to get a grip on its spending. It would seem seemingly, you know, the bond markets are sort of signaling that they're a little nervous about the federal government's position. I just wonder, you know, some of the pass-throughs we've gotten, like the ARPA, you know, We may never see those again.

And the CAMA grants are through the state, like with the Hargrove Bath House. But, you know, again, I don't know how the federal budget would impact the state budget either.

The big federal projects are sort of wrapping up at this point. We're luckily concluding a lot of that. be a little bit more nervous if we were just getting started. Sure.

Okay. But like the Land and Waterfront Grant, that's state money. So the conservation easement and the the RCCP grant, the living shoreline grants that we're doing, that's state money. So some of the the projects that we are working on are our state money. So.

Okay. Thank you. Yeah. In the past years, how much have you had to dip into that CIF fund?

In past years? Yeah. I'd have to look at the fund balance in the financial statements, but I think that, like Andy and I were talking yesterday, when we first started it, we had a spare $3 million laying around that we, literally, that we funded it with, and that was the start of it. But the fund balance has been declining every year, and I can't remember the gap between what we put in and what we paid. I'm sorry, I don't know off the top of my head, but we are... Like I said, I think in, just to give you this idea, in 27, so in 26, the fund balance is around 40%, but then it gets into the low 20s in 27 and 28. And again, the way we were able to do that is just to cut what we're putting in it. And like Andy said, another strategy is to reduce the fund balance percentage, but it is in the low 20s the next two fiscal years that we budgeted.

And that's available, that gathers interest rate as well, too, right?

Pardon?

That gathers interest, too?

Yes, so all our money is kind of pooled together, and then it's allocated monthly based on how much money we have in each fund. So in all the capital reserve fund, like the beach nourishment, those all get their own interest, and the POW bill gets its own interest. So, yes, it's all collected together, but then we allocate it based on the percentage each month. So, yes.

Thank you.

Yep.

Yeah, I mean, if you go back and look at shared revenues going back to, say, like 2019, you know, it was probably closer to $6 million. And then it grew to over $10 million. And so we had several years where we budgeted shared revenues here and ended up here. And then the board was trying to figure out how to spend extra money. So, you know, we accumulated funding. And there was one year... where the board bought trash trucks and vehicles mid-year.

It was when COVID, because we really budgeted low with COVID, and then it just boomed, and I think that's what started it all.

We were able to catch up on a lot of things during those years. It's a good problem to have.

I think that's all of our slides.

I know it's a lot to digest.

I asked some of my questions. The only thing I haven't really looked at are the departmental sections. But fundamentally, I don't have any concerns or questions about what we're doing or what changed since the last presentation.

Some of the, there was a planning, planning's looking at a new program to implement the Estuarine Shoreline Management Plan. So we've been focusing on these sort of big projects we're able to get grants for. But the large majority of the shoreline in the town on the Sound is privately owned. And so how do you help those folks? It's hard to directly help those folks with grants or funding. So the idea is to have sort of a technical assistance program. So we've budgeted $10,000, I believe. And so we would have a consultant Help property owners through grants to design living shoreline type solutions if they're interested, right? And so essentially they could apply for the funding and we could help them design something that meets certain criteria Consistent with the estimate shoreline management plan and then also help them try to find grant funds that are available like to dare soil and water there are programs out there that that people can take advantage of. So if a private property owner's interested in helping us implement that on their property, the Essendon Shoreline Management Goals, this would be a program to help them do that. It's sort of a pilot program starting off with $10,000. We wouldn't do this for very many people. We were looking at about $1,000 a grant. So about 10 properties. And we can see what the interest is in that program. That's the idea, and so that's something for the board to think about. If you have questions about how that would work, just let us know. Are you interested, are you not interested? Certainly.

That's all with grant money.

Sorry to interrupt you. That would be the town giving grants to private property owners.

But using grant money that we already have to give that grant money?

No, no, that would be using town funds.

Okay.

Using town funds. And so we have a grant program currently already for several years we've been doing with town funds, and this is for the beach. Are you familiar with the dune planting and sand relocation grant program? That's something that we've been doing with town funds through our municipal service district and beach nourishment funding pot. And so we have done that in the past, and so this is another thing that would be available. this wouldn't be something we've gotten an outside grant for like the septic health zero percent interest loan that was an outside state grant we got but we were just looking at doing a small pot of money um through the town okay so that that's one thing that's in there i'm trying to think we had perceptic health we added another ten thousand dollars to do some additional marketing and that's something that had come up with the septic health advisory committee so that's in the budget and we just wanted to try to develop a little bit more structured strategy and try to be consistent you know on what we're doing each year and so it would be to get some help from a professional firm to do something And so that's in this budget.

