NEW HANOVER COUNTY — All eyes have been on New Hanover County as it considers a new tax rate in light of its 67% increase in property values. Last Friday, staff presented their preliminary budget recommendation cutting 10 cents from the rate, though this plan relies on assistance from other funds not buoyed by property taxes.
READ MORE: New Hanover County property values increase 67% on average in last four years
The recommended rate — which could still change based on pending items and commissioners’ feedback — is not revenue neutral, meaning a rate that brings in the same amount of money as the year before. The county has calculated increased funding needs of $43.9 million. The public also should not expect a lower tax bill.
“The majority of people will pay incrementally some amount more,” County Manager Chris Coudriet said. “Below the revenue neutral rate would be the only way that individuals would pay less with the same amount on their property tax.”
Based on the 35.5-cent rate, a $347,000 home (the mean value of homes last year) would now be valued at $581,187 and would pay $2,063 this year, compared to $1,562 last year with a 45-cent rate.
The median value of homes, or the amount where half of NHC homes cost more and half are less, was $258,200 last year. This year it is $411,000, resulting in a tax bill of $1,459 compared to $1,162 in 2024.
As Commissioner Dane Scalise calculated in the meeting, this checks out to an extra $42 or $25 per month based on those values.
“I know people are going to get upset about their taxes going up, but we’re just one big county and we’re trying to make sure the whole county is treated the same way,” Chair Bill Rivenbark said.
Moving money around
Though the preliminary recommendation is balanced at 35 cents, the county is pulling from different funds to do so, even though staff had originally pitched to move recurring expenses to the general fund.
The county is using interest $6.6 million accrued from its Revenue Stabilization Fund — started from the sale of New Hanover Regional Medical Center to Novant — to balance the general fund, though the principle amount in that fund remains untouched.
Pulling from the $300 million Revenue Stabilization Fund was a sticking point for the commissioners’ Republican majority last budget cycle; commissioners LeAnn Pierce and Scalise advocated for cutting expenses instead. Among the slashes were the anti-violence experiment Port City United’s and capital funding for schools, leading former commissioner Jonathan Barfield to say the budget was the “most irresponsible” he’s seen presented.
Despite the property valuation loosening the need for budget cuts this year, the county is still planning to use $5.6 million from the $50-million Mental Health and Substance Use Fund to cover strategy programs and mental health therapists. The fund, also founded from Novant’s purchase of the hospital, was used this fiscal year to cover 47 therapists and 35 nurses in New Hanover County Schools. The nurses’ salaries have been moved to the general fund in the budget recommendation.
Even using accrued interest, the positions deducted $8 million from the fund’s original $50 million in this year’s budget.
At a January budget session, Coudriet warned commissioners it would deplete in five to six years by continuing to fund the therapists and nurses from it. Though the commissioners never intended the fund to increase exponentially in interest, bankrolling recurring expenses will limit the ability to provide money for larger one-time projects.
The county is also pulling $2.4 million from the fund balance of its $6-million debt service fund. Coudriet explained this extra money is essentially overflow from property or sales tax collection being higher than anticipated.
There is no new debt issuance for next fiscal year at this time, as compared to $8.8 million in the current budget. Keeping with that plan, the county is looking to cash-fund its capital outlay expenditures.
“Just to make sure we maximize our debt capacity and our borrowing potential for future years and future needs as they arise,” budget officer Amanda Kostusiak said at Friday’s meeting.
Chief Financial Officer Eric Credle explained the $8.8 million in the current budget is made up of small, short-term assets, such as vehicles, that he would like to see funded by cash-on-hand now that the budget is less tight. He said it would save the county $800,000 by not financing it in the upcoming budget.
Increasing expenses
Staff broke down the $43.9 million for commissioners on Friday, which is as follows:
- $2.28 million for “committed continuation,” or projects the county has obligated funding to, such as Project Grace and the Northchase Library
- $5.4 million for enhancements
- $3.95 million of transfers back to the general fund for pre-K and workforce housing dollars that were covered by the now-expired Covid-19-relief allocations (ARPA)
- $12.1 million for people investments, or market and merit increases for staff
- $8.04 million for education, including New Hanover County Schools and Cape Fear Community College
- $12.2 million of other expenses
The biggest variables remaining are New Hanover County Schools, and employee compensation. The recommended budget includes a 4% market/merit increase for all county employees, but a 5.3% market adjustment for public safety. Coudriet said he is still working out how these increases will be implemented.
