New Hanover schools face $2.5 million shortfall; board directs 10‑year facilities sustainability plan

The New Hanover County Board of Education was told staff projects a budget shortfall and an uncertain revenue picture as the district prepares next year’s operating budget, and the board voted unanimously to ask the superintendent to develop a 10‑year facilities and sustainability plan.

At the March work session staff presented a draft local budget packet and a summary of revenue and expenditure assumptions. Miss Sutton, the staff presenter, said the district used about $2.2 million in one‑time revenue in the current year — including a FEMA reimbursement the presentation identified as about $466,000 and the sale of roughly 13 acres at the Johnson Pre‑K Center for about $1.7 million — and that staff are budgeting roughly $554,000 in fines and forfeitures next year. Sutton also said the county appropriation in staff’s working proposal assumed a 2.33% increase from county commissioners, a figure staff contrasted with a previously requested 3% county increase.

Sutton outlined staffing and benefit cost drivers the presentation treated as effectively mandatory in the near term. Those included a 3% raise assumption tied to expected state action, a 1% retirement contribution increase and higher employer health‑insurance matching; staff estimated about $2.6 million in local employee salary impacts and presented total ‘‘mandated’’ increases of roughly $2,627,000. Sutton said enrollment decline will lower state allocations and that the district has modeled reductions, including an example of 39 classroom teacher positions that would reduce local supplement obligations by about $458,000.

The combination of the projected revenue changes, staffing costs and a set of prioritized requests left, in staff’s summary, an estimated $1.2 million gap at one stage of the review and a larger $2.5 million deficit after adding the line‑item requests the superintendent prioritized. Sutton asked trustees to mark (‘‘star’’) items that were choices rather than mandates so the administration could prepare a balanced proposal to present to county leaders.

Superintendent (speaker identified in the transcript as the district superintendent) framed the gap as a sustainability problem tied to longer‑term enrollment trends. He told the board the district had lost hundreds of students over recent years and that staff projections show continuing declines driven by birth‑rate and economic factors — saying the district could lose another ~1,000 students over five years in a high‑loss scenario. The superintendent said staff will continue to press county and state leaders for revenue but also recommended an internal plan to stabilize operations.

The board debate centered on how to limit cuts that would reduce instructional capacity while still balancing the budget. Trustees questioned technology spending, the structure of supplements and the feasibility of converting some vacant positions into trainers (for example, to address a bus‑driver pipeline problem). Several trustees urged staff to pursue grants and third‑party funding for nonessential items and to pursue greater clarity from the county on its likely appropriation.

On a related motion, Board member Josie Barnhart moved to direct the superintendent to develop a district facility‑use and sustainability plan; the motion was amended on the floor to request a 10‑year plan and passed 7‑0. The motion instructs the superintendent to produce a public protocol and timeline for that analysis and to engage families and stakeholders before any final decisions about facility closures or consolidations are made.

What happens next: staff will return a balanced budget proposal informed by trustee priorities and the superintendent’s proposed sustainability work; the district will also present capital outlay recommendations for county consideration (the board approved the capital outlay request later in the meeting). The board did not adopt any cuts or closures at this session; it instructed staff to prepare the 10‑year plan for future public discussion and potential action.

Vote at a glance: Motion to direct the superintendent to produce a 10‑year district facility/sustainability plan — Moved by Josie Barnhart; seconded; passed 7-0 (board present per roll call: Elder Boer; Melissa Mason; Josie Barnhart; Pat Bradford; Judy Justice; Tim Merrick; David Perry).