Chowan County manager proposes 2.5-cent tax increase to cover school requests, employee pay and COA funding

Chowan County Manager Kevin Howard told the Board of Commissioners on May 22 that an updated budget spreadsheet — which incorporates suggestions from earlier May meetings — recommends a 2.5-cent property tax increase and increases the planned appropriation from fund balance to $1.6 million to balance the fiscal 2025–26 budget.

Howard said the spreadsheet also reflects additional tax revenue expected from the Timbermill project and that the extra revenue would reduce the amount of fund balance needed to balance the budget. He told commissioners the county identified potential expenditure reductions totaling $312,347 by freezing positions, delaying a server upgrade and trimming travel budgets.

The recommended package includes a 5% cost-of-living adjustment for county employees, a 3% career-ladder adjustment for the sheriff’s office ($364,929), an additional $35,542 for the College of the Albemarle (COA) and requests from the school system. The manager’s worksheet shows the schools’ tier-one request to maintain level funding at an additional $836,000 and a tier-three teacher supplement request of $340,000. The changes remove an originally proposed $1.3 million fund-balance appropriation and replace it with a $1.6 million appropriation in the manager’s recommended spreadsheet.

School representative Ms. Ward told the board that loss of average daily membership (ADM) has reduced state revenue to the district and that teaching positions cannot be cut as a direct consequence of that ADM loss. "The tier one funding request keeps the school budget at 'cost of business,'" she said, and emphasized that "the number of teaching positions needs to remain the same." Board members pressed on whether any county increase could be tied to measurable results.

Board members also discussed classroom behavior problems and gaps in programming the district offers. Several commissioners said they were considering including the schools’ tier-three supplement request — intended as a supplement to attract and retain teachers — in the county budget. The board agreed both governing bodies need to meet to discuss a fund-balance policy agreement and that it would ask the school system to consider using some of its fund balance next year to reduce the county appropriation.

On utilities, Howard said the Water Fund budget does not include rate increases and noted a Cape Colony water-line replacement project estimated at roughly $5–$6 million is not funded in the coming fiscal year. He recommended the county meet later with county engineers to evaluate whether a rate adjustment or other action would be needed to fund the project or to improve eligibility for grant programs the county has previously been denied because rates were too low.

Dr. Jack Bagwell and College of the Albemarle representatives presented COA’s 2025–26 funding request; the manager’s change worksheet includes an additional $35,542 for COA's current expense request.

Howard told commissioners that without additional fund-balance appropriation the county would need a 7.61-cent tax increase to balance the budget. The manager’s recommended final spreadsheet instead shows a 2.5-cent tax increase combined with the fund-balance changes and the specific program additions described above.

No formal motions or votes were recorded at the special meeting; Howard said he will continue work on the Fire Fund with the Town Manager and return with recommendations at a future meeting. Chair Bob Kirby called the meeting to order and adjourned it when business concluded.