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HomeMy WebLinkAbout2026-04-01 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 807 ASSEMBLY The New Hanover County Board of Commissioners met on April 1, 2026, at 12:23 p.m. for a Budget Work Session in Conference Rooms 137-139 at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present: Chair LeAnn Pierce; Vice Chair Dane Scalise; Commissioner Bill Rivenbark; Commissioner Stephanie A.C. Walker; and Commissioner Rob Zapple. Staff present: County Manager Chris Coudriet; Clerk to the Board Kymberleigh G. Crowell; and County Attorney K. Jordan Smith. Chair Pierce called the meeting to order, stating that the purpose of the meeting is for the Board to discuss budget priorities for the 2026-2027 fiscal year. FISCAL YEAR (FY) 2026-2027 BUDGET WORK SESSION PRIORITIES DISCUSSION Chief Financial Officer Eric Credle and Budget Officer Amanda Kostusiak presented the following information about the FY 2026-2027 budget:  FY 2026-2027 Budget Work Session 3: Revenues, Expenditures, Enhancements, Capital, and Balancing:  Overview:  Revenues:  Ad valorem and sales tax assumed at 2.0% growth  Capital project savings interest earnings utilized  Debt issuance for $11.3 million capital outlay  No use of one-time General Fund Balance  Use of Revenue Stabilization Fund (RSF) principle, approximately $4 to $6 million, as a substitute for General Fund Balance  $1.4 million net decrease in state social services reimbursements  Expenses:  $2.3 million increase in operating funding for K-12 Schools  $1.3 million in General Fund enhancements recommended  Increased Capital Outlay for replacement and maintenance of county assets  Decreased Debt Service costs  Personnel adjustments related to compensation, medical, and retirement In response to questions, County Manager Coudriet stated that use of the RSF would require Board approval. He explained that staff balanced the preliminary budget with one-time revenue and recommended using the RSF rather than General Fund Balance because rating agencies do not view the RSF as unassigned available fund balance. In his opinion, using General Fund Balance again in FY 2027 would violate policy and could affect the County’s credit rating. He further stated that, if the County intended to maintain the recommended level of services and not increase the property tax rate, the budget could not be balanced without using the RSF. He added that the current year’s budget used about $8 million in one-time money, while the current proposal would use approximately $4 million to $6 million. Discussion followed regarding the use of one-time funding for recurring expenses. Some Commissioners expressed concern that relying on the RSF could create a larger issue next year and acknowledged that the County would need to raise additional revenue, use another funding source, or reduce spending on non-mandated items. County Manager Coudriet noted that the County already uses one-time money for recurring expenses in the current fiscal year and stated that he was not proposing a new approach. In response to questions, Mr. Credle stated that the latest sales tax report was unfavorable and came in below budget for the second month in a row. He stated that refund activity often affects those variances and would require further review. For the County, the distribution totaled about $5.7 million compared with a budget expectation of roughly $7.5 million. Discussion continued regarding the use of one-time money for recurring expenses and whether that approach is sustainable. Some Commissioners noted that prior budget proposals had also contemplated using fund balance and that the RSF provides an opportunity to bridge the gap without increasing the tax rate while residents face affordability challenges. Other Commissioners expressed concern that recurring expenses continue to outpace recurring revenues and that the County must raise additional revenue, use another funding source, or reduce spending. Chair Pierce noted that the County is in a unique year because it may seek voter approval of a school bond and must maintain strong General Fund numbers to preserve borrowing capacity. County Manager Coudriet added that staff was not comfortable assuming additional growth in sales tax or ad valorem revenue and believed the 2% growth estimate better reflected current conditions. In response to questions, County Manager Coudriet stated that the County was effectively at the floor of its fund balance policy, which is 16.67%. Mr. Credle stated that the County finished the prior year at 17.8% and that each 1% represents approximately $4 million, leaving about an $8 million cushion above policy. County Manager NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 808 Coudriet added that the current year budget appropriates about $8 million in fund balance and that staff expects to use most or all of it. In response to questions, Ms. Kostusiak stated that most one-time items in the preliminary budget are in capital outlay and would be handled through debt issuance, including vehicle and asset replacement. County Manager Coudriet added that other Board priorities raised previously are not included in the balanced budget and would require another revenue source, likely the RSF, if added. Regarding the $2.3 million in operating funding for the school system, County Manager Coudriet clarified that the increase represents about a 2.23% increase in local school funding, but stated that staff expects the school system’s request to be closer to 3%. In response to questions, he stated that the superintendent had not yet made a formal request, but had indicated that a balanced budget meeting school priorities would require about 3% in new County funding. He added that a later slide would show the difference between the current recommendation and a full 3% increase.  