NEW HANOVER COUNTY — An underground storage tank and lift station will move to the top of the New Hanover County Board of Education’s capital requests for the next fiscal year after the county refused to allow the district to use leftover funds to cover the project.
The current tank and lift station at Winter Park have reached the end of their lifespan with replacement estimated at $1.3 million.
District officials proposed pulling the $1.3 million from savings that emerged from the recently completed New Hanover County High School repairs. These repairs were covered by the county and thus, any savings would go back to the county, but NHCS asked the county if they could use the savings for the tank replacement. NHCS Chief Financial Officer Ashley Sutton notified the board Tuesday that request has since been denied.
“My understanding is the county manager did not recommend approving that budget transfer because they had funded that project with their fund balance, and so they wanted to put that money back into their fund balances,” Sutton said. “This was no longer an emergency situation.”
Board member Josie Barnhart wanted to ensure the public knew the rejection wasn’t a result of incompetence or wrongdoing.
“We were able to save $1.3 million,” she said. “We did our job very well, and so by law, we have to go back to the county. So this [tank replacement] is not something that just didn’t get done, it was something we were hoping to do in addition to all the rest of the things.”
The New Hanover County commissioners approved nearly $10 million in the last few years, including appropriations outside the district’s capital allotment in each year’s budget, to fix emergent repairs to the 104-year-old New Hanover High School’s foundation. The county also paid $300,000 for a feasibility study of the school, which has long-standing repair and modernization needs, resulting in $230 million in recommendations adopted by the board.
The $60-million first phase of the study’s recommendations — including securing the perimeter of the school and bridge, along with a new auto shop, dining hall, band and orchestra room, student union and culinary arts area — is part of the district’s 2026 $320 million bond package, to be voted on this November. Limits to the county’s debt capacity prevented the board from including all four phases in the bond.
NHCS board member Tim Merrick said he thought the school district should be rewarded with the money for coming in under budget on NHHS emergency repairs. Plus, he explained, the district’s bond ask — which affects the county’s debt service — doesn’t even include the full amount needed to complete NHHS’ master plan.
“We should get something back rather than, ‘Oh, we’ll just then ask for it [in this year’s capital request],” Merrick said. “Because when we had $630 million that we wanted to ask for, in terms of what we need, we settled for $300 [million] — we’re always going to get less than what we need.”
Board member — and county commissioner candidate — Judy Justice said she felt like the district was being punished for doing a good job, reminding the board that the county forced it to spend down its fund balance it had accumulated. This was done in 2022, when the county was strapped with paying for state-mandated salary increases.
For several years after, the district was pulling money from savings to pad budget gaps in years prior. As a result, NHCS can’t pull the needed $1.3 million from fund balance for the tank replacement.
Pat Bradford pointed out the county commissioners agreed to come to NHCS’ aid in emergency situations, such as repairs needed after a hurricane. She questioned if the tank replacement constituted a large enough emergency. If the tank were to start leaking, it could be hundreds of thousands — if not millions — of dollars to cleanup the spill depending on the contamination level.
“I don’t think I can say with certainty that we’re close to that,” Assistant Superintendent of Operations Rob Morgan said, noting the tank is inspected annually. “I think the concern is that, given the life expectancy of those tanks, we’re beyond that. I think three years ago, when it was first broached, we were approaching that [end of life] then.”
Even if the NHC school board were to go back to county commissioners and ask for the money — as suggested by several board members — Superintendent Chris Barnes said it might reduce its capital allotment in next fiscal year’s budget. Merrick surmised the commissioners would not change their planned capital funding (thus not counting the $1.3 million for the tank), even if they included it in the capital request, but at least asking before budget approval would allow the district to get started on repairs.
“They didn’t necessarily say we won’t give it to you, but they said we can’t do it this way — we can’t take it out of the general fund, this is not an emergency,” Merrick said. “But I do believe that we could turn around and say, ‘We need this. We don’t want it to breach. This is in our best interest. We’ve saved this money. Which fund would you like to give it to us from?’”
He motioned for the board to send its $1.3-million request to county commissioners ahead of its overall budget including capital needs. The budget will likely reach the county in May and has to be passed by July 1.
However, Barnes suggested he talk to the county manager first before the board took an official vote. The board agreed and Merrick withdrew his motion.
Reach journalist Brenna Flanagan at brenna@localdailymedia.com.
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