KURE BEACH — A local municipality known for its oceanfront views and small town vibes is preparing to balance its $1.7-million deficit for the upcoming budget year by asking residents to pay more.
Kure Beach staff are proposing a 2.3-cent tax rate increase next fiscal year, on top of its current 17.2 cents per $100 value. The tax bump is needed due to the increased expenses for the general and the water and sewer funds and flatlined revenue.
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The town’s total expenses cost $14.3 million, while staff estimated bringing in about $12.7 million in revenue. With the balanced budget, both revenue and expenses equal $13.8 million.
Though commissioners didn’t vote on the proposal April 20, staff noted it will be officially presented to the board in May before a public hearing is held and a vote will be taken in June to be statutory regulation. Commissioners expressed unanimous approval for staff’s work and proposal.
“We need to make sure that people understand,” Mayor Allen Oliver said of the tax and fee increases. “We’re not adding employees. This is just to keep our level of service that everybody is expecting.”
Kure Beach previously lowered its tax rate for the 2025-2026 fiscal year from 29 cents per $100 value to 17.2 cents as a result of property revaluations; in Kure Beach, values increased by 70 percent. By proxy, the Kure Beach Town Council set the rate at revenue neutral, or the rate needed to bring in the same amount of money as the prior year. However, this year’s increased costs mean more revenue is needed.
Mayor Pro Tem David Heglar noted at the meeting inflation only added to the town’s financial burden, as healthcare costs increase — directly impacting the budget — and cost-of-living adjustments are needed to address rising needs.
As council and staff both noted in budget sessions, the cost of maintenance and equipment is increasing, too, despite the services remaining relatively the same.
Balancing the general fund at its current level requires a 13.4% property tax increase and 35.3% garbage collection fee increase. Prior to adjusting rates and fees, the general fund was at a $953,000 loss.
The Kure Beach Police Department is the second largest contributor to the increase in general fund expenses, at a $158,000 differential over the current fiscal year. The department requested $2.6 million for their budget, which included an additional $15,000 for police grade vehicles.
The vehicles will replace two outdated ones, as well as more uniforms, Kevlar vests, and K-9 unit equipment.
“Truthfully, the $15,000 additional will, in the long run, save the town money because of all the maintenance expenses we incur,” Chief Brandon Bailey said.
The town is currently operating with less-expensive civilian-grade vehicles than the one requested by the chief which need routine maintenance to upkeep, such as tire changes. The town spends about $11,000 a year on maintenance.
The police department also requested additional funds for updates to the computer software and for an increase in full-time personnel compensation.
Streets and sanitation came out on top as the most significant increase in budget requests, with a roughly $487,000 difference between the upcoming budget and current fiscal year. Staff requested replacement maintenance vehicles and equipment, plus further capital improvement expenditures totaling roughly $100,000. Capital expenditures — for the vehicles, street maintenance, and beach access replacements — for this department experienced a 177% increase from 2025-2026.
Beach access and boardwalk repairs have significantly increased by $275,000, as town staff informed commissioners repairs must be made in the coming year. There are dilapidated boards on the century-old boardwalk and overgrowth at beach access points, which some residents have spoken to town staff and officials about not being able to use.
In order to balance the general fund budget to accommodate increased expenses, the most significant change — aside from the new tax levy — will be in garbage collection fees. It costs about $446,400 to provide but yields less revenue at $330,000. The fee bump would bring the rate from $8.75 a cart to $11.84.
“We should at least break even on our trash collection,” Commissioner Connie Mearkle said at the March 26 budget workshop, when the fee bump was first discussed.
The town will move $148,000 surplus funds from past years into the general fund to help balance the budget. The funds are savings from previous budget year general fund balances, wherein the town did not spend as much as it projected to, leaving some to set aside.
The general fund wasn’t the only one in need of balancing, though.
To square the water and sewer fund, at a deficit of $859,866, residents may need to contend with a 10% increase to water and sewer minimum charges and a 20% increase to water and sewer usage-based rate tiers. Minimum charges are fixed monthly fees up until 2,000 gallons of usage; the tier rates kick in after that. That makes up about $348,000 to cover the deficit.
Another $500,000, give or take, were cuts made by staff to administration and operating costs.
Kure Beach’s sewer system is in need of maintenance due to age. Heglar mentioned they were installed 60 years ago or so and made of clay, which aren’t sustainable. They will need to be replaced with sustainable material, like PVC or steel.
He said the clay pipes have “reached its end of life.”
More capital improvements, including equipment replacements and purchases, are needed for the sewer system, accounting for a $265,000 increase in capital outlay costs, which also includes acquiring the proper equipment.
While the general and water and sewer funds have significant deficits, Kure Beach was able to increase stormwater funds next fiscal year.
The stormwater fund’s revenue was expected to be more next year at $611,150 than its expenses at $451,605. The town was able to balance the budget by accounting for further stormwater outfall and drainage improvements, and small sums for worker compensation and retirement.
In 2025, the town began a $1.05-million project to replace nine stormwater outfalls around the town. The town operates 13 in total, and nine were in a state of disrepair due to age. So next fiscal year they plan to begin working on the remaining four.
The next town council meeting for the official presentation of the budget will take place on May 18 and the public hearing will be set for June 8.
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