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Nags Head manager presents FY2025‑26 budget, warns of a sharp health‑insurance jump
Summary
Town Manager Andy presented a recommended FY2025‑26 budget (general fund roughly $31 million), highlighted a 59% health‑insurance increase driven by the dissolution of a municipal health trust and a roughly $440,000 cost impact, and outlined capital needs including beach nourishment planning and IT migration to cloud services.
NAGS HEAD, N.C. — Town Manager Andy presented the recommended FY2025‑26 budget on May 7, telling the board the general fund is roughly $31 million and that a sudden rise in health‑insurance costs and long‑term inflationary pressures are driving a more cautious budget approach.
"Health insurance 59% increase in value," Andy told the board, describing how the municipal health benefits trust used by hundreds of local governments is dissolving and requiring towns to secure new coverage. The town manager said that combination of trust dissolution and a high claim in 2024 means Nags Head faces a sizeable increase in health‑insurance costs — about $440,000 — under the proposed plan.
Budget highlights
- General fund: approximately $31 million. - Health insurance: town reported a 59% increase in insurance value and a projected $440,000 cost impact tied to the dissolution of the municipal benefits trust and high 2024 claims. - Insurance approach: staff recommended joining a new pooled, self‑funded style pool with voting representation for member towns to influence renewals. - Capital projects: continued planning for beach nourishment (permits submitted), a campus master plan first phase, a new public‑services facility and replacement of sanitation vehicles; the town reported an example where construction costs roughly doubled compared with prior projects. - Water fund: proposed 5% rate increase to keep up with operating costs; staff will review rate structure in FY2027. - Other items: IT migration to cloud services, continued grant work including a $4 million land‑conservation grant and $5 million in other large grants; pump‑out credit recommended to increase from $150 to $250.
Next steps
Andy said a budget workshop is scheduled for May 21 at 9:00 a.m. and that staff will continue refining assumptions as the board prepares for formal budget adoption. Commissioners thanked staff for the work and asked questions about revenue options and legislative requests to help fund major projects such as water‑line replacements.
