Nags Head adopts $35.7 million budget after debate over salaries, fund balance and multi‑use path

The Nags Head Board of Commissioners adopted the town's FY2026‑27 budget on June 3, approving an ordinance that sets total appropriations at $35,691,858 and that includes an updated pay plan, organizational chart and consolidated fee schedule.

The public hearing produced extended scrutiny from former Mayor Bob Mueller, who told the board he was “watching the pennies” and urged changes to avoid a $500,000 draw from undesignated fund balance. “The budget contains a half million dollars being taken from undesated fund balance,” Mueller said, arguing that the town should reduce or postpone some items to avoid using reserves and potential larger tax increases next year.

Staff said the proposed draw equals roughly a one‑cent reduction to what otherwise would have been a tax increase and framed it as a multi‑year planning choice. Amy Miller, finance staff, outlined recent, non‑material edits to the ordinance and described how staff reorganized positions to create an HR assistant without increasing net headcount. “There was a new position added in facilities maintenance,” Miller said when asked about components of the higher salary line; she also identified a converted seasonal events role and longevity increases as contributors to the cost rise.

Former Mayor Mueller flagged a roughly $1 million rise in payroll lines (about a 9.8% increase in the salary line overall) and questioned a proposed 3% cost‑of‑living adjustment (COLA), which he estimated at about $314,000. Staff explained the COLA was applied separately from a pay‑classification study adopted earlier and said the study set pay ranges using a market comparison; the 3% COLA was intended to keep ranges aligned with neighboring municipalities.

The budget also includes capital projects the board discussed at length, including a Jockey’s Ridge multi‑use path. Staff said the path’s total estimate has been refined to about $1.6 million and that annual debt service for the unfunded portion would be less than $100,000. The town has secured a range of grant and partner funding for the project, including a $750,000 contribution noted by staff.

After discussion, the board voted to adopt the budget ordinance, then separately approved the pay plan and organizational chart, the recommended Capital Improvement Program and the consolidated fee schedule. The motions carried on voice votes recorded in the meeting; the transcript records board members saying “I” in favor and at least one vocal “Opposed” during the roll calls, but individual roll‑call tallies by name are not reflected in the spoken record.

The board scheduled an optional workshop after the meeting and staff noted they will hold a mid‑month workshop if the board wishes additional review. The manager and finance staff said they would continue to provide clarifications about salary drivers and grant timing to monitor fund‑balance impacts and tax assumptions going into FY2027.