New Hanover County Schools has promised to submit its budget request to NHC by April 15, one month ahead of deadline. The district is coming out of an arduous budget cycle last year where it had to eliminate $20 million from its rolls. This included 279 positions, 170 of which were intended to expire with Covid-19 relief funding; the final cut ended up being lower due to attrition and the county’s increased funding. The commissioners, already funding a third of the NHCS budget, ultimately provided $15 million more, but no capital outlay allocation aside from $9.3 million in emergency repairs and facility needs study at New Hanover High School.
Friday’s recommended budget includes an operating increase of $4 million — $3 million to address inflation changes and $1 million for school safety measures. The latter includes four safety officers, metal detectors and classroom behavioral training.
The county manager also said NHCS is expected to ask for an additional $4 million for a two-year pilot that would put on additional specialized employees in each school. In conversation with district leaders, Coudriet said the program was pitched as a “proof of concept” with the goal of obtaining outside funding, potentially from the New Hanover Community Endowment. From there, he said the intention was for the state to pick up funding.
The county has also issued a $2.5-million placeholder for additional increases stemming from NHCS and CFCC, which could cover the school district’s capital request.
“At the end of the day, we don’t know what the school system is going to ask for and we’re just now starting to get communication on the capital side,” Coudriet said.
The New Hanover County Board of Education discussed its budget on Tuesday. It includes an $8 million operating request, in line with the county’s expectations. However, its capital request is totaled at $19.43 million.
Chair Rivenbark asked what the per-student funding amount would be considering the current request; it would be $3,800, $1,000 more than FY2019 school year.
“We can’t do this every year; they’ve got to get a hold of that,” Rivenbark said.
The county manager added the per-student allotment is not indicative of indirect support of the schools outside of direct funding, such as school nurses and therapists and capital funding.
The biggest line items in the other expenses category include $2.3 million in increased insurance costs, $1.7 million for Scotts Hill water lines, and $1.9 million in additional debt service.
After the full vetting process of $22 million in enhancement requests, the county decided to recommend $7.7 million, of which $2.3 will go toward Project Grace and the Northchase Library. The additional revenue for other enhancements include:
- $2.28 million for a public safety software replacement
- $1.11 million for technology upgrades and one additional position at the sheriff’s office
- $462,282 (net cost) for a Family Support Services pilot program with NHCS
- $327,727 to Parks and Gardens for repairs and one additional position
- $169,844 for the Board of Elections
- $110,000 for an IT security engineer
- $54,650 for a veterans service outreach position
- $40,500 for a floodplain management program software
- $35,099 (net cost) for a dedicated passport agent
- $32,403 for a part-time Soil and Water admin coordinator
- $20,000 for a new point of sale system for the museum
- $17,759 (net cost) to convert a part-time health and human services position to benefits eligible
- $0 (net cost) for a code compliance Older Building Inspection Program
There was a small discussion on the public safety software replacement, Coudriet explaining the CAD system used by the sheriff’s department has not been updated since the late ‘90s. Commissioner Scalise questioned if the rollout of the new system would be disruptive; Coudriet responded the county is using the same company to minimize it.
Commissioner Pierce questioned the need for a position in the passport office, to which Coudriet explained locations processing passports was dwindling with the closure of UNCW’s office and the downtown post office requiring appointments well in advance.
The meeting also included longer discussions on the NHCS pilot program, code enforcement’s building inspection proposal and the board of elections funding.
Board of elections
In the enhanced funding pool comes increased board of elections funding, though not exactly matching the BOE’s request.
Earlier this month, BOE Chair Derrick Miller sent a wishlist to the county maanger; the BOE asked for:
- $20,000 for a new software system
- $83,870 for a voting services manager position
- $62,585 for an elections registration coordinator
- Elections education and communications coordinator (submitted without an estimate)
- $53,352 for three part-time administrative assistants
The county is planning to provide the money for the software system and $150,000 to be used for staffing as the BOE sees fit. A vacant position at the county will be transformed into the BOE education and communications coordinator with $96,103 already attached to it.
The commissioners brought up the recent county-sanctioned investigation of the BOE over its failure to follow absentee counting deadlines in last year’s election. The audit resulted in recommendations to increase communication between the two entities, enhance legal and administrative support and review and fund resource requests.
Coudriet said he thought a communication position was a good idea.
“They certainly didn’t communicate with us in the last election,” Rivenbark said. “That’s their fault. It’s not ours.”
Rivenbark questioned if the BOE needed an increase in funding considering this year’s municipal election is not expected to generate as much turnout as the past presidential election.
Commissioners Rob Zapple and Stephanie Walker said they viewed the BOE’s request as addressing the increased demands on the BOE. This includes law changes that unexpectedly occurred and challenged BOE staff last year in the lead up to the election.
