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1996-01-18 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 213 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Retreat on Thursday, January 18, 1996, at 8:30 A.M. in the Blockade Runner Resort Hotel, Wrightsville Beach, North Carolina. Members present were: Commissioners Sandra Barone; William A. Caster; William E. Sisson, Jr.; vice-Chairman E. L. Mathews, Jr.; Chairman Robert G. Greer; County Manager, Allen 0' Neal; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie F. Harrell. Chairman Greer called the meeting to order. PRESENTATION OF DEMOGRAPHIC DATA FOR NEW HANOVER COUNTY County Manager O'Neal presented charts reflecting the growth in population, per capita income, construction activity, the number of school students, and retail activity from 1990-1995. Charts were presented on the taxable property assessed value, the growth in the general fund balance, and the increase in County funding for school expenditures and government expenditures during the past five years. Discussion was held on the tremendous growth in development which has created a demand for new schools, water, sewer, and other services. From 1990 through 1995, general government increased by 26.4% (which includes debt service of 3.97% and non-departmental items); human services increased by 48.9%; public safety increased by 35.9%; economic and physical development increased by 13.1%; cultural and recreation increased by 31.6%; and education increased by 32%. Finance Director, Bruce Shell, reported the figures ln the charts were presented to show the growth in terms of total needs, not in County costs. He reported he would be glad to prepare a report on the net costs compared to the growth in the fund balance to provide the Board with a better overview of the financial posi tion of the County. He reported the highest percentage increase in the divisions of government was 48.9% in human services over a period of five years. After discussion of the tremendous increase in human services due to state and federal mandates, Commissioner Sisson requested a report showing a breakdown reflecting the increases due to entitlement programs and the growth in population. County Manager O'Neal responded that a report reflecting these figures would be prepared and forwarded to the Board. Discussion was held on Certificates of Participation (COPS) financing. Finance Director Shell noted that the flexible interest rate had proven to be very beneficial to the County as of this date. When preparing the budget, a fixed interest rate of 5.6% is used on a long-term basis; however, the County has been paying only 3.5% which has provided an opportunity to build a cushion if interest rates should increase. Chairman Greer requested the Finance Director to forward a quarterly or bi-annual report on the interest rate being received by the County so the Board will be aware of how this method of financing is working. Finance Director Shell responded that a report would be prepared and forwarded to the Board. Discussion was held on the impact of annexation on the sales tax. Budget Director, Cam Griffin, advised that with annexation the sales tax will decrease with the same population having to be served with less revenue. She reported Staff would continue to monitor the impact of annexation on the sales tax as each area lS annexed. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 214 Discussion was held on the change in the distribution formula of the Room Occupancy Tax from 75% beach renourishment/25% tourism to 60% beach renourishment/40% tourism. Commissioner Caster inquired as to the amount of funds being placed in the beach renourishment account. Finance Director Shell reported the Convention & Visitors Bureau (CVB) receives 100% of the monies collected from the 40% of the Room Occupancy Tax designated for tourism. This has increased the CVB budget from $400,000 to over $800,000 per year. The beach renourishment fund is still in excess of $9 million; however, this fund is growing at 7% instead of 8% under the new distribution formula. DISCUSSION OF COOPERATIVE AGREEMENTS WITH THE CITY OF WILMINGTON County Manager O'Neal reported a memorandum had been received from the City Manager expressing an interest in negotiating cooperative agreements in the following areas: Utilities: The County is working with the City on the 23rd Street site for construction of the Northside Wastewater Treatment Plant. Currently, the City has a remaining capacity in its existing Northside Wastewater Treatment Plant and has requested the County to consider an interlocal agreement whereby the County and City would fully utilize this capacity before constructing another Northside Wastewater Treatment Plant. This interlocal agreement would be for a period of five years after which the City and County would collectively construct a Northside Wastewater Treatment Plant. County Manager O'Neal asked if the Board would like for Staff to hold discussions with the City Staff including the Chairman and Vice-Chairman of the Water & Sewer District; or would the Board prefer for the County to explore this possibility when an interlocal agreement is being negotiated? He emphasized the importance of protecting the County's interest to guarantee that adequate wastewater capacity will be available to meet future growth needs in the unincorporated County. County Engineer, Wyatt Blanchard, reported the current NPDES permit will expire