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2007-02-09 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION OF FEBRUARY 9-10, 2007 BOOK 31 PAGE 33 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Friday, February 9, 2007, at 1:10 p.rn. in Conference Room 601 at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present were: Chairman William A. Caster; Vice-Chairman Robert G. Greer; Commissioner Ted Davis, Jr.; Commissioner William A. Kopp, Jr.; Commissioner Nancy H. Pritchett; County Manager Bruce T. Shell; County Attorney Wanda M. Copley and Clerk to the Board Sheila 1. Schult. Others present were: Budget Director Cam Griffin; Senior Budget Analyst Norma Troutman; Budget Analyst Donna Seal; Finance Director Avril M. Pinder; Assistant County Manager Andre' Mallette; Assistant County Manager Patricia A. Melvin; Assistant County Manager Dave Weaver; Parks Director Neal Lewis; Tax Director Bob Glasgow; Planning Director Chris 0 'Keefe; Deputy County Attorney Kemp Burpeau; County Engineer Greg Thompson; Environmental Management Director John Hubbard; Interim Landfill Manager Sam Hawes and Recycling Manager Jason Hale. Chairman Caster called the meeting to order and requested County Manager Bruce Shell present a budget overview for FY 2007 -2008. OVERVIEW OF TOPICS County Manager Bruce Shell reviewed the agenda topics for the meeting and requested Finance Director Avril Pinder to make the staff presentation on the financial health of the County. PRESENTATION ON THE FINANCIAL HEALTH OF THE COUNTY Finance Director Avril Pinder presented an overview on the County's fund balance and debt service reporting that: . The County's umeserved/undesignated fund balance on June 30, 2006 was $51,971,455. . The County continues to maintain a strong AAI Aa2 bond rating. . The current outstanding debt is in the amount of$344,133,537. This amount includes $1.7 million debt service for Cape Fear Community College; $155 million debt service for the New Hanover County School System and $1.1 million debt service for the Fire District. Finance Director Pinder continued reporting that on the horizon is approximately $40 million, the second installment, for the School Bond Issue; a possible $10 million for the Parks Bond Issue and the post closure cost of the landfill, estimated in June 2006, to be approximately $6.9 million. Also affecting the FY 07 -08 budget, the Government Accounting Standards Board has established new guidelines that require governments to account for their Other Post Employment Benefit obligations. Staff will work with a consultant to help develop a mitigation strategy for funding Other Post Employment Benefits with the County's liability estimated to be $3,927,297. BUDGET ISSUES FOR FY 07-08 Budget Director Cam Griffin presented the following anticipated major changes between FY 06-07 andFY 07 -08: Expenditures . A number of positions have been requested by County Departments to provide increased service delivery and to staff bond funded facilities. . Estimated increase in debt service of $4. 5 million related to increased debt service for the Schools and Cape Fear Community College. . Estimated increase in debt service of $700,000 related to the Parks Bonds. . Estimated that in addition to increased funding for debt service, the Schools will require funding for annual salary increases to match state raises for locally funded positions, opening of Anderson Elementary as a new school, and potentially additional funding for two magnet schools if grant funding is not available. . An increase of $1.5 million is estimated for Cape Fear Community College for additional downtown classroom space. . Estimated that County cost of Medicaid will remain the same as the FY 06-07 Adopted Amount. . Estimated increase related to MeritIMarket and increase in Health Insurance and Liability Insurance. It is too early to formulate an accurate estimate. Revenues . A revenue neutral tax rate in the General Fund will generate an increase of$4.9 million or 3.31 %. . Estimated increase in sales tax will generate $2.5 million. . Currently it is estimated there will be a combined decrease of $1.3 million in Fund Balance Appropriated and Transfers into the General Fund. Maior Issues to Impact FY 07-08 Budl!et bv Department . Health Department . Health Department staff feels the need for increased security at the Health Department for the safety of clients and staff. