Nags Head staff present FY2026–27 budget; CIF drawdown and placeholder tax increase flagged

Amy, the town’s budget presenter, told the Nags Head Town Board on May 20 that the recommended FY2026–27 budget is organized to improve transparency and meets Government Finance Officers Association standards. She reviewed the manager’s message, departmental pages, the capital investment fund (CIF) and debt schedules and showed how transfers between funds can make the total budget figure appear larger than the town’s cash operating spend.

Andy G., who led portions of the presentation, said the CIF and capital reserve funds (which hold beach nourishment and facility fees) are large line items that must be reported inside the general fund by statute and accounting rules, and that the town is using more CIF and fund balance than it is adding this year to help balance the plan. Staff projected the general fund and CIF will remain within policy in FY26 but noted the CIF fund balance declines under the current financial plan for FY27–28.

To reduce costs in the recommended budget staff cut two projects outright (a fiber buildout at Bonnet and Dowy and a sanitation knuckle boom) and value‑engineered others with in‑house staff. Staff described several planned capital items and grants: a $400,000 grant toward the harbor bath house, two traffic signals (partially funded by the Outer Banks Visitors Bureau), replacement sanitation and police vehicles, and shared equipment such as a vacuum trailer intended to increase maintenance efficiency.

Staff also reviewed personnel proposals: a 3 percent cost‑of‑living adjustment was built into the plan; the town is keeping the current health‑insurance cost share and recommended converting an ocean rescue captain to a full‑time, year‑round position while the second seasonal backup position did not fit the constrained budget. A facilities maintenance heavy‑equipment operator was recommended to meet storm response needs; other reorganizations (including an HR assistant position assembled largely from existing staff) were described as net neutral for headcount.

On transportation and public works, staff said engineers narrowed scopes to remove costly stormwater engineering and deferred recently paved streets (Ray Eagle Street and Lone Cedar Court) to reduce expense. The Jockey’s Ridge multi‑use path remains in the plan after cost reductions of roughly $200,000; staff said constrained sections may reduce the path width to as little as 6–8 feet and that right‑of‑way and permitting with state agencies remain open questions.

Staff told the board it has included a placeholder two‑cent tax increase in the FY28 financial plan to address rising personnel and debt costs, but emphasized that the two‑cent figure is a planning placeholder and that additional financial planning and public engagement would precede any proposed tax change. Staff also warned that recycling contract renewal next year will likely raise costs and that the town currently subsidizes recycling by roughly $6 per customer per month.

On shoreline and septic programs, the budget would create a small $10,000 town‑funded pilot to provide technical assistance for private property owners seeking living‑shoreline designs, and add $10,000 for marketing the septic health 0% interest state loan program. Staff described ongoing grant work (ARPA and state CAMA) and said some of the town’s big projects are funded with pass‑through federal or state grants.

Staff flagged a legislative risk in Raleigh: proposed changes that would limit municipal authority to set parking standards are advancing in committee. The town plans to organize a multi‑jurisdiction letter opposing the change; staff credited Senator Hanig for voting against the bill in committee and said the town will continue alliance building.

Slides and the recorded workshop will be posted to the town website. A public hearing on the budget is scheduled for the June town board meeting and staff said they will prepare an ordinance for possible adoption in mid‑June unless substantive public comment requires further workshop time.

The board did not take formal votes during the workshop; the session adjourned with staff noting next steps for public notice and ordinance preparation.