CAROLINA BEACH — Amidst a significant property value revaluation, the Carolina Beach Town Council unanimously approved its fiscal year 2025-2026 budget this week with a revenue-neutral rate and an increase in utility fees.
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Council voted June 10 to set the tax rate at 14 cents per $100 — a notable decrease from the current 23 cents. Council chose a revenue-neutral rate due to this year’s property revaluation raising property values, allowing the town to collect sufficient tax revenue with a lower rate due to its expanded tax base. The average value for a property rose by about 74%, meaning resident’s property taxes are still likely to increase despite the decreased tax rate.
“This year, the rebound was so extreme, and they just put a lot of fear and a lot of concern in the residents as to how this is going to work out,” Carolina Beach Mayor Lynn Barbee told Port City Daily. “I mean, we have residents whose home values are double what they were. We just felt like that was the right thing for the community this year and the manager was able to do it.”
In addition to the property tax adjustment, the new budget also includes a 5% increase in utility rates, consistent with the town’s long-term infrastructure plan passed in 2023. The increase will help fund projects including engineering and design for a new stormwater force main from Carolina Beach Lake to Henniker’s ditch, slated for the upcoming fiscal year. In accordance with the infrastructure plan, residents can expect another 5% increase in FY 2026-27, as well.
During budget discussion, Town Manager Bruce Oakley emphasized the expansion of Carolina Beach’s tax base following this year’s revaluation, driven by continued growth, allowed for the lower tax rate. Each penny of the proposed tax rate is projected to generate approximately $548,213 in revenue.
The budget also had to account for a projected decrease in sales tax revenue. Due to New Hanover County’s use of the ad valorem method for sales tax distribution, if the county adopts a tax rate above revenue-neutral, Carolina Beach’s share of the county’s sales tax distribution will decrease. Based on a projected loss of about $471,210, sales tax revenue for next fiscal year is estimated at about $3.4 million.
New Hanover County Commissioners are still deliberating their tax rate. While the revenue-neutral rate is set at 29.2 cents, the most recent budget draft is built on a rate of 33.9 cents. Commissioners are scheduled to discuss the county budget and tax rate further at their June 12 meeting.
Barbee said town staff referenced the county’s higher proposed tax rate when creating the budget, not the revenue-neutral rate.
“We took that as the worst-case scenario and then factored that in,” Barbee told Port City Daily. “So if the county does come back to revenue neutral or something less, it’ll just be to our advantage.”
The FY25-26 general fund budget is set at $23.4 million, a $1 million increase from the $22.4 million in the current fiscal year. This growth is primarily driven by:
- A $644,868 increase in wages and benefits
- A $736,472 increase in maintenance and operations
- A $367,000 decrease in capital project expenditures.
According to Barbee, Carolina Beach is starting the new fiscal year in a strong financial position, with its fund balance at $13.8 million. About 45% of this is unassigned, meaning it’s flexible for unexpected needs, which is near where the town council wants it — close to their 50% unassigned target for a healthy financial cushion.
“I think this budget just keeps us financially sound,” Barbee said. “I think it keeps us in a position to continue to be opportunistic, to build, to be able to acquire or or create amenities that the public wants.”
Barbee highlighted an allocation of about $8,000 dedicated to assisting in the construction of the Carolina Beach Rainbow Bridge at Lake Park, a project inspired by the similar memorial found at Lake Lure. Like the one constructed at Greenfield Lake last month, it will welcome pet owners who want to memorialize their animals that have passed on.
“That wasn’t in our budget, but it’s something the public wanted and it makes us unique, and it displays our culture and our values,” Barbee said. “So council funded it. You can only do that when you’re financially healthy.”
The budget emphasizes managing growth, particularly by addressing the strain on emergency services. From 2010 to 2020, Carolina Beach experienced a 15% growth in population, from 5,706 residents to just under 7,000 today. Carolina Beach Fire Chief Alan Griffin reported a 25% jump in emergency calls, from 986 total calls in 2023 to 1,238 in 2024.
In response, the budget allocates funding for six new roles within the general fund’s 103-person workforce. These include a non-sworn investigative analyst, a detective, and a patrol officer for the Police Department, alongside three new shift personnel for the Fire Department.
Additionally, a vacant building inspector position has been reclassified to create a new fire inspector position, for which the town plans to begin advertising and hiring in the upcoming fiscal year.
Councilman Mike Hoffer expressed initial apprehension about adding more staff but ultimately supported the move.
“After a conversation with our illustrious fire chief over there, I get it,” Hoffer said at the meeting. “Regarding the police, look, we ask them to do a lot … I don’t know how, from town council, I can constantly expect more but never give them more resources to accomplish it, so I’m not going to get in the way of this.”
In addition to new public safety positions, the town approved a 3% cost-of-living adjustment and a potential 2% merit increase for all employees to aid in recruitment and retention.
With a reduction in general fund capital expenses, the town is prioritizing the completion of existing projects, such as the boardwalk bathroom. Construction on the bathroom has been paused until after Labor Day due to public safety concerns during the busy summer season.
The utility fund budget for FY 25/26 sees an increase of $1.9 million, reaching $12.4 million compared to $10.5 million last year. This increase is driven by:
- $140,000 in wages and benefits
- $1.4 million in maintenance and operations
- $328,000 in capital outlay for utility improvements
Utility capital projects slated for FY25-26 include the engineering and permitting of a new well, piping, and filtration for a bond issuance this winter, as well as engineering and design for a new stormwater force main from the Carolina Beach Lake to Henniker’s ditch. The town has also initiated early planning for a bond issuance to fund a comprehensive water system upgrade, scheduled for FY28-29.
In September 2024, Potential Tropical Cyclone #8 dumped over 18 inches of rain on Carolina Beach within 12 hours, which Barbee said overwhelmed the town’s drainage infrastructure and caused significant flooding.
“With PTC 8, we were stretched well beyond our capacity,” Barbee said. “We’re probably not going to ever have the capacity to handle a PTC 8, but we certainly want to be able to handle as much rainfall and keep it out of people’s homes as we can.”
Notably, no members of the public offered comments during the budget discussion, which Barbee called reassuring.
“I think when you say you’re shooting for revenue-neutral, I don’t think we get as much participation like in the public hearing last night,” Barbee said. “You just can’t get enough public input into your budgeting process and I think making ourselves available and holding those open houses, while it’s a challenge, I think it’s the right thing to do.”
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