Barely three weeks into the new calendar year, Alamance County’s top brass are already bracing themselves for a potential shortfall of $12.9 million in the county’s next annual budget.
This projected, eight-figure gap was just one of the many weighty points that came out of a two-day retreat that the county’s board of commissioners held at the Graham Public Library on Tuesday and Wednesday to prepare for a new round of budgetary deliberations later this year.
Among the other noteworthy matters that the commissioners bandied around were concerns about the depletion of the county’s savings, the leveling off of sales tax receipts, the added cost of state and federal policy changes, and the future cost of various big-ticket projects.
Along the way, some of the commissioners shared their growing misgivings about a $37 million courthouse expansion that’s currently in the development stage. Others back-peddled in their support for a proposed referendum on a 1/4-cent sales tax increase, while the board as a whole expressed a mixture of apprehension and hope about the county’s next property tax revaluation, which is scheduled to take place early in 2027.
Yet, in the end, just about every member of the county’s governing board seemed pleased with the outcome of the board’s latest retreat.
“I like the way it went this year,” commissioner Ed Priola said as he summed up what appeared to be the prevailing mood of the group. “It was smooth. There was more information, and more opportunities for feedback.”
Priority plus
The promotion of a constructive discourse among the commissioners had been one of the primary objectives behind this year’s retreat. In fact, Alamance County’s manager Heidi York had told the board’s members that she hoped this two-day confab would foster “a rich discussion” about their respective priorities and the county’s direction as they head into a new budget season this spring.
This long-form discussion ultimately involved four of the five county commissioners. John Paisley, Jr., the board’s former chairman, absented himself from the retreat for health reasons – although he followed along with, at least, part of the discussion from his home computer.
For the rest of the board, the first day of this year’s retreat was largely given over to staff presentations was well as lectures on “good governance” from Neil Emory and Amy Cannon – a pair of retired county administrators who now ply their skills for the North Carolina Association of County Commissioners.
The NCACC had dispatched Emory and Cannon to facilitate Alamance County’s retreat at no cost to the county. Even so, their intervention was not universally welcomed – with commissioner Priola being particularly critical of a perceived bias in some of the duo’s conversation starters.
Priola went on to object that Cannon and Emory didn’t address his own preferences for spending cuts and performance measures in their overview of local government finances.
“The problem is that we’re spending more than we’re taking in. We’ve had the sugar high of the covid money, and we as a board are not adjusting to saying ‘no.’ It’s not all necessary. We’ve got to start with protecting the community. Everything after that is not a sacred cow.”
– County commissioner Ed Priola
“The problem is that we’re spending more than we’re taking in,” he later told the rest of the board. “We’ve had the sugar high of the covid money, and we as a board are not adjusting to saying ‘no.’ It’s not all necessary. We’ve got to start with protecting the community. Everything after that is not a sacred cow.”
Emory, for his part, conceded that the elimination of staffing and programs can have a salutatory effect if used wisely.
“If you do cuts,” he added, “you need to make sure that due diligence is done to make sure there’s a savings.”
In the end, the NCACC’s facilitators wove Priola’s priorities into the list they had elicited from the rest of the board through a questionnaire that they circulated before they met with the commissioners. Cannon summed up many of these items when the board’s conversation continued on the retreat’s second day.
“The board has a desire for maintaining a high-quality level of services for the citizens,” she recalled on Wednesday morning. “The board mentioned the public school system and public safety…In addition to that, the board had a desire for maintaining fiscal stability…and there was a desire for having performance metrics around efficiency…We also talked about maintaining a balance between commercial and residential development, so the development is not all on the residential side.”
Mind the gap
During the second day of the retreat, the commissioners received a great deal of financial data, including a midyear report on the current state of the county’s finances.
Susan Evans, the county’s finance director, said that, as things currently stand, the county’s actual revenues for this fiscal year are predicted to exceed outlays by $522,756. She added, however, that this anticipated surplus will do little to replenish the usable reserves associated with the county’s general fund, which previous boards of commissioners have strived to maintain at 20 percent of the fund’s annual outlays.
Evans observed that the county’s last two financial audits have shown the fund’s “unassigned” reserves go from 19.87 to 17.18 percent (the latter of which amounts to $37,259,455) as the commissioners have grown increasingly reliant on savings to offset the county’s shortfalls in revenues. She went on to advise the commissioners to come up with a “sustainable plan to restore” $6,127,919 to these savings in order to bring them back up to 20 percent of the general fund’s budget.
