Board of Commissioners

MINUTES TOWN OF NAGS HEAD BOARD OF COMMISSIONERS BUDGET WORKSHOP WEDNESDAY, MAY 17, 2023 The Nags Head Board of Commissioners met in person at the Board Room located at 5401 S Croatan Highway, Nags Head, North Carolina on Wednesday, May 17, 2023, at 9 a.m. for a Budget Workshop. Board members Mayor Ben Cahoon; Comr. Renée Cahoon; Present: Comr. Kevin Brinkley; and Comr. Bob Sanders Board members Mayor Pro Tem Michael Siers Absent: Others present: Town Manager Andy Garman; Amy Miller; Kelly Wyatt; Nancy Carawan; David Ryan; Randy Wells; Shane Hite; Perry Hale; Chris Montgomery; Jan Mielke; and Town Clerk Carolyn F. Morris Call to Order Mayor Cahoon called the Budget Workshop to order at 9 a.m. He then turned the presentation over to Town Manager Andy Garman. Introduction Town Manager Andy Garman explained that today’s workshop presentation on the recommended budget includes the following: major projects, equipment, personnel, Public Services Project and the AMI (smart meter) projects with associated debt. The importance of these items will be explained and he noted that staff is present to answer any questions the Board may have. The specific overview items included the following: Capital Investment Fund, Non-CIP Capital Outlay, Pay/Benefits, Departmental Discussion, and Board Priorities/Questions. Capital Investment Fund (CIF) Review Finance Officer Amy Miller presented the Capital Investment Fund Review which she explained pays for the CIP debt service and/or non-capital project items. She noted that the CIF document is a fluid document and is a snapshot in time with the best information at that particular time. All debt service is included in the Capital Investment Fund. The main spreadsheet (funding model) was presented and reviewed with Board members by Finance Officer Miller. The information presented includes the following highlights: FY 23 projected fund balance – 47% FY 24 funding of $4,120,000 from General Fund Net of grants, FY 24 expenditures - $4,341,361  BOC Budget Workshop mins May 17, 2023 Model builds in $4,349,928 of capacity FY 24 fund balance – 41% FY 25 Funding of $3,700,000 from general fund Net of grants, FY 25 expenditures - $3,917,389 Model builds in $3,922,499 of capacity FY 25 fund balance – 34% Public Services Complex highest debt service year C Assumes no excess general fund contributions Assumes FY 26 sidewalk project financed Project Area #4 Bonnett St. pump station FY 28 - Fully grant funded New fire truck debt hits FY 29 - $1,000,000 Plugged in actual expenditure projections FY 26-28 Pay-go expenditures based on a growth formula FY 29 and beyond Non-CIP Capital Outlay Finance Officer Amy Miller summarized the following slide information with Board members: Bond Debt: Beach nourishment - $2,311,050 (final) Public Services Complex - $775,250 Administrative Services: Plug-In hybrid vehicle (replace travel car) - $47,741 Planning: Whalebone Park restroom facility - $112,000 (grant) Facilities Maintenance: Epstein St. bath house -$600,000 ($450,000 grant) Multi-use path repairs - $80,000 Pickup trucks (2) - $92,700 ($46,350 each) Bobcat -$69,000 Streets and Stormwater: Old Nags Head Place - $600,000 - Grant -$250,000 - Streets and Stormwater Capital Reserve -$250,000 - Homeowners Association portion - $100,000 Police: Equipment for five vehicles - $113,889 (this is for the five vehicles purchased in FY 23). Fire and Ocean Rescue: Boat motor - $15,000 Wave runner - $10,990 Beach patrol four-wheelers (2) - $13,000 ($6,500 each) Water Distribution: Service truck - $72,500 Mayor Cahoon questioned when the Epstein Bath House would be re-bid; Town Engineer David Ryan responded that the re-bid should take place in the June/July 2023 timeframe. Comr. Brinkley expressed concern about the purchase of an expensive hybrid vehicle when a tax increase is being imposed on the public. Board members concurred with Comr. Brinkley. Pay And Benefits - Discussion of Recommendations Finance Officer Amy Miller presented the following slide information relating to the operating budget: 2  BOC Budget Workshop mins May 17, 2023 Consumer Price Index (CPI) - January 2023 is 6.4% Recommended COLA is 6.5% which is $585,000 general fund and $65,000 water fund. COLA is historically tied to the CPI for the budget. Received local feedback regarding COLA: Duck – 8.5% COLA, 6% merit Southern Shores – 6.5% COLA, 5% merit Kill Devil Hills – 6.5% COLA Health insurance Human Resources Coordinator Jan Mielke presented the following information relating to health insurance and personnel: High Deductible Health Plan Increase Town HSA contributions Neutral cost to Town Health insurance increase of 2% with $30,000 general fund impact Total Contribution Current Employee Only 1,000 Employee/Spouse 1,500 1,250 Employee/Child 1,250 1,000 Employee/Children 1,250 1,000 Employee/Family 1,750 1,500 Departmental career progression plans were distributed with the budget and are attached to and made a part of these minutes as shown in Addendum “A”. It was noted that the travel and training budget was impacted more so than salaries. Positions: Two additional Police Officers Part-time Fire Fighter funding Do not fund Deputy Public Service Director Do not fund Water System Manager position Continued implementation of within-grade increases Continued 401k implementation recommendation – increase to 5% with $60,000 general fund impact Comr. Brinkley asked about the Town’s Volunteer Fire Department program; Chief Wells said they do have an active program but are working toward obtaining more volunteers. Board discussion Mayor Cahoon pointed out that the budget does include a tax increase and a big part of it is the public services facility; he pointed out the Town helps its residents/property owners with recycle costs and helps offset the cost to move sand, in addition to including curbside pickup. There are a lot of good services that the Town provides its citizens and while nobody likes a tax increase, there are improvements that need to be made to neighborhood streets, etc. Mayor Cahoon said that he is happy to be a part of this Board and is pleased with the undertaking of projects for drainage, pavement, pipes, waterlines, etc to raise the level of services the Town provides. 3  BOC Budget Workshop mins May 17, 2023 Comr. Brinkley noted that this is his first term and he appreciates that this Board is aggressive in doing projects and he also appreciates Town Manager Garman and Finance Officer Amy Miller as well as Dept Heads for all their work in the budget preparation. Town Manager Garman pointed out recently released budgets by other cities/towns and said that the City of Raleigh is proposing a .04 tax increase as is Chapel Hill with a proposed .05 tax increase. He is seeing a theme of tax increases to accommodate cost of living, project work, and a focus on public safety, as well as the ability to obtain and retain employees. Comr. Renée Cahoon stated that the proposed budget is a good budget overall and it was known that the Public Services Facility would come with a cost. Comr. Brinkley emphasized the importance of the new Public Services Facility to better serve our citizens. Town Manager Garman reported that the Public Hearing on the budget is scheduled for the June 7th Board of Commissioners meeting. He stated that staff will await guidance from the Board as to when to expect consideration/adoption of the budget; it has been posted on the web site and information has been included in email broadcasts. Mayor Cahoon complimented staff on a very easy-to-read budget; Town Manager Garman pointed out that the budget document was completely revamped last year. Board members expressed their appreciation for all the hard work done by staff. Adjournment MOTION: Comr. Renée Cahoon made a motion to adjourn. The motion was seconded by Comr. Brinkley which passed 4 – 0 (Mayor Pro Tem Siers was not present.). The time was 9:43 a.m. ________________________ Carolyn F. Morris, Town Clerk Date Approved: ___June 7, 2023_________ Mayor: ______________________ Benjamin Cahoon 4