Revenues – FY 2026-2027 Preliminary Budget:  Property Taxes – Tax base growth rate in non-revaluation years:  Average all years = 2.28%  Average last 5 years = 2.78%  FY 2026-2027 assumed: 2.00% = $5.0 million increase  Sales tax:  FY 2026-2027 assumed: 2.00% = $2.2 million increase  Expenditures:  Increases:  Healthcare: Budgeting an additional $3.6 million over the current year and reassessing certain aspects of the current healthcare plan:  Direct pharmacy benefit for GLP  Pharmacy benefit manager  Retirement: General employee retirement contribution increased from 14.36% to 15.1%, and Law Enforcement employees increased from 16.1% to 17.1% contribution  Approximately a $1.2 million increase for the County  Retirement rates are expected to increase annually for the next three years, per the state estimates In response to questions about healthcare costs, County Manager Coudriet and Ms. Kostusiak confirmed that unexpected increases in the current year were driven in part by prescription drug costs. Staff is working to NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 809 identify the funding needed to keep medications such as GLP-1s available to employees while changing how those prescriptions are paid for and delivered. In response to questions, County Manager Coudriet stated that pharmacy benefit manager services would not require a new full-time position. Chief Human Resources Officer Mark Francolini explained that the pharmacy benefit manager is a consultant who manages pharmacy benefits, works with manufacturers, and helps secure the best available pricing through rebates, prescription pricing, and formulary design. County Manager Coudriet added that the County already has a pharmacy benefit manager and that service is being rebid in hopes of reducing overall pharmacy spending. Mr. Credle added that staff have provided claims data to several firms and expects competitive savings through that process. In response to further questions, County Manager Coudriet and Mr. Francolini stated that employees participating in the health plan currently pay about 10% for employee-only coverage, 15% for employee-plus-child coverage, and 20% for spouse or family coverage. Discussion followed regarding whether increasing employee contributions could reduce County costs, and it was noted that higher contributions could reduce the net benefit of any potential merit or cost-of-living increase for employees.  Employee compensation:  3%-4% total for Market/Merit adjustment  Recruitment and retention initiative for Fire Service employees – Early Retirement Allowance to mirror the current Law Enforcement Officer Program:  Minimal cost in the first few years can be absorbed within the current rate In response to questions, County Manager Coudriet confirmed the proposal would be viewed favorably by the fire service and was intended as a benefit.  Expenditures – Capital Outlay:  Buildings:  Detention Center slab repair, Historic Courthouse Ceiling replacement, parking lots resurfacing and restriping, and flooring replacements  Equipment:  IT hardware replacements, HVAC Replacements, a generator for HHS, Fire Station, mowers, and tractors for athletic fields  Sheriff equipment and vehicles:  Road ready for Sheriff Vehicle replacements, replacement for 50 vehicles, fitness equipment, Detention Center equipment and maintenance, radio replacement  Motor vehicles:  Emergency Management vehicles, HHS vehicle replacements, and general fleet replacements of 25 vehicles  NHCS Capital - $2.8 million total budget as requested by NHCS - $236,000 increase  CFCC Capital - $2.6 million total budget as requested by CFCC - $524,000 increase In response to questions, Ms. Kostusiak stated that total capital outlay, including school and community college capital, was approximately $14 million. County Manager Coudriet stated that staff could prepare a more detailed breakdown of the larger capital categories and noted that roughly $10 million represented County capital funded through borrowed money. He explained that removing those items would not reduce the operating gap because they are debt-financed rather than supported with recurring operating revenue. I n response to questions about detention center slab repairs, Chief Facilities Officer Sara Warmuth stated that some small areas in a long hallway had settled and that, while the issue did not appear to be worsening, it was beginning to affect some sliding doors. She noted that the facility has long been known to have poor soil conditions and stated that the repair cost is expected to be in the range of a few hundred thousand dollars.  