Rebecca Crawford, the county’s budget director, predicted that a full course adjustment in the board’s use of savings as a budgetary stopgap will have a considerable impact on the county’s next annual budget.
[Story continues below photo.]
“We already see a gap,” she admonished the county’s governing board. “There are a lot of pieces that are playing into this, but the largest is the appropriated fund balance that you used in 25/26.”
Crawford went on to add that, at the moment, the county’s revenue projections suggest a shortfall of $12,890,928 in the financial cycle that will begin on July 1, 2026.
Amy Cannon urged the commissioners to resist the temptation to use the general fund’s savings to fill this prospective gap.
“It’s a red flag to rating agencies if you continue to rely on one-time revenue as a balancing strategy.”
Cannon’s advice was reinforced by county manager Heidi York despite some pushback from at least one county commissioner.
“If we would continue to see the trend in fund balance, we’ll go below our current 17 percent,” the county manager said.
“That would be my preference, yes,” commissioner Ed Priola went on to reply.
The departmental perspective
The commissioners also heard from some of the county’s department heads during this week’s retreat about the various issues that will impinge on their upcoming spending requests to the county manager.
Joel Bonestell, the county’s new IT director, offered the county’s elected leaders an overview of some of the latest technological initiatives that he and his staff have in the works.
These ventures include the introduction of body cameras at the local sheriff’s department, which Bonestell said has already activated about 50 of the 300 or so cameras that the county has purchased for the agency’s jailers and deputies. Bonestall also alluded to a $2.3-million effort to upgrade the county’s tax appraisal system, an overhaul of central permitting that’s expected to cost about $241,000 a year over three years, and a transition from analog to wireless service for things like the county’s elevators that he predicted will ultimately reduce the county’s utility costs.
Candice Gobbel, the county’s social services director, briefed the commissioners on a number of incoming new costs that she attributed to recent changes in federal policy. She noted that, in October of 2026, the federal government plans to pare back its contribution to the some of her agency’s personnel from 50 to 25 percent. She added that this change will leave the state government holding the bag for about $890,000 in administrative expenses.
Gobbel added that North Carolina may have to absorb an even bigger sum in 2027 when the feds plan to hold back nutritional subsidies from states that have administrative error rates in excess of 6 percent. She added that with a current discrepancy of about 10.2 percent, North Carolina may find itself on the hook for $420 million in benefits – unless it decides to dispense with nutritional subsidies altogether.
Meanwhile, William Mauney, the county’s interim EMS director, informed the commissioners that he’ll need $115,000 to implement a plan to equip his agency’s medic trucks with blood for transfusion as well as another $30,800 to provide each ambulance with its own video laryngoscope.
Mauney also warned the commissioners of a crippling problem with turnover that he said has left EMS with 42 paramedics to fill 64 full-time positions. He added that he and his colleagues have come up with a couple of ways to address this staffing shortfall. He pointed, for instance, to a certification partnership with ACC that he said could have an appreciable effect on vacancies later this year. Mauney went on to allude to “innovation with treatment protocols and equipment” that may also bear fruit in the future.
On a broader, organizational scale, the commissioners heard some additional staffing-related concerns from Tanika Bryant, the county’s personnel director.
Bryant told the commissioners that gripes over compensation account for a large share of the 169 resignations that the county witnessed in 2025. She conceded that the county’s exit interviews, which are in the process of being revamped, don’t currently provide the data to confirm this assumption.
“But the main thing I’ve heard from employees in the short time I’ve been here is salaries and longevity,” she went on to assure the county’s governing board.
Bryant’s suspicions about pay-related defections were echoed by county manager Heidi York, who stressed that longevity has been a particular source of concern since she froze this annual benefit as a cost-cutting measure.
“We are absolutely seeing that cited in our exit surveys,” she told the commissioners, “and it has sped up retirements.”
Revving up revenues
For many years, the county was able to replenish its savings thanks to higher-than-expected sales tax receipts. Evans warned the commissioners that recent trends have shown a leveling off in these funds that seems likely to continue for the foreseeable future.
“We’ve talked before about how sales tax is volatile,” she added. “We’ve also heard a lot about the emotions that the consumers have felt over the past few months, and we won’t have those numbers until February.”
Some members of the county’s governing board have been inclined to reassert their control over this variable revenue stream by ramping up the local sales tax rate by 1/4 cent so that it’s set at the maximum level allowed under state law.