Though the BOE has not directly attributed its absentee ballot issue to understaffing, instead blaming a miscommunication with the State Board of Elections, their response to the audit is their budget requests.
“The only way to, in their opinion, to deal with the deficiencies is to apply more people,” Coudriet said. “The only way they can apply more people is for us to recommend to you to apply more money to them.”
NHCS truancy pilot
Within the county’s social services budget is a three-year pilot program to address absenteeism in New Hanover County Schools.
“I was just made aware that we have a 25% truancy rate in our public schools — that is out of control,” Commissioner Zapple said.
School districts across the nation have been experiencing higher rates of chronic absenteeism, meaning students missed at least 10%, or 18 days, of the school year, after the Covid-19 pandemic. North Carolina’s average truancy rate has been coming down since then after peaking during the 2021-2022 school year at 31.18% — a 96% increase from 15.88% in the 2019-2019 school year. The most recent data, from the 2023-2024 school year, shows the rate decreased to 27% statewide. Research shows a higher number of absences is associated with poorer academic performance, reading below grade level, and increased chances of dropping out in high school.
Coudriet said county and NHCS staff came up with the pilot after a data analysis showing truancy was most associated with lower academic performance.
“It wasn’t income, it wasn’t school assignment, it was truancy, or not being in school, that was the primary dictator,” Coudriet said.
Income and truancy can be linked together, according to research showing children of lower income families are more likely to be absent.
Commissioner Stephanie Walker, a former school board member, said absenteeism was a huge issue and one really without consequence.
“The consequences come later when we’re judging our schools on how they’re doing,” she said.
The pilot will deploy social services employees to work with school social workers to compel student attendance, which could include knocking on parents doors to do so.
“It’s about having the ability of having someone in the school system, who is not actually a social worker, but they can work hand-in-hand with the school social workers to try to make sure we can eliminate any barriers to these families being able to have their children in school,” Social Services Director Tonya Jackson said.
The full cost of the program is budgeted for $629,006, covering six full-time positions, but the net cost is $462,282 after state grant reimbursement.
Pierce expressed concern about the county having to pick up the cost of the program after the three-year period. If it didn’t, it would have to let go of the employees, which Coudriet confirmed would be a situation commissioners would face.
Scalise said he supported the proposition but wanted to make sure staff were tracking its success.
“It’s a pilot program, and if this pilot program does not move the needle then we ought not to fund it in the future,” he said.
Though they haven’t yet nailed down which schools would participate in the pilot, Jackson assured her team would be tracking its success.
Building inspections
The county has been putting together a program to address potential code compliance issues in older buildings, specifically commercial properties over 100 years old. The program was suggested following several buildings in downtown Wilmington that endured partial collapses last year.
The commissioners discussed the outlines of a program in October 2024. Staff reported around 400 buildings would fall into the 100-year category and proposed a plan to inspect the commercial properties in the first two years of the program and then update them every five years. Any buildings younger than 100 could also be part of the program but perhaps on a complaint basis. The county only institutes inspections now on new construction and renovations, or if there is a complaint.
On Friday, Coudriet said the updated number of buildings affected is 361, most of them located in downtown Wilmington. Each municipality within New Hanover County would have to pass an ordinance allowing the program to take place.
Coudriet explained at Friday’s budget meeting the ultimate goal is for the program to be cost-neutral, funded through inspection department fees. The county estimated a cost of $321,204 to run the program, to include three full-time positions; Coudriet also noted these could be contracted out.
Despite its inclusion in recommended enhancements, commissioners have not made a decision on the program yet and Coudriet stated there are still details to iron out. Commissioner Scalise had some reservations Friday.
“I am not a for-sure vote on that,” he said, noting he’s heard from constituents with concerns but was reserving his opinion until a full presentation was given by county staff.
Commissioner Zapple said he thought the county needs to be proactive with some sort of program to address potential problems.
“We have literally dodged not a bullet but a brick,” Zapple said. “It would only take just one serious accident and it would really change the nature of downtown.”
Scalise said he understood but was concerned about the impact on business owners.
“There are some concerns from any number of owners of older buildings in downtown that this could, if not operated properly, create an overly onerous obligation that, while maybe well-intentioned, could but people out of business and remove jobs in our community … safety is a concern, true, but we also can’t be shutting down businesses Rob,” Scalise said.
Coudriet said an update on the program was two agenda review meetings away.
[Editor’s Note: A previous version of this article stated the education and communications director position at the BOE would be created with a vacant position within the BOE. The vacant position is currently part of county staff, not the BOE.]
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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