Expenditures – FY 2026-2027 preliminary:  Preliminary Budget inclusions: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 810  FY 2026-2027 Preliminary Budget highlights: In response to questions, County Manager Coudriet explained that the Community Justice Services program created the eight positions and assigned them to the District Attorney’s Office. Because the New Hanover Community Endowment (Endowment) grant is expiring, the District Attorney has asked the County to assume the cost of those positions. He clarified that the preliminary FY 2027 amount would cover January 1 through June 30, 2027, because the grant would fund the positions through the end of calendar year 2026. He stated that, if the County permanently assumed those positions, the total annualized cost in FY 2028 would be approximately $800,000 to $900,000. Discussion ensued regarding the potential for grant-funded positions to become ongoing County obligations. Some Commissioners expressed concern that pilot programs and temporary grants can lead to future requests for permanent County funding. Others noted that the assistant district attorneys and legal assistants perform important work that supports public safety and quality of life and stated that the issue was not the value of the positions, but whether the County should assume the cost after Endowment funding ends. Regarding Wave Transit (Wave) funding, County Manager Coudriet explained that the additional funding would address on-time performance challenges caused by traffic, particularly along College Road, and help deliver the service frequency originally promised under the transit reimagination plan. The increase would maintain service frequency rather than fund expansion or replacement and that the City of Wilmington (City) and County would each cover 50% of the needed adjustment. He also noted that County participation in both stormwater and public transportation is uncommon in North Carolina and that the County’s formal role in Wave is unique among the state’s counties. He stated that staff would release a summary later that day showing significant growth in Wave ridership over the past 15 months. In response to further questions, he noted that the County’s support for Wave extends beyond the direct appropriation through paratransit and other purchased services connected to social services and senior transportation. During discussion of pre-K funding, County Manager Coudriet stated that the school system had shifted Title I and other available funds to maintain the same number of classrooms after the prior reduction. He noted that the school system’s ability to draw down certain funds depends in part on where pre-K is located and whether facilities qualify. Commissioners acknowledged that this approach is not sustainable and that certifying additional schools may affect long-term costs. Commissioners also noted that restoring the funding remains an option if they can identify how to pay for it. During discussion of the RSF, Commissioners expressed concern that continued use would reduce its long- term availability. County Manager Coudriet stated that the County had spent approximately $8 million from the original $300 million corpus, leaving about $292 million. It was also noted that, although use of the fund is not viewed as a permanent solution, it could help stabilize services and avoid increasing the tax rate in the current period. County Manager Coudriet stated that staff did not make that recommendation lightly and had repeatedly heard during budget listening sessions and online engagement over the last two years that residents expect the RSF to stabilize revenues rather than increase taxes. Further discussion ensued regarding the original purpose of the RSF and the effect of using it. In response to questions, County Manager Coudriet and Assistant County Manager Lisa Wurtzbacher stated that the RSF was intended to address economic downturns, declines in sales tax or the tax base, emergencies, or the need to avoid issuing debt or minimize tax and fee increases. Mr. Credle added that, under the asset purchase agreement, the fund is reserved for emergency spending needs, budget shortfalls or economic downturns, and minimization of future tax and fee increases. Chair Pierce noted that, based on the Board’s discussion at that point, a supermajority did not appear to support using the RSF and asked staff to show the tax implications if the fund is not used. In response to questions, Ms. Kostusiak confirmed that the preliminary budget does not include non-county agency funding. County Manager Coudriet stated that staff had not received communication about the Endowment’s broader strategy for nonprofit, arts, or cultural funding beyond the recently announced smaller, urgent, or emerging funding opportunity. He added that some organizations may have received, or may still receive, separate grant awards, but staff did not continue discussions with organizations funded through the prior pass-through because that $1.6 million is not included in the preliminary budget. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 811 In response to further questions, Ms. Kostusiak stated that she had spoken with some, but not all, of the current non-county agency recipients and that those organizations understood the Endowment was the most likely funding source to pursue going forward. She stated that she had not heard of any denials and that staff continued to serve as a liaison by helping those groups understand where to apply and whom to contact. Also, all 77 organizations funded under the prior system received notice that the current fiscal year would be the last year of County-administered funding and that future years would require other funding sources. The Board then discussed whether to restore non-county agency funding. Vice Chair Scalise noted that the Endowment can evaluate those requests and that the Board can still advocate for important community organizations. Commissioners Walker and Zapple expressed support for restoring the funding and continuing to use the County’s process to handle those requests.  