NEW HANOVER COUNTY — Budget finalization is looming in New Hanover County, and there is now more clarity on two of the most talked about line items: Port City United and New Hanover County Schools.
READ MORE: ‘Experiment reached the end of its term’: Commissioner wants PCU funds for schools
New Hanover County staff presented a budget overview to commissioners Thursday as the county aims to get a draft budget recommendation before the board next month.
Funding for Port City United’s mediation and outreach wing and its 10 employees have been in question since the division was suspended on March 27; days before, its supervisor, Stephen Barnett, was arrested while on the job, for being an accessory to attempted murder in the Houston Moore housing complex.
PCU started in 2022 in response to the school shooting at New Hanover High School in 2021. Based on the Cure Violence Model, it was considered an “anti-violence department” — often hiring people who are gang-member adjacent, such as Barnett, as violence interrupters — to help reduce crime before it led to gunplay.
County staff are undergoing a policy and procedure review of the mediation and outreach division while it’s suspended. Ongoing funding for it, along with Port City United’s school-based community resource coordinators, was not included in the budget.
Federal aid money props up a lot of PCU but those funds are required to be spent by the end of the year. County staff have identified general fund money to continue administrative salaries ($586,000) and the PCU Connect call center ($1.1 million).
However, commissioners would need to pull funding from another source to cover mediation and outreach ($946,000) and the resource coordinators ($1.3 million) past Dec. 31, 2024.
Three other components of PCU — Legal Aid, technical certifications and the United Way Capacity Building (a center for nonprofits)— would cease to have funding after June 30, per no shift in covering the expenses. They add up to about $1.8 million.
Because the county has allocated much of the general fund — already stretched thin as the county enters its last year before property tax revaluation — commissioners would need to authorize dipping into its revenue stabilization fund, typically reserved for emergencies, to cover additional priorities like PCU without reducing other services.
Commissioners Dane Scalise and LeAnn Pierce were adamant against doing that — and moving money from the revenue stabilization fund would require at least one of them to reach the needed supermajority.
In multiple instances the two Republican members have voiced their displeasure for PCU’s work, saying they were unclear on what its operations look like and don’t think it’s a good return-on-investment, per substantiating it reduces crime.
On Thursday, Scalise and Pierce said they would not vote for the budget unless substantial changes were made to PCU.
“I’m arguing for core services,” Scalise said. “The traditional function of government has been to fund things like schools and law enforcement, and there are plenty of experimental concepts, and I would look to the private sector, to the nonprofit sector to explore that position to explore them.”
Scalise and Pierce have questioned the evidence of success at PCU, which Democratic commissioners Jonathan Barfield and Rob Zapple pushed back against. Barfield noted PCU employees have presented on multiple occasions about their work, while Zapple focused on the fact that PCU was 85% successful in preventing violent acts in 52 high-risk cases over the last eight months.
“Let’s say half of those, 26 of them, were to actually get to that point [of violence] because the outreach and mediation were not there,” Zapple said. “Can you imagine what this town would look like? Twenty-six cases of gun violence that happened — our hair would be on fire.”
Trying to mitigate both sides, county manager Chris Coudriet said law enforcement has been skeptical of PCU, who have told him that community violence reduction is not just attributable to PCU.
Barfield called law enforcement “reactive at its best,” pointing out PCU’s approach is proactive. The commissioner also challenged the recurring statements that law enforcement were not in support of PCU.
“I would like at our next meeting to have our district attorney and our sheriff speak on the record where they stand on this issue,” Barfield said.
The Wilmington Police Department was not included in the request, which Barfield told PCD Friday was on purpose because the WPD does not answer to the county.
The commissioners also went to battle over community support of the resource coordinators who work with at-risk youth to provide them wraparound services and one-on-one support.
Scalise, Pierce and chair Bill Rivenbark said constituents, including employees in the school district, have told them they do not support Port City United. Zapple said he talked with over 100 employees, all of which gave a resounding yes for PCU’s work in the schools.