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION OF FEBRUARY 9-10, 2007 BOOK 31 PAGE 34 . Additional space for staff and storage. . Additional 4.5 positions. . Parks . Six additional staff. . Three additional vehicles. . Additional equipment for projects funded by Parks bond money. . Additional utilities due to projects funded by bond funds. . Flemington Soccer Complex. . Department of Social Services . Seven Social Workers for Child Protective Services. . Two Social Workers for Adult Services. . One Contracted Attorney. . Need for Space. . Day Care Services. . Fire Service District . Murrayville Station - construction will take place in FY 07 -08. . Additional Positions: . Nine for Murrayville . Six for Porters Neck . Three for Wrightsboro . Aerial Truck - to be put into service at Ogden Fire Station - approximately $1 million. . Property Management . Two custodians. . One Electrician/Generator Specialist. . One Maintenance Assistant. . Change Smoke Evacuation System at the Jail-$192,000. . Upgrade lighting system in Public Service Area-$150,000. . Replacement of Boilers and Chillers (Cape Fear Museum and Old Court House)-$170,000. . Sheriff's Office - under review. . Planning . Three new positions. . Cape Fear Community College . Parking deck and cosmetology building are scheduled for completion in February of 2008. Additional operating cost should be less than $100,000. . Additional downtown classroom space for CFCC approved by the Commissioners in &ptrnhrc:f 2005 - $2.5 million. At this time it is estimated that $1 million to $1.5 million will be requiredinFY07-08 . Schools - Preliminary Projection . Annual salary increases to match state raises for locally funded positions. . Opening of Anderson Elementary as a new school (Carolina Beach students will return to their renovated school in FY07 -08.) . Additional funding for two new magnet schools. (Grant funding may offset some of the cost, h will not know until July 2007.) . Water and Sewer . Increase water treatment charges from City of Wilmington . Increased capital . Water and Sewer Consolidation . Additional Requests . Funding for Thalian Hall Renovation - $1,000,000. . Communities in Schools - $50,000. . Adjustment of 800 MHz radios replacement schedule. . Cameron Art Museum. . Pedestrian Art Downtown - Public Sculptures. EXPLANATION OF REVENUE NEUTRAL Budget Director Griffin reported that according to N. C. G. S. 159-11, the revenue-neutral property tax rate is the rate that is estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced for the next fiscal year by the current tax rate if no reappraisal had occurred. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION OF FEBRUARY 9-10, 2007 BOOK 31 PAGE 35 T ax Director Bob Glasgow presented an overview of the tax revaluations that have recently been completed in New Hanover County. ECONOMIC INDICTATORS PUBLICATION Budget Director Griffin presented for the Board's review, The New Hanover County Economic Indicators, stating that the publication is intended as a brief overview of key factors in the County's economy but is not intended to be all inclusive and that the report will be prepared on a quarterly basis. NCACC LEGISLATIVE GOALS Budget Director Cam Griffin reported on the following North Carolina Association of County Commissioners Legislative Goals for 2007 - 2008: . Medicaid Relief - seek permanent Medicaid relief for counties. . School Construction - support legislation to provide state assistance to meet school construction through a statewide bond referendum and/or through authority for counties to raise additional revenues. . Revenue Options - seek legislation to allow all counties to enact any or all of several revenue options from among those that have already been authorized for any other county, including local option sales taxes, impact taxes and real estate transfer taxes. CAPITAL IMPROVEMENT PROJECTS REQUESTED Budget Director Griffin reported that County departments have submitted the following capital improvement projects for FY 07 -08 and future years noting that the costs are only estimates and will not be refined until the projects are in the recommended stage of the budget cycle. She presented the following projects: Cooperative Extension The widening of Bradley Drive to include two lanes onto Oleander Drive and one lane coming into Bradley Drive at an estimated cost of $500,000. Environmental Manal!ement Landfill Operations: . Construction and closure oflandfill cells for - $1,000,000 . Purchase of dozer - $600,000 . Permitting of adjacent landfill property for landfill cell construction - $100,000 . Landfill weigh master building - $100,000 . Household hazardous waste building - $100,000 . Landfill gaslleachate heater project Waste-To-Energy Facility (WASTEC): . Rebuild west crane bridge and trolley gear reducers - $150,000 . Replacement of refractories - $350,000 . Replace boiler waterwall tubes - $500,000 . Refurbish baghouse modules - $150,000 . Up grade existing fire alarm system - $17 5,000 . Purchase offront end loader - $130,000 Fire Services . Murrayville Fire Station -$3.5 million . Vehicle maintenance program - $120,000 . Aerial fire truck - $1 million Juvenile Dav Treatment Center . Expansion of existing facility - additional information on this request will be forthcoming when a Five Year Plan is developed and presented to the Commissioners. Librarv . Northwest Regional Library - FY 10-11 at an estimated cost of $4.0 million . Equipment and furnishings if the Town of Carolina Beach builds a new 5,000 square foot library - FY 08-09 $200,000 . South Regional Branch Library - $4 million; $500,000 in bond funds; $1.2 million from sale of Myrtle Grove property . Main library basement renovation - FY 12-13 at an estimated cost of $1.5 million Museum . Ten- Year Exhibition Plan: o Phase II: Create an Interpretive Core in the underutilized stairllobby areas and revise the Discovery Gallery at an estimated cost of $190,000. o Phase III: As a result of damage to the downstairs Waves & Currents exhibits, more extensive renovations are required at an estimated cost of $750,000. