Edgecombe County presents FY2026 budget framework: no tax‑rate change, $10.8M fund‑balance ask and proposed borrowing for school match and capital

Edgecombe County staff presented a draft FY2026 budget at a May 20 work session, asking the board to call a public hearing and providing staff recommendations that keep the county’s tax rate unchanged while planning to use fund balance and targeted borrowing to cover a set of capital and operating needs.

County finance staff and the county manager walked the board through revenue assumptions, expenditure drivers and risk factors. Highlights include no proposed change to the current county tax rate (the county’s working assumption), a proposed appropriation from fund balance to balance the recommended budget of about $10.8 million, and a recommendation to hold the line on pay increases in the proposed budget while leaving the door open to revisit a compensation adjustment later in the fiscal year if revenues permit.

Revenue assumptions and risk - Property tax: staff are budgeting ad valorem revenue on the current levy and a conservative collection rate (staff cited a target 96% collection rate for budget calculations). The assessor’s finalized valuations were provided and used to compute potential ad valorem receipts. - Sales tax: staff said moderate confidence exists that sales tax will meet the current fiscal year estimate but low confidence that sales tax will remain flat or increase in FY2026; staff therefore budgeted a $500,000 decrease in sales tax receipts compared with the recent high run rates and set a FY2026 sales tax budget of approximately $9.9 million. - Emergency medical services: staff said EMS revenue should approximately meet the FY2025 budget; staff are reviewing fee schedules and may propose rate adjustments in future budget updates. - Inmate housing: the county’s inmate‑housing revenue has fallen from the prior high‑revenue years; staff lowered next year’s budgeted revenue accordingly. - Investment income: the county has seen higher investment income in the current year; staff kept a conservative $500,000 estimate for FY2026 rather than budgeting current year over‑performance.

Personnel and benefits - Staff recommended no across‑the‑board cost‑of‑living adjustment (COLA) in the proposed budget as presented at the session. Commissioners and staff discussed the political and organizational trade‑offs of adding a COLA or other pay steps; staff said a 2% COLA would cost roughly $700,000 and that a 5% increase would exceed $1 million. - Health insurance: the county is self‑funded and staff recommended budgeting a 6% increase in health insurance cost for FY2026, while continuing the current plan structure (PPO option plus HSA high‑deductible option with the county HSA contribution). Staff proposed continuing the existing $250 wellness incentive program and chronic disease management offerings. - Compensation progress: staff described prior multi‑phase work to close market‑pay gaps and said the county remains behind some neighboring counties on selected classifications; staff emphasized retention, credential incentives and targeted hiring flexibility as tools already in use.

Positions, reserves and overtime - Departments requested multiple new positions; staff declined to add most new full‑time positions to the proposed FY2026 budget and kept 41 positions in reserve across departments to maintain flexibility. Staff removed several previously reserved detention slots from reserve after discussion with the sheriff and adjusted overtime budgets accordingly.

Capital, borrowing and prioritized projects - Staff reported total capital requests of roughly $5.7 million across departments, then recommended paring that list and pursuing targeted borrowing for high‑priority items rather than appropriating large annual capital sums from fund balance. - Two borrowing packages were proposed for board consideration: (1) a capital/maintenance/equipment package that includes infrastructure projects (notably an estimated $584,000 low‑voltage/electrical infrastructure replacement in the Human Services Building identified after a smoking/overheat incident in building bus duct), and solid waste equipment prioritized at about $725,000; and (2) the county’s anticipated match requirement for the North Edgecombe School project (roughly $3.2 million as budgeted in staff projections). Staff said borrowing would be scheduled to match project timing and that Local Government Commission (LGC) approval is required before closing loans. - Davenport (bond/financial advisor) analysis included in the packet shows the proposed borrowings would remain within the county’s formal debt‑policy ratios (10‑year payout, debt to assessed value, debt service to expenditures) if structured as recommended; staff cautioned timing and interest costs could affect near‑term cash requirements and noted that loan interest could begin to accrue before principal payments depending on project schedules.

Other recommended fiscal actions and operating items - Solid waste: staff recommended increasing the municipal solid waste tipping fee from $75 to $79 and increasing the household solid waste fee shown on the tax bill from $1.25 to $1.50 to partially cover rising transport/disposal contract costs. - School roof: commissioners approved jointly with the school board an Edgecombe County Schools request to use state lottery funds to pay $180,000 to repair the roof at Baskerville Elementary School (the board voted to approve the school’s application earlier in the session). - Outside agencies and ‘getting off the list’ discretionary funds: staff set aside $200,000 for community/‘getting off the list’ discretionary grants tied to the board’s four focus areas; staff received about 25 proposals and said the budget allows for a committee review and later appropriation after the fiscal year begins.

Legal and other matters - During the meeting staff requested a closed session under North Carolina General Statute §143‑318.11(a)(6) (personnel) and (a)(3) (attorney‑client privilege) to discuss personnel matters and two pending solar‑related lawsuits (Swift Creek Solar LLC v. Edgecombe County and Brightleaf Solar LLC). The board voted to enter closed session; no details on the litigation were discussed in open session.

Board action requested - Staff asked the board to call a public hearing on the proposed budget for the June 2 meeting; the board voted to call the public hearing.

Why this matters: The proposed FY2026 budget holds taxes steady but relies on a substantial appropriation from fund balance and on carefully timed borrowing for school construction match and capital infrastructure. Staff emphasized revenue uncertainty (sales tax, inmate housing) and rising benefit costs as drivers and urged the board to monitor mid‑year results with the option to revisit compensation or add capital if revenues trend better than projected.