Total County support for New Hanover County Schools (NHCS): Regarding the County’s funding for the school district, Ms. Kostusiak confirmed that the County funds approximately 650 school positions locally. She explained that the presentation compares the same stage of budget adoption year to year and noted that revised figures would also require staff to account for all other revised County expenditures. Commissioners acknowledged that local support has increased substantially over time, that the County provides support beyond its statutory capital obligation, and that the adopted-to-adopted comparison understates actual support in years when the Board later amends the budget to provide major additional school capital funding. Mr. Credle acknowledged that the FY 2026 column understates the County’s actual capital support when amended appropriations are included.  Economic Development funding: In response to questions, County Manager Coudriet stated that neither the current year budget nor the FY 2027 preliminary budget includes funding for the Continuum of Care. Regarding the Wilmington Symphony, Ms. Kostusiak stated that it had previously been funded through non-county agency funding rather than the economic development category. She also stated that the Arts Council had submitted an application, but staff did not include it because it had not previously fallen within the economic development classification. Chair Pierce noted that, by shifting nonprofit funding to the Endowment, the Board intended for those organizations to have access to funding levels the County could not provide. In response to questions, County Manager Coudriet stated that, if the Arts Council had submitted an application, staff could evaluate it and bring it back as a possible revision if the Board wished to add it. He stated that, unless directed otherwise, staff would recommend using the RSF for any added item. He also noted that, except for the assistant district attorneys, staff had not included any new FY 2026 items in the FY 2027 preliminary unless they were already receiving current County funding. Discussion ensued about using the RSF for ongoing costs, with some Commissioners noting that it should not be used for recurring expenses. The Board acknowledged that its options were to use the RSF, raise taxes, or make additional cuts.  Enhancements:  Enhancement process: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 812  Criteria:  Enhancements must be a new service or an increase in service beyond the existing level  Enhancements must show how they will help the county achieve the strategic objectives outlined in the Strategy Plan  Process:  Requests are vetted by IT, HR, Strategy, and Leadership for best practices and county priority alignment  Requests are reviewed and adjusted by the Budget  Recommendations are based on priority and funding availability  Preliminary recommended enhancements:  Museum and Stormwater Services showing the net impact based on increased revenue or decreased expenditures  Enhancements – detail:  Board of Elections - $77,411:  Elections Specialist position - $63,049:  Aid in voter registration, logistics, and absentee mail-in voting  Software upgrade - $14,362  County Manager – Sustainability - $25,625:  Contamination tracking study Page’s Creek - $25,625  Tax Department - $87,500:  Digital Assessor tablets - $87,500:  Includes software and hardware to modernize and upgrade assessing program  911 Call Center - $84,950:  Computer Aided Dispatch (CAD) Administrator position - $63,049:  Provides operational support to maintain CAD upgrades and data  911 Backup Center battery replacements - $225,752*:  *Funded with state surcharge funds, not using tax rate  Community Justice Services - $71,279:  Veteran Treatment Court Coordinator - $61,279:  Existing grant funded position, grant expires in October  Funded with Mental Health funding  Operating funds for Veteran Treatment Court - $10,000  Sheriff - $906,697:  Deputy - $111,225  K9 Deputy - $200,625  CSI Detective - $213,957  Equipment upgrade for security at Detention Center and Civil front desk - $97,290  Vehicle GPS launch system - $47,000  Milestone camera upgrade - $50,000  Portable camera platform - $26,000  Enhanced camera software - $65,600  Radio management software - $58,000  New E-bikes for patrol - $37,000  Museum – ($127,182):  Planetarium Educator - $73,818:  Position will allow for educational programming for the new Planetarium on Sundays and to scheduled school field trips  Expected revenue increase based on additional programming capacity – ($201,000)  Parks and Gardens - $140,000:  Parks Master Plan update - $125,000  Ogden Dog Park shade - $15,000  Fire Services Fund - $139,181:  Quality Assurance Coordinator  Stormwater Services Fund - $22,856:  Two (2) Stormwater Maintenance worker positions - $124,856  Reduce temporary contract line – ($102,000)  Recycling and Solid Waste - $773,000: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 813  Construction and Demolition (C&D) Recycling upgrades - $373,000  Consultant for waste diversion - $400,000 In response to questions, Ms. Kostusiak confirmed that the Board of Elections software upgrade would address the outdated system that contributed to delays in uploading election results during the last election cycle. She