Coudriet was concerned with the $1.3-million expense when, for the second year in a row he said, New Hanover County Schools senior leadership and board members have indicated reservations about renewing the coordinators’ contract. Per commissioner direction, the county could provide funding for the project, but ultimately the school district is in charge of how to allocate the money.
“You know, for me, this one piece is the genesis of this whole thing,” Barfield said.
The commissioner continued that deserting PCU now would be negating a commitment made to address violence in the community two years ago.
“Stepping back from that to me sends a very different message,” he said.
Barfield suggested Rivenbark, the swing vote on the issue, work with staff on a compromise, so PCU services will be scaled back and funding options explored.
New Hanover County Schools
Prior to the PCU discussion, commissioners were updated on the state of school funding. The county has received a lot of community pressure to increase funding and help offset New Hanover County Schools’ $20 million budget shortfall. NHCS has experienced declining enrollment — over 1,000 students have left the district since 2018 — which triggered reductions in state and federal funding, the former already limited as it is. The projected state allotment is $194.6 million, federal $13.5 million.
The district has spent down its fund balance, covering deficits over the last few years, but half of the shortfall is attributed to the expiration of Covid-10 relief ESSER dollars. The district chose to fund additional support positions —therapists, instructional coaches — with these finite funds; now it has to reckon with its choice.
NHCS has 280 positions it can no longer afford. According to the latest update provided to the county, 170 positions funded with ESSER need to be gone by June 30. Of those, around 90 have already been eliminated due to attrition, a trend the district said it expects to continue.
County staff prepared a proposal that would give the schools an additional $5.5 million to keep 76 of the remaining 110 positions on the chopping block. Including state mandated raises and benefits, this would pay for:
- 15 teachers
- 6 AIG teachers
- 8 enhancement teachers
- 47 TAs
Though the county obtained this position breakdown from talks with NHCS, the school district will be the deciding agent on how exactly the $5.5 million is spent.
Zapple asked if EC positions were in the mix to be cut; Coudriet replied there were not any in the 110 positions shared with him. However, 17 EC positions were marked for the 280-reduction in the school’s latest budget session.
NHCS funding, equaling $101.5 million overall, would increase the county’s per-pupil expenditure from 3,434 to 3,703.
The proposal is $1 million more than the district indicated it would ask for last month, though it comes at a cost — no capital funding this year. NHCS had requested $8.77 million, almost $5 million more than the traditional allocation, to go toward its extensive list of urgent repairs — roofs, intercoms, structural issues and more.
According to county staff, NHCS still has $11 million in capital funding it needs to spend down before more is turned over.
Despite the calls to do more, commissioners have defended their contributions to the school system, most recently in an op-ed posted to its website. Its operating allocation has increased 27% since 2018, — capital, 385%. Coudriet told the board it funds about a third of the NHCS operations, while many other counties’ allocation is closer to a quarter.
“I don’t think that we can help you put enough emphasis on the fact your amount of money is increasing,” Coudriet said. “Student population is decreasing and associated state, federal support is decreasing while your money continues to go up.”
Other notable items
Despite having to tighten its belt a little this budget cycle, the county is not exploring a tax rate increase at this time; Thursday’s presentation was based on current revenue.
The budget is projected to increase by $10.8 million over last year’s $441.5 million. With inflation up 16.5%, sales tax revenue expected to come in at the same amount, and debt service going up due to Project Grace, Credle said the county may need to dip into its fund balance — but it would remain well above the Local Government Commission’s recommended 8% fund balance.
The main contributor to the increase is public safety, with an $18.4 million increase. Credle explained staff under-budgeted overtime pay last year. As well, two new policies are aimed at cutting down the New Hanover County Sheriff’s Office vacancies. One is an increase from 1.5-times to 2.5-times overtime pay for detention center deputies; also, the overtime period has been shortened to a week. This means instead of looking at hours over a monthly period and paying overtime based on that, deputies get overtime pay every week.
Coudriet noted the office still struggles with understaffing.
“Public safety in general is having a difficult time, not just retaining but attracting new people into the profession as they retire out,” Coudriet said.
The commissioners plan to hold one more budget session before a draft budget is presented to them mid-May.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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