Surf City manager proposes 12¢ property tax hike to close $3.2M budget gap

Town Manager Kyle Brewer proposed a balanced FY2025–26 budget totaling $36,321,831 and recommended a 12¢ increase in the property tax rate to address an estimated $3.2 million shortfall.

Brewer told the council the tax move would generate about $2.5 million in recurring revenue. "On a $500,000 assessed value, that equates to roughly $600 annually," he said. He framed the increase as a targeted, strategic step to preserve service levels while funding infrastructure and workforce priorities.

Why it matters: staff and council cited three core needs driving the recommendation — implementing pay‑study recommendations to retain and recruit staff, restoring and expanding public‑safety staffing, and funding capital projects such as the wastewater expansion and beach nourishment program. Brewer singled out the beach fund transfer and wastewater investments as major line items in the plan.

Key budget elements: the manager highlighted a $4,690,000 transfer to the beach nourishment fund, a $20,000,000 state appropriation for wastewater expansion (with additional engineering costs to be covered), about $250,000 proposed for pedestrian sidewalk connections, and an operational emphasis on competitive pay (a recommended 2.8% cost‑of‑living adjustment and the pay‑study implementation options).

Pay study link: the consultant presented an implementation cost estimate earlier in the meeting; David Hill of the Piedmont Triad Regional Council summarized that a time‑and‑position model would cost about $418,000 in salary adjustments (about $87,000 in payroll‑associated costs) and about $455,000 including a 2.8% COLA. Brewer told the council the pay study and budget align with the town's strategic priorities.

Council response and next steps: council members repeatedly noted the recommendation had been developed over months at retreats and in follow‑up meetings. After questions and discussion, the council gave consensus to move the proposed budget to the June meeting for formal adoption and to dually advertise the required public hearing. Brewer said the proposed budget and supporting documents will be posted online and hard copies made available at town hall for public inspection.

What was not decided: the public hearing and final adoption must still occur; specific line‑by‑line cuts and final tax rate adoption will be voted at a future meeting following required notice and public comment.