also stated that staff believes the election specialist position is sufficient for the current level of service and the upcoming election cycle, while noting that election demands vary and will continue to be evaluated over time. Discussion followed regarding the workload on elections staff from changes in election law, increased turnout, and operational requirements. It was noted that staff worked hard during the last election cycle and that the proposed enhancements are intended to support reliable elections going forward. In response to questions about the CSI detective, Ms. Kostusiak stated that the cost includes approximately $50,000 in one-time expenses for a vehicle, equipment, upfitting, training, and certifications. In response to questions about the e-bikes, she stated that the cost includes the bikes, backup batteries, charging equipment, and safety equipment needed for deputies to operate them. County Manager Coudriet added that deputies would use the bikes in parks, downtown task force work alongside the City, and other County campuses. In response to questions, Ms. Kostusiak stated that the Parks and Gardens amount meets the department’s full request and that no additional requests from that department were left off the recommended list. She also confirmed that the current parks master plan expires this year. In response to questions about the planetarium, Cape Fear Museum Director Kate Baillon stated that general museum admission would include planetarium admission, with no separate upcharge. She stated that admission for New Hanover County resident adults is $8, children are $5, and children under age 2 are free. Admission for non-resident adults is $16, and children are $10. She also stated that the planetarium would offer live star shows focused on the local night sky, as well as scheduled programming, and that the planetarium supervisor is expected to begin in May. Discussion followed regarding the facility’s unique nature and the limited number of nearby planetariums in the region. In response to questions, Ms. Kostusiak stated that the Recycling and Solid Waste amounts include facility upgrades at the recycling center, construction and demolition improvements, and a waste diversion consultant. She confirmed that the consultant is intended to help extend the life of the landfill.  Enhancements – Not Recommended:  Community Justice Services:  Pretrial Release Supervisor - $110,085  Sheriff:  Two (2) Veterinarian/Shelter Assistants - $144,328  Forensic Lab - drug toxicology equipment - $523,305*  Forensic Lab – forensic fingerprint capture - $130,000*  *Cost share with the City  Fire Services Fund:  Special Teams Coordinator - $161,586 In response to questions about the pre-trial release supervisor, Ms. Kostusiak stated that the position would help manage pre-trial conditions for individuals released pending trial, but staff believed current staffing was sufficient to continue providing that service. County Manager Coudriet added that he decided not to move forward with the position because, given limited revenues and the County’s recent staff reductions, it was not the highest priority. He clarified that the County was not cutting an existing service or position and that current staffing remains adequate to supervise the approximately 248 individuals then on pre-trial release.  Capital Improvement Plan (CIP) (5-year):  General characteristics:  Fixed asset with a useful life greater than five years  Cost of $100,000 or more  Requires more than 12 months to complete  Process:  CIP Committee evaluates capital improvement project requests  Current Capital projects: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 814  FY 2027-2031 Capital Improvement projects – General Fund: In response to questions about the northern senior resource center, County Manager Coudriet stated that the FY 2030-2031 amount represents land acquisition only, not design or construction. He stated that the project is scheduled for that year because of limited debt capacity, the anticipated school bond, and other capital commitments, including Holly Shelter Business Park and the multi-use trail. He noted that other debt capacity will roll off in later years, making the timing more affordable. In response to further questions, Ms. Warmuth stated that the County would likely need at least six acres for the site. Discussion ensued regarding the future need for a northern senior resource center. Some Commissioners noted that the project may be needed sooner given the County’s aging population, domestic migration trends, and the time required for land acquisition, design, and construction. County Manager Coudriet stated that the Board could advance the project sooner, but doing so would likely require shifting other capital priorities because of debt policy limits. He added that, although the current plan provides a framework, the Board could change it if priorities shift. In response to questions, County Manager Coudriet stated that the $800,000 shown in FY 2026-2027 for the multi-use trail is primarily for design, with possibly some limited right-of-way acquisition. He noted that the CIP reflects the Board’s prior direction to preserve as much debt capacity as possible for the anticipated school bond. In response to questions about parking at the existing Senior Resource Center, County Manager Coudriet stated that he was not aware of any major parking project in the CIP and that any repaving, restriping, or smaller operational changes would likely be handled through the operating budget rather than the CIP. Discussion followed regarding removal of the Senior Resource Center as an early voting site. County Manager Coudriet stated that staff neither advanced that decision nor cited parking as a reason for moving the site. He further stated that such a position would have been inconsistent with the administration’s view. In response to questions about the Arboretum, County Manager Coudriet stated it is not currently included in the five-year CIP.  