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION OF FEBRUARY 9-10, 2007 BOOK 31 PAGE 36 o Phase IV: Originally, this phase called for the addition of a new two-story wing in the courtyard at an estimated cost of$3 million. If the Facility Master Plan project is approved, then Phase IV will not be needed. . Facility Master Plan: o In March 2006, a new Facility Master Plan was conceptually approved. The 2006 estimated cost to implement is in the amount of$9.7 million. Parks . Northern Regional Park - The County will pursue a parks/school complex similar to Veterans Park. The County will be responsible for funding the Parks' portion of the complex. . Veterans Park - funding for Phase IV was included in the Parks Bond in the amount of$2.5 million. . Ogden Park Community Building and Tennis Courts - funding in the amount of $500,000 for construction of a community building at Ogden Park was included in the Parks Bond. Revenues will be raised through rental fees that cover the annual cost of maintaining the building. Estimated annual operating costs would include $3,600 for utilities and $2,000 for cleaning materials and supplies. Overtime pay would be required for custodial staff following scheduled use of the building. . Wrightsboro Park - funds were included in the Parks Bond to develop the park at an estimated cost of$500,000. Future budget impacts are estimated at $5,000 per year for utilities and maintenance. . Battle Park - funds were included in the Parks Bond to develop the park with the cost estimated to be $1 million. The property will be developed as a passive natural area with a community building, trails, restrooms, picnic shelter, parking and limited utilities. . Arrowhead Park - the Parks Bond included $1 million for the renovation that will include replacement of restrooms, picnic facilities, playground, multi-purpose athletic field and tennis courts, and the addition of a disc golf course. . Monterey Heights Park and Parkwood Recreation Area - the Parks Bond included $1 million for the renovation of these two facilities. These neighborhood parks will be renovated at a cost of$25,000 and $500,000, respectively. . Water Access Projects - the Parks Bond included $1 million for the addition of a minimum of at least four water access sites, preferable on properties already owned by the County. . Smith Creek Park - in March 2007, the excavation of the pond at this site will be completed. At that time, the revenues from the sale of the excavated sand will have generated approximately $600,000. Once excavation is completed, plans for the park will be developed. The site will be turned over to the County after reclamation by the contractor is complete. This is anticipated to take place by September 2007. The cost to construct the park will not be known until those plans are completed. The revenues generated, plus matching grant funds, will be sufficient to construct the park at no cost to the County. Maintenance and operating costs are not known at the present time. . Flemington Soccer Complex - the Cape F ear Soccer Association is developing an eight-field soccer facility on half ofthe 60-acre Flemington landfill site. The County paid $150,000 toward the construction ofthis project. CFSA has requested that the City and County take over the maintenance of the project. The City and County will share equally in the annual maintenance costs estimated at $65,000 each. One time maintenance equipment costs will be shared by the City and County and are estimated at $100,000 each. Water and Sewer District Fund No Water and Sewer District projects are listed due to the proposed consolidation with the City of Wilmington. Social Services Buildin!! The Department of Social Services is in the process of obtaining cost estimates for twenty cubicles and carpeting. Parkin!! Deck Finance is working with Property Management to obtain cost estimates for the installation of security cameras in the parking deck; estimated cost is $100,000. ACCOMPLISHMENTS TO DATE FOR FY 07 Budget Director Griffin highlighted accomplishments to date for FY 07: . Final relocation of Administration Offices to the Government Center . New County web site . Customer Service initiative implemented . Vehicle replacement program implemented . $35.5 million bond referendum approved for parks, library and Cape Fear Museum expansion . County maintained