BY MILES LAYTON

ELIZABETH CITY – In a move praised by local officials as fiscally responsible and forward-looking, the Elizabeth City Council has unanimously approved in June the city’s operating budget for Fiscal Year 2025-26 that began July 1. The $82.2 million spending plan holds the line on property taxes and utility rates while investing in critical infrastructure, public safety, and employee compensation.

“This budget reflects our commitment to responsible fiscal management, strategic investment in critical infrastructure, and continued service improvements for our residents,” said City Manager Reginald Goodson in his budget message delivered to the mayor, council members, and citizens.

No Tax Increases, Strong Fund Balance

The city’s property tax rate will remain at $0.59 per $100 of assessed valuation—unchanged from the prior year. With an ad valorem tax collection rate of 96.13% and 100% collection on registered motor vehicles through the North Carolina Vehicle Tax System, the stable rate is expected to generate approximately $9.65 million in revenue for the General Fund.

Elizabeth City continues to stand out with a General Fund balance of 70%, significantly above the 45-46% range typically held by peer municipalities. This strong reserve allows the city to fund capital outlay projects without borrowing or raising taxes.

“We’re in a very solid financial position,” Goodson noted. “This gives us the flexibility to fund essential capital projects and operational needs without burdening taxpayers.”

Major Capital Investments and Department Enhancements

Among the highlights of the FY 2025-26 budget are substantial investments in capital improvement projects and new personnel across several departments:

• Fire Department: Funding for a new fire truck, building improvements, and hiring two full-time fire control specialists. An EMS training initiative will prepare fire staff to serve as first responders.
• Public Works: Acquisition of a new street sweeper and the hiring of an additional street technician.
• Customer Service: Renovation of City Hall’s customer service area to improve accessibility and safety. Two part-time representatives will be added to expand service hours until 7:00 p.m.
• Development Services: Office remodeling and a legally required Land Use Plan update.
• Public Utilities: Hiring of one additional electric department staff member.
• Parks & Recreation: Upgrades to city parks, including improvements at Johnnie Walton Park.

The budget also includes a proposed capital lease agreement with Enterprise Fleet Services to replace aging vehicles. Thirty new vehicles are budgeted for 2025 at a cost of $599,009, pending approval by the Local Government Commission.

No Rate Increases for Utilities

Consistent with the city’s conservative fiscal approach, the approved budget includes no rate increases for electric, water, sewer, stormwater, or solid waste services.

• Electric Fund: $35.45 million
• Water & Sewer Fund: $12.3 million
• Stormwater Fund: $612,136
• Solid Waste Fund: $1.94 million

Local option sales tax revenues continue to rise, with FY 2024-25 expected to close at $4.47 million—an increase of 2.9% over the previous year. That growth, paired with a steadily increasing tax base, is credited to new developments including Sentara’s upcoming hospital and various commercial and residential projects.

Employee Support Without COLA

Instead of implementing a costly across-the-board cost-of-living adjustment (COLA), the city will reward employees with a one-time $1,000 bonus—will paid in a lump sum in July 2025. Longevity pay and a $300 Christmas bonus will also continue.

The switch from Cigna to Blue Cross and Blue Shield for the employee health plan saved the city $113,000. These savings enabled a significant reduction in dependent coverage rates, from $1,283 per month to $771.

“This budget allows us to show appreciation for our employees without creating long-term fiscal obligations,” Goodson said.

General Fund Spending Up, Still Balanced

The General Fund budget totals $31.86 million for FY 2025-26, up from $27.33 million the previous year. Despite the increase, the budget remains balanced, as required under North Carolina law.

General Fund revenues are primarily derived from property taxes and local option sales taxes, which together make up approximately 49% of the fund’s income. Other key sources include Powell Bill funds, investment earnings, permits, and transfers from the Electric and Water/Sewer Funds.

Goodson emphasized that the budget uses fund balance reserves solely for one-time capital needs—not for recurring expenses—a move that aligns with best practices in municipal finance.

Looking Ahead

While the budget lays a strong foundation for the coming year, city officials are already eyeing the future. A recently completed Water and Sewer rate study and an ongoing Electric rate study may inform adjustments in coming years to support long-term infrastructure needs.

“We recognize that our growing city will require ongoing investment,” Goodson said. “This budget positions us well for that future.”

In closing his message, Goodson expressed gratitude to the city’s department heads and budget team, including Chief of Staff Monica Cole, Deputy Finance Director Brian Lewis, and Financial Consultant Susan Tezai.

“Together, we will continue to make responsible and impactful decisions for our community,” he said.

The City Council’s approval marks the official start of the FY 2025-26 budget year, effective July 1, and signals a continued focus on stability, service, and smart growth for Elizabeth City.