FY 2027-2031 Capital Improvement Plan – Fire Fund:  FY 2027-2031 Capital Improvement Plan – Environmental Management Fund:  Budget timeline: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, APRIL 1, 2026 PAGE 815  Next steps:  Upcoming Budget dates  April 30 – Work Session #4  May 4 – Formal Recommended Budget  May 18 – Public Hearing  June 15 or earlier – Budget Adoption General Discussion Chair Pierce asked the Board to give staff direction on the budget and possible use of the RSF. County Manager Coudriet stated that the preliminary budget reflects the priorities staff has heard from the Board, except for items raised more recently, as well as the Board’s direction not to increase the tax rate. He stated that, while he would not recommend using the RSF for recurring costs in an ideal situation, he was trying to align the budget with the current 30.6-cent tax rate and the priorities staff had identified. Commissioner Zapple stated that he would like to see a hybrid approach that considers some use of one-time funds along with a small tax increase to address additional Board priorities. In response, County Manager Coudriet cautioned that any use of fund balance that drops the County below 16.67% would violate policy, though he agreed staff could evaluate whether any amount remained available above that minimum. Discussion ensued regarding the use of one-time funds and the Board’s remaining options. Concern was expressed that using fund balance in the current environment would create unnecessary risk, particularly given the anticipated school bond and the importance of maintaining the County’s AAA rating. County Manager Coudriet stated that, if the Board intended to use one-time money, the RSF was the preferred source because it would not affect the County’s unassigned available fund balance or debt position in the eyes of rating agencies. It was also noted that, although the Board could change its fund balance policy, doing so could still affect how the bond market views the County. Discussion then shifted to the broader choice among a tax increase, service cuts, or use of the RSF. Vice Chair Scalise stated that he did not support a tax increase or reducing the service recommendations staff had presented and viewed the RSF as an appropriate option at a time when residents were facing inflation and higher costs. Commissioner Rivenbark stated that, if the Board uses the RSF, it should do so on a year-to-year basis rather than as a permanent funding plan. Commissioner Walker stated that she did not support using fund balance and did not want to jeopardize the County’s financial position or bond rating. She also expressed concern about relying on one-time money year after year and asked staff to present all available scenarios so the Board and the public could understand the implications of each option. Chair Pierce stated that she would not support use of fund balance given staff’s concerns and the need to preserve a strong position for the school bond. She reiterated that the remaining options were use of the RSF, a tax increase, or further cuts. Vice Chair Scalise added that if the Board intended to restore full pre-K funding or increase school support beyond the current recommendation, the RSF appeared to be the most realistic mechanism to do so this year. Commissioner Zapple stated that the County had faced similar structural issues in consecutive years and that continuing to rely on one-time money without addressing the revenue side would lead to the same discussion next year. He suggested that the Board consider a structural solution, such as a one-cent tax increase or a hybrid approach combining a smaller tax increase with partial use of the RSF. Chair Pierce stated that if a majority of the Board did not support staff’s recommendation to use the RSF, staff would need to identify other revenue options. County Manager Coudriet noted that the Board would soon discuss the tax impact of the proposed school bond, meaning two tax-increase discussions could occur at the same time. He stated that staff’s best estimate for the bond tax equivalent remained about 1.75 cents, subject to the Local Government Commission’s final determination, and that staff would likely recommend implementing that increase in the fiscal year after voter approval so the County could begin raising the revenue while the purpose remained fresh in voters’ minds. Chair Pierce asked Commissioners to continue the discussion over the coming days so staff could receive clearer direction by the following week and prepare for the April 30, 2026 budget work session. ADJOURNMENT There being no further discussion, Chair Pierce adjourned the meeting at 3:14 p.m. Respectfully submitted, Kymberleigh G. Crowell Clerk to the Board Please note that the above minutes are not a verbatim record of the New Hanover County Board of Commissioners meeting. The entire proceedings are available online at www.nhcgov.com.