bond ratings of Aa2 and AA . The Budget and Finance departments have received awards . Sheriff's Crime Scene Investigation building completed . All volunteer fire districts completed insurance re-rating resulting in allowance of reduction in homeowner's insurance costs . Purchased land for new fire station in Murrayville area . Social Services received a three year grant to expand supportive services for Work First clients to increase the percentage of clients participating in federally approved work activities . A mobile dental unit program was implemented to improve dental health of school age children In closing, Budget Director Griffin reported that there is a list of departmental accomplishments for the Board's review in their budget notebook. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION OF FEBRUARY 9-10, 2007 BOOK 31 PAGE 37 COUNTYWIDE GOALS Budget Director Griffin presented the following countywide goals: . Provide a safe community for all New Hanover County citizens . Continue investing in technology for citizens to easily and efficiently conduct County business . Protect the environment and the quality oflife enjoyed by New Hanover County citizens . Ensure the health and welfare of all New Hanover County citizens . Ensure equality for all New Hanover County Citizens . Provide prompt, courteous and professional services to the citizens of New Hanover County . Provide for the educational, cultural and recreational needs of the community . Ensure the financial stability and legal protection of the County . Promote sound economic growth PROPOSED BUDGET CALENDAR FOR FY 07-08 Budget Director Griffin presented the following proposed budget calendar: . May 3, 2007 - Budget to the Board of County Commissioners (informally) . May 7, 2007 - County Manager presents recommended budget at Board meeting . May 21, 2007 - Public Hearing on budget . June 4, 2007 - Board adopt FY 07 -08 budget In closing, Budget Director Cam Griffin stated that staff looks forward to working with the Commissioners during the remainder of the budget process and requested that she be notified of any specific information that would assist in that process. BREAK: Chairman Caster called for a break from 2:25 p.rn. until 2:50 p.rn. PRESENTATION AND DISCUSSION OF CRITICAL ISSUES Budget Director Griffin reported that the following critical issues list was reviewed by the Board at their December 18, 2006 meeting. The Board held discussion and a question and answer period on each of the following critical issues and recommendations: . Detention Center Overcrowding - short term and long term solutions to provide space . Northeast Interceptor moratorium . Water and sewer consolidation between New Hanover County and the City of Wilmington . Funding of beach nourishment, inlet dredging and the Atlantic Intracoastal Waterway dredging in lieu of Federal funding . Environmental Management - Landfill . Environmental Management - Recycling BUDGET WORK SESSION RECESSED UNTIL FEBRUARY 10,2007 Chairman Casterrecessed the Budget Work Session meeting ofF ebruary 9, 2007, to be continued on February 10, 2007, at 8:30 a.rn. in Conference Room 601 at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Chairman Caster recessed the meeting at 5: 10 p.rn. Respectfully submitted, Sheila 1. Schult Clerk to the Board NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION OF FEBRUARY 9-10, 2007 BOOK 31 PAGE 38 ASSEMBLY The New Hanover County Board of Commissioners continued the Budget Work Session of Friday, February 9, 2007, on Saturday, February 10,2007, at 8:50 a.rn. in Conference Room 601 at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present were: Chairman William A. Caster; Vice-Chairman Robert G. Greer; Commissioner Ted Davis, Jr.; Commissioner William A. Kopp, Jr.; Commissioner Nancy H. Pritchett; County Manager Bruce T. Shell; County Attorney Wanda M. Copley and Clerk to the Board Sheila 1. Schult. Others present were: Budget Director Cam Griffin; Finance Director Avril M. Pinder; Assistant County Manager Andre' Mallette; Assistant County Manager Patricia A. Melvin; Assistant County Manager Dave Weaver; Planning Director Chris 0 'Keefe; Deputy County Attorney Kemp Burpeau; County Engineer Greg Thompson and Environmental Management Director John Hubbard. Chairman Caster called the meeting to order and requested the Board continue their discussion on Critical Issues. CRITICAL ISSUES (CONTINUED) The Board held discussion and a question and answer period on each of the following critical issues and recommendations: . Environmental Management - WAS TEC . Enhance Community Appearance - Litter Control . Water and Sewer Expansion along US Highway 421 Corridor . Drainage . Strategies for Improving Communications with other Governmental Units . Water Quality . Traffic . Sky Bridge ADJOURNMENT Hearing no further comments, Chairman Caster adjourned the meeting at 11 :05 a.rn. Respectfully submitted, Sheila 1. Schult Clerk to the Board