July 1, 1996, with renewal for an additional five years. The new permit will not require the City to upgrade its plant; therefore, this would be an excellent time for an interlocal agreement to be negotiated. Discussion was held on the use of the City's Southside Wastewater Treatment Plant at a contracted cost per year. It was concluded that the agreement has been beneficial to both the City and County. Chairman Greer stated, in his opinion, an interlocal agreement with shared costs and future protection for both the City and County would be the appropriate way to address water and sewer. He stressed the importance of moving forward with a negotiated agreement within the next three months because of the need to begin construction of the Northside Wastewater Treatment Plant. County Engineer Blanchard advised that the County had two options: (1) negotiate an interlocal agreement to fully use the capacity of the City's Northside Wastewater Treatment Plant with a joint expansion and upgrade of this plant; or (2) construct the Northside Wastewater Treatment Plant on the site as proposed with demolition of the City's plant. Also, a letter has been received from the State assuring the County that the NPDES discharge permit into the Cape Fear River will be renewed. Commissioner Sisson spoke in favor of moving forward with an inter local agreement which will address the concerns expressed by the Airport Commission. He stated the City and County should decide during this process whether an organization should be established to oversee the entire utilities operation, or should interlocal agreements be negotiated between the City and County. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 215 County Manager O'Neal reported if the County moves forward with an interlocal agreement, he would use this agreement as the foundation for future discussions regarding the establishment of an organization to oversee the operation of utilities. Consensus: After discussion of time constraints and the need to construct the Northside Wastewater Treatment Plant, it was the consensus of the Board to direct Staff to move forward with preparing an interlocal agreement for full use of the existing capacity in the City's Northside Wastewater Treatment Plant and proceed immediately with a joint effort to construct a Northside Wastewater Treatment Plant. Fire Service: The City has accepted the Board's offer to jointly examine the possibility of combining the Fire Service. The City Council designated Councilman Frank Conlon, Councilman Charlie Rivenbark, and Fire Chief, Sam Hill, to serve on an Advisory Committee to study merging the Fire Service. The City has requested the Board to designate two Commissioners to serve on the Committee. Chairman Greer recommended including the County Fire Administrator as a member of the Advisory Committee when this position is filled. Also, he suggested waiting until the position was filled before scheduling the first meeting of the committee. Consensus: After further discussion, it was the consensus of the Board to move forward with examining the possibility of merging the Ci ty and County Fire Service. Commissioner Sisson and Vice- Chairman Mathews were appointed to serve on the Advisory Committee as well as the new County Fire Administrator once the position is filled. Merging Planning DeDartments: The City Council has indicated a desire to re-visit merging the Planning Departments when a Unified Development Ordinance has been prepared. Assistant County Manager, Dave Weaver, advised that the purpose of preparing a Unified Development Ordinance was to create an ordinance that would have the same basic standards, such as drainage requirements. He informed the Board that a combined Planning Department could function without a Unified Development Ordinance; however, other differences would have to be addressed. For example, the County Planning Board performs subdivision reviews; whereas, the City Engineering Department administers subdivision reviews. Also, the County Planning Department administers Community Development Block Grant housing proj ects; whereas, Wilmington Housing Finance and Development, Inc. administers this program for the City. Discussion was held on whether there would be one or two Planning Boards. County Manager O'Neal advised that one Planning Board could be established with representation from the various jurisdictions within the County. Under any situation, whether separate boards or combined, the members of the Planning Board would rely heavily on the expertise of the Planning Staff. Consensus: After further discussion, it was the consensus of the Board to concur with the City and reconsider merging the Planning Departments after development and completion of the Unified Development Ordinance. Establishment of a Develooment Center: Discussion was held on establishing a joint City/County Development Center to house all development-related departments or functions to provide "one-stop permitting" for contractors, developers, architects, and engineers. This type of center would provide better planning for future growth and transportation needs as well as assist with addressing other areas of joint concern. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 216 Further discussion was held on the cost of establishing a one- stop permitting center. Assistant County Manager Weaver advised that a building would have to be found to house the associated personnel, and a computer networking program would have to be developed. vice-Chairman Mathews commented on the convenience of a Development Center to the public and recommended exploring this idea. Commissioner Barone commented on Brunswick County receiving a State award for this type of permitting center, and she suggested a review of this plan during the process of studying this issue. Consensus: After further discussion, it was the consensus of the Board for the County Staff to work with the City Staff in preparing a proposal to be considered for establishing a joint Development Center by October 1, 1996. Discussion was held on movlng zoning enforcement under the Planning Department instead of the Inspections Department. Commissioner Sisson reported this was the most common method used in other jurisdictions. County Manager 0' Neal explained that placing zoning enforcement under the Inspections Department provided an audit of the system, which in his opinion, had worked exceptionally well in the community. He reported if the Board desires to move zoning enforcement under the Planning Department, Staff will prepare a proposal. vice-Chairman Mathews commented on public relations and reported the County needs to hire a qualified, courteous, well informed person to answer phones and direct callers to the correct departments. He reported on the numerous complaints received from the public about being transferred from one department to another with no satisfactory answer. County Manager O'Neal responded that Staff would reVlew this matter. Interlocal Agreement With the City of Wilmington for the provision of Recreation Services in the UnincorDorated County: The City is interested in developing an interlocal agreement for the City to provide recreation services on behalf of the County in the unincorporated area. Also, the City Staff would prepare an inventory of existing parks and identify areas in need of park facilities; however, the City is not interested in combining the management of park facilities at this time. Chairman Greer reported he would not be interested ln the County paying the City to provide recreation services ln the unincorporated County. Commissioner Sisson reported he felt the City was interested in offering their services to expand current programs into certain areas of the County. He stated an interlocal agreement of this type could save the County money by not having to hire additional personnel to implement these programs in the future. Commissioner Barone objected to the County becoming involved in the recreation business because of the cost involved with the provision of recreational programs. Chairman Greer agreed with Commissioner Barone. Consensus: After further discussion, it was the consensus of the Board to inform the City that the County was not interested ln developing an interlocal agreement for the prOV1Slon of recreational services by the City. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 217 Chairman Greer reported he felt the City needed financial assistance for many of the items being requested. He expressed concern for cost-shifting and stressed the importance of both the City Council and Board of County Commissioners moving forward with combining services only if the combined service will be of benefit to the citizens and taxpayers. Legion Stadium: The City is interested in developing a long-term arrangement for the use of Legion Stadium by the City, New Hanover Schools, the County, and other interested parties. The City Council appointed Councilman Hamilton Hicks and Councilman Harper Peterson to serve on a committee with County and School Officials to consider various options for the use of Legion Stadium. Discussion was held on the poor condition of the parking lot and athletic field at Legion Stadium. Chairman Greer recommended charging the spectators a fee that will be earmarked for maintenance of the stadium. Commissioner Barone advised that she had received numerous calls from parents who were not opposed to paying a $1.00 parking fee. Commissioner Sisson expressed concern for the situation that developed between the City and New Hanover County School System last year without any of the problems being resolved. Commissioner Barone commented on Legion Stadium being a community facility and stated she would not be opposed to the County contributing funds to repair the facility. Consensus: After further discussion, it was the consensus of the Board to designate Commissioner Barone and Commissioner Caster to serve on a Committee to develop a long-term arrangement for the use of Legion Stadium by the City, County, Board of Education and other appropriate entities. DISCUSSION OF HUMAN SERVICES TRANSPORTATION SYSTEM Assistant to the County Manager, Ms. Pat Melvin, reported the Castle Hayne/Wrightsboro and Rock Hill route had been most successful. Currently, the Transit 2001 Study is underway, and it is hoped that State dedicated funding will be provided for human services public transportation systems. The County's transportation system has grown from 189,000 units to an estimated 300,000 units during the next fiscal year. It is felt that New Hanover County's Human Services Transportation System has been operating in an efficient and cost-effective manner compared to other systems throughout the State. Ms. Melvin advised that the Human Services Transportation System was feeding into the City's Transit System. Currently, there are opportunities in the Castle Hayne area for a public/private venture with General Electric (GE) to provide transportation service to GE employees, such as a route for employees going to work at 7: 00 A.M. As the system grows, it appears that funding will be available to negotiate public-private ventures. County Manager 0' Neal noted that New Hanover County had provided an incredible level of service with a minimal investment by the County. Discussion was held on the importance of informing the public about the system and providing some way to better identify the mlnl-vans. Ms. Melvin responded that radio stations were being used to better inform the public. Also, a mini-bus will be ordered next year, which should assist with identification of the vehicles. Chairman Greer, on behalf of the Board, expressed appreciation to Ms. Melvin for the success of the system. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 218 Discussion of Merging the City and County Garages: Assistant County Manager Weaver advised there was a possibility of combining vehicle management with the City. By utilizing the mechanics at the City and County garages, more mechanics would be available to perform the work, and the City's computer system could be used to provide time management records and inventory reports. Also, merging the garages would alleviate the need for the County to upgrade the computer system at the County Garage. Chairman Greer advised that a bigger system was not always better. He reported the current system was working well, particularly with emergency repairs. Assistant County Manager Weaver reported with continued growth, another mechanic will be needed and the computer system will have to be upgraded to keep proper records and inventory of parts. Commissioner Caster asked if contracting out the serVlce would be an alternative? Assistant County Manager Weaver reported approximately two years ago Staff reviewed contracting with a private company and found that after downsizing, the County could perform the work at about the same cost. Also, when emergencies occur, the County can call in mechanics on weekends to make the necessary repairs. Under a contracted service, this type of emergency repair service would not be provided. Chairman Greer inquired as to whether a record was kept on the maintenance and repair of each vehicle? Assistant County Manager Weaver replied that a paper record was kept; however, with continued growth in this department, a computer upgrade would be required. DISCUSSION OF ANNEXATION AND ITS IMPACT ON THE FY 1996-97 BUDGET Budget Director, Cam Griffin, reported there was a slight possibility of annexation occurring on February 29, 1996; however, it would probably occur on July 1, 1996. The impact of annexation on the sales tax will create no growth in this revenue source for FY 1996-97. County Manager O'Neal reported with annexation of the entire 27 square miles, the sales tax for the City will increase by $2.4 million. The County and other municipalities will receive the following decreases in the sales tax: New Hanover County Town of Wrightsville Beach Town of Carolina Beach Town of Kure Beach $2,035,000 $ 200,000 $ 90,000 $ 85,000 Budget Director Griffin reported the impact of annexation will be monitored by Staff and reports will be made to the Board as the areas are annexed. Commissioner Sisson requested direction from the Board as to how the Fire Commission should handle budget requests from the Volunteer Fire Departments that will be annexed by the City. He advised that one Volunteer Fire Department had already executed a contract with the City without informing the Fire Commission. He presented the following items that will have to be considered during the annexation process: (1) Reduce the budget by the percentage of the response district that is removed by annexation. (2) The Volunteer Fire Departments will have to obtain a per call amount from the City based on the current per call volume for NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 219 the pieces of County financed equipment that are being used to respond to calls within the City. (3) Continue to budget funds for the Volunteer Fire Departments without taking annexation into consideration. Commissioner Sisson advised that during the current fiscal year the amount charged to the Volunteer Fire Departments by the City to cover calls in the annexed areas will have to be refunded by the County to the City because the Fire District tax has already been collected from the citizens living in the annexed areas. In order to avoid double taxation, the County will have to reimburse the City. During FY 1996-97, the Fire District will be reduced by the amount of land in the annexed areas and no payment will be due to the City. Chairman Greer recommended reducing the current budgets of the Volunteer Fire Departments by the amount that will be due the City ln the annexed areas. Commissioner Sisson advised that recent equipment purchases by the Ogden and Seagate Volunteer Fire Departments had been paid from Fire District funds; therefore, when these areas are annexed, the City will not be offsetting the Fire District's investment in the equipment. Unfortunately, the City did not feel it was necessary to discuss this matter with the Fire Commission before contracting with the Seagate Volunteer Fire Department. The City was not aware that the revenue stream was not based on each Volunteer Fire Department, but on the needs of each department on an annual basis. As of this