Trying to think about some other things that maybe we didn't point out.

I mean, I think I went over some of these in the presentation last month, but I just wanted to sort of remind everybody that these are items in there trying to accomplish different goals in the strategic plan. The dune management. And sand relocation cost share program, that's been hugely popular. So it's a significant expense. So that could be something to talk about later in the year. But if we start looking at our beach nourishment model, and we talked about also doing some planning for building up our fund balance so that when we get to our next project, we have funding available to help us so we're not financing as much. Well, that all sort of plays together. Like, what are we spending money on? Well, that's one thing we're spending a significant amount of money on. So it's something we could talk about.

as we're winding down the budget presentation a couple of other things and related starting with things related to the budget and the legislature and we do have requests before the legislature for funding for some projects Those discussions were, I suppose I would characterize them as promising, although the feeling you walk out of the building with is not necessarily the feeling you have a week later. But those were encouraging. It looks like they will have a budget this year. Um, team in Raleigh has put our request on every list, um, with, with every legislator who matters. Um, and we were able to talk to some of those. Um, and so I, I think we have as good a chance as any to, uh, get some of our, some of our requests funded, uh, this year. We'll see. What is less encouraging is on the policy side? I'll talk about that briefly that for the benefit of the public there are some There there are some legislative changes that would have negative impact on the town the town and their folks in Raleigh have been pushing back against those and One in particular that would remove our authority to set parking standards. In other words, to assign a number of spaces to any use. And we are continuing to push on that, but it went through a key committee yesterday. that's composed of about 18 people with only one no vote. And so this piece of legislation that's harmful to us has a lot of momentum. We are continuing to strategize. We will, I think Andy offered earlier this morning to go ahead and start putting together a letter last year um we led the development of a letter that was signed by all of the towns and the county that was in opposition to this and similar legislation so we will do that we will do that again we'll get that ball rolling we have a little bit of time So we can get that done. And then we will also try to develop our other alliances. We got a little bit of support in our effort from the home builders on this particular topic, the league. the league of municipalities um is waking up to this issue um and so we need to um we need to continue to sort of push on them and and build the alliance with them along with other towns and any other agencies that we can sort of gather together to to support our effort to push back on this. So we will be doing this in the time between now and our next meeting, and then we'll see if we have anything to report that's new and helpful at our June meeting. Anybody else want to offer any comment on that, you're welcome. It's kind of where we are.

I'd add just a couple comments that echo everything Mayor Kuhn has said, but I would like to thank Senator Hannig for voting against that bill yesterday and supporting us. And I've also spoken with several other elected officials from other towns over the last week or so, and they all reached out to Hannig, Senator Hannig as well. So I appreciate their work already in trying to help us with this.

That's good. Very good. Thank you. All right. Anything else, folks?

Amy, your slides, are they available to us?

We can put them on the website. We can email them to you. If you could, that'd be great. Yeah, sure.

Either one.

Yeah, we can certainly get you these slides and this presentation, the meeting's recorded. Right, that's true. Anybody can watch it, so I'm happy to do any of that.

I'd love the slides, too. Sure. That would help a lot.

And I think for the June budget, or the June... We have a public hearing scheduled at the June meeting. So I'm not sure the board can adopt the budget. I can prepare an ordinance. I don't know if there was any changes. We do have a tentative workshop scheduled based on the public comment, of course, if we need to have another meeting, if we have public comment about the budget. But I can go ahead and prepare an ordinance if the board would want to adopt the budget ordinance at the June meeting.

And that's what we typically do. Mm-hmm.

Yeah, I would say so. I mean, I know that the ones in the booklet are dated for the mid-June, dated for a mid-June meeting, but I think go ahead and date that for, and have those ready, and, you know, if nothing comes up significantly in the next two weeks or at the hearing, then perhaps we can go ahead and do that.

You haven't had much feedback, I mean.

no and you know and often we don't um you know um mayor moeller is likely to come and and comment uh one way one way or the other um and we have had a past years we've had a small handful of folks you know two or three show up to speak on the budget but generally we get we get very little and more often than not those comments are encouraging to sort of stay the path rather than sort of cut the budget.

That's it. We really appreciate your time.

Thank you very much for all the hard work.

Thanks to all the staff for their hard work as well.

Thank you, everybody. This workshop is adjourned.