Nags Head proposes 2023-24 recommended budget with rate increase

Published 11:52 am Wednesday, May 10, 2023

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Nags Head town manager Andy Garman presented his fiscal year 2023-24 recommended budget to commissioners, suggesting a 4.25 cent tax increase to balance the budget.

The increase comes to pay the debt service on the new Public Services Complex currently under construction and the water meter replacement project, for which the town sold limited obligation bonds in February.

“We recognize this represents a substantial request from the Nags Head community,” Garman said to commissioners last Wednesday at the regular monthly meeting.

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“This [Public Services Complex] is the largest vertical construction project in our history according to [town engineer] David Ryan and one we hope to be proud of for 60 plus years. It is the operational hub of our largest department – one that impacts us all daily and provides the most visible level of service to our town and visitors, much like beach nourishment which also required significant additional resources.”

“This is a foundational project for our community and [the rate increase is] not something we would ask for often,” Garman said.

A 4.25 cent increase would bring the total town tax rate to 33 cents per $100 of assessed value. For example, a property valued at $500,000 would be taxed $1650, an increase of $212.50 per year.

If approved, this would bring Nags Head’s rate close to neighbors Manteo (34.55 cents) and Kill Devil Hills (32 cents), and above Kitty Hawk (30 cents), Southern Shores (23.58 cents) and Duck (22 cents).

A 12.3% water rate increase was also recommended, which equals about an extra $8 every two months for the average household.

“This budget has been a work in progress over the last two years as we have aligned our projects with the Town’s strategic plan, which has a greater focus on maintenance of our assets and infrastructure,” Garman said.

Other notable items from the budget, which can be found in a user-friendly format on the town’s website, include a 6.5% cost of living increase for town employees, the hiring of two additional police officers and funding for part-time firefighters.

If approved, the 2023-24 general fund would total $37,710,997, an increase of about 8% from the 2022-23 budget. The increase comes mostly from transfers from the capital investment fund to the general fund – for a debt service payment of $775,250 for the Public Services Complex and other capital improvement projects.

Occupancy tax, sales tax and land transfer tax equal revenue of over $10,000,000. Occupancy and sales tax are budgeted higher, but land transfer taxes are budgeted lower because Garman said the housing peak has leveled off and mortgage interest rates are higher than last year.

For fiscal year 2022-23, Nags Head was awarded over $3.7 million in grants.

A budget workshop is scheduled for Wednesday, May 17 at 9 a.m. in the Board of Commissioners Room at 5401 S. Croatan Highway, followed three weeks later by a public hearing on June 7 at 9 a.m.

Commissioners are set to adopt a FY 23-24 budget by June 21, effective July 1.