Lenoir County approves fire department payment plan after sales tax distribution errors
The Lenoir County Board of Commissioners approved a payment schedule Monday to address more than $1.8 million in sales tax distribution discrepancies involving several volunteer fire departments.
The resolution authorizes a volunteer fire department sales tax reconciliation payment schedule and standard hold harmless agreement totaling $1,847,828.20.
County Manager Michael James said county staff worked with fire departments and an outside consultant over the past year to review sales tax distributions from the county to fire service districts.
“That review was complete and identified and corrected discrepancies spanning from FY 2010 through FY 2025, again resulting in that total payment amount of a little over $1.8 million,” James said.
The payment schedule spreads repayment over four fiscal years, with an estimated budget impact of about $500,000 per year. James said the first payment is scheduled for July in fiscal year 2027.
The payment plan is included in the county’s newly approved fiscal year 2026-27 budget.
“As noted earlier in the budget discussion, the first payment is scheduled for July of FY 2027,” James said. “The fire departments have expressed support for both the process and the final proposal and are prepared to move forward as well.”
The hold harmless agreement was drafted by the county attorney and reviewed by the fire departments.
“This formalizes a legal understanding between the county and the departments,” James said.
According to the agenda packet, payments are scheduled through fiscal year 2030. The departments listed in the schedule and their total payment amounts are:
North Lenoir Volunteer Fire Department: $1,032,110.48
Southwood Volunteer Fire Department: $279,845.70
Sandy Bottom Volunteer Fire Department: $220,795.75
Grifton/Hugo Volunteer Fire Department: $140,727.28
Deep Run Volunteer Fire Department: $112,075.03
Moseley Hall Volunteer Fire Department: $42,468.28
Cherry Tree Volunteer Fire Department: $19,805.68
James recognized Craig Jones, a Southwood Volunteer Fire Department board member and appointed representative for all Lenoir County volunteer fire departments working with the county on the issue.
“As the board knows, I’ve gotten a chance to work closely with Craig through this process of identifying the issue and correcting the issue and being kind of a conduit between myself and the fire community,” James said. “I appreciate how you handled that.”
Jones said the issue was identified in early June 2025 and involved discrepancies between projected sales tax amounts and the sales tax actually received over several years.
“About a year ago, early June of last year, we come to realize that there was some discrepancies in sales tax projections and sales tax that was actually received there last number of years,” Jones said.
He said the process for distributing sales tax funds to the school system and county fire departments is complicated.
“Through a lot of communication, a lot of back and forth emails, a lot of face-to-face meetings, and trying to dig through, really what we’ve come to find out is the process of figuring out when the state sends back to the county the sales tax, the part that’s allocated to not only the school system, but the county fire departments,” Jones said. “It’s a really complicated process.”
Jones said an outside consultant helped sort through the issue. He also said the county and fire departments discussed how payments could affect departments that receive grants.
“We made some recommendations to him on some of those decisions for some departments that receive grant funding,” Jones said. “Because some of this money that comes in throughout the year could adversely affect some of the departments that receive some grants throughout the state.”
Jones said the departments supported the proposal.
“All the departments, we’ve got their support,” Jones said. “And to get a group of 100% volunteers that you don’t pay a dime to, get everybody to come to an agreement on something is just short of a miracle in our world.”
Chair Linda Rouse Sutton said the process improved communication between the county and fire departments.
“They say something good comes out of everything, and I think it really opens up lines of communications and people got to know each other better, and I think we’re stronger forward,” Sutton said.
Commissioners approved the resolution.