In order to avail themselves of this option, the commissioners must first put this 1/4-cent hike before the county’s voters. Previous boards of commissioners have done just that, only to have the local electorate reject the idea on four separate occasions.
Last year, the potential windfall from a higher sales tax was enough to stir the imagination of newly-appointed commissioner Kelly Allen, who called for another sales tax referendum in tandem with the board’s vice chairman Steve Carter.
This year, however, the pair were much less taken with the idea when the county manager broached it at the retreat.
“Since this has been explained,” Allen, who now serves as the board’s chairman, conceded, “I’ve heard a lot of people say, ‘I’d rather pay an extra $200 on my property taxes’ [than see a sales tax increase].”
“If we can’t be unanimous on it, why have it?” Carter concurred. “You also don’t know how many people are going to vote for it; it’s been voted down four times before.”
Capital case
Another area where there’s been some fluctuation in the board’s outlook is the county’s capital improvement plan.
The county’s finance director told the commissioners that the county may ultimately have to take out a bank loan in order to pay for some of higher priority projects on its institutional to-do list.
Evans went on to suggest installment financing to provide $5 million for a new EMS base in Mebane, another $5 million to update the computer-aided dispatching system for the county’s emergency services, and $22 million to expand the Judge J.B. Allen, Jr. Court House in Graham – which is expected to cost a total sum of $37 million.
The finance director’s mention of the courthouse expansion drew immediate pushback from the board’s two most outspoken critics of this project.
“I think the courthouse in its current form is an albatross,” commissioner Ed Priola declared. “We should go back to the drawing board…I believe that we have insufficient data that this is what we need to spend $37 million on.”
“Everything that we’re spending is a string attached to the courthouse,” agreed commissioner Pam Thompson, who has consistently voted against every item even remotely linked to this venture.
For the first time on Wednesday, Thompson and Priola were joined in their objections to this project by a third member of the county’s governing board.
“We need to rethink the whole courthouse thing,” Kelly Allen, the board’s chairman, asserted, “because that is a lot of money to pay out.”
None of these three county commissioners seemed to relent when Alamance County’s attorney Rik Stevens recalled that a judge had ordered the county to construct the original Allen courthouse because a previous board of commissioners had failed to provide adequate accommodations for the local court system.
In the meantime, York informed the project’s detractors that the bill for the building’s proposed expansion isn’t expected to come due in the upcoming financial cycle.
“I don’t think the decision to stall the courthouse impacts any of this,” she insisted.
To be continued…
York found the commissioners much more amenable to her suggestions for their forthcoming deliberations about the county’s next budget.
The county manager made no bones about the difficulties that had accompanied the board’s deliberations over the county’s current spending plan. She recalled that her own recommended budget to the commissioners had been undermined by a battery of spending cuts, which she had prepared as a conciliatory gesture to board members who demanded an alternative to a property tax increase. She added that these two alternatives were ultimately joined by as many as seven others, which she and her fellow administrators drew up at the behest of individual commissioners.
“Last year, it got really hairy with the number of scenarios that staff was asked to bring back,” the county manager added. “We don’t want to go down that road…we don’t want staff standing up in the middle of meetings, making calculations on the fly…For those of us who have been through it a few times, that was a tough one.”
York’s account of last year’s debacle got no argument from commissioner Priola.
“It was chaotic, and that’s being kind,” he recalled. “I think the process went way off the rails.”
On York’s recommendation, the commissioners accepted a few changes in the process they use to craft the county’s next spending plan. They agreed, for example, to hold the state-mandated public hearing earlier in the process in order to get an early read on the views of their constituents. They also gave York the go ahead to prepare an electronic survey, which the local library system will replicate in hard copy form for the county’s less web-savvy residents.
In the meantime, the commissioners agreed to let York prepare a proposed budget that she thinks is best for the county and to make any adjustments once it debuts. Priola said that he, for one, would still like the manager to brainstorm some proposed cuts as an alternative to any property tax increase that she may propose to the board. York said that she would prefer to float this alternative at one of the board’s work sessions rather than couple it with her recommended budget, which gave residents the wrong impression when she did it during last year’s budget process.
York went on to assure the commissioners that whatever recommendations she ultimately makes will already have been sliced, diced, and pureed by the time they reach the county’s governing board.
“But the time I present my budget, I’ve already said ‘no’ to a lot of requests,” she added. “I’m not bringing you a budget that’s just spend, spend, spend… I’m telling the commissioners that, based on the needs of 25-plus departments, this is what it costs to provide services at a recommended level…you make changes to the recommended budget based on other factors.”