date, Seagate will be totally eliminated as a fire response district. The Winter Park Volunteer Fire Department will lose approximately 40% of its fire response area, the Ogden Volunteer Fire Department will lose 20%, and the Myrtle Grove Volunteer Fire Department will lose 25%. Discussion was held on the manner in which fire equipment was addressed under the current contracts with the Volunteer Fire Departments. Commissioner Sisson advised that if a Fire District is eliminated, such as Seagate, the contract states that New Hanover County can reclaim the equipment paid for and financed since 1993. Consensus: After discussion, it was the consensus of the Board to deduct the amount charged by the City from the current budget of the Volunteer Fire Departments. For FY 1996-97, the Fire Commission should prepare budget requests according to the loss of fire response areas in each Volunteer Fire Department because of annexation. Chairman Greer stated, in his opinion, the City and County should move forward with merging the fire service. DISCUSSION OF PORTERS NECK FIRE SUBSTATION County Attorney Copley reported a call was received from Mr. Tom Morgan, the Attorney representing the Ogden Volunteer Fire Department, notifying the County that the Ogden Volunteer Fire Department was not interested in receiving the $60,000 for construction of the Porters Neck Fire Substation if the County required joint ownership of the property. She advised that Mr. Morgan was requested to forward a letter to the Board informing them of this decision; however, no written response had been received. County Attorney Copley requested direction from the Board. Chairman Greer reported he had heard on the radio that if the County did not provide the funding, the Ogden Volunteer Fire Department would proceed with constructing the Fire Substation. He stated, personally, he would not have a problem with the building NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 220 being constructed by the fire department, particularly Slnce the County would save $60,000. Commissioner Caster asked if a Deed of Trust was needed? County Attorney Copley explained that if the Ogden Volunteer Fire Department refused to allow for joint ownership of the property, the County could appropriate $60,000 for construction of the building provided that a Deed of Trust was drawn that would state, "if the Ogden Volunteer Fire Department ceases to have a contract with the County for the provision of fire service, the $60,000 would have to be returned." If the County does not provide funding for the Fire Substation, there would be no contract. Discussion was held on the ownership of equipment purchased from Fire District funds. Commissioner Sisson advised that the current contract with each Volunteer Fire Department states that if a Volunteer Fire Department is disbanded, ceases to have a fire response district wi thin the County, or the County ceases to contract with a Volunteer Fire Department for fire protection service, the Volunteer Fire Department must return any equipment purchased from Fire District funds. If the title of the equipment is in the name of the Volunteer Fire Department, a court procedure would be required for return of the equipment if a Volunteer Fire Department refused to return the equipment to the County. County Attorney Copley advised that the current contract requires return of any purchase over $5,000 since 1993. Further discussion was held on the title of equipment purchased with Fire District funds not being jointly owned by the County. Chairman Greer stated he thought any purchase exceeding $5,000 was jointly owned by the County. Commissioner Barone responded that the County tried to negotiate a contract for joint-ownership of any purchases over $5,000; however, the Volunteer Fire Departments refused to sign the contracts. Chairman Greer reported that one way to resolve a conflict of this type would be for the County to refuse to contract with the Ogden Volunteer Fire Department. This action would automatically stop any funding received from the Fire Service District. Discussion was held on the inability of the County to perform audi ts of the Volunteer Fire Departments because of State Law. Commissioner Caster asked if the Fire Commission had been helpful to the Budget Director in preparing budget recommendations? Deputy County Manager, Andrew J. Atkinson, reported when the Fire District was established, the intent of the County was to pay for fire service needs within each fire district. Before the Fire District was established, the Finance and Budget Departments could not determine the needs of Volunteer Fire Departments. Once the Fire District was established into seven districts, all budget requests had to be submitted to the Fire Commission, who in return review the requests and make funding recommendations to the Board of County Commissioners. He reported this procedure had been beneficial in trying to determine the needs; however, frequently the Budget Director does not receive the information requested when reviewing budgets. Commissioner Sisson advised that personalities had been removed from the budgeting process through utilization of the Fire Commission. He informed the Board that if a Volunteer Fire Department properly justifies its need for a piece of equipment, the request was approved by the Fire Commission. A lengthy discussion was held on the need for the County to have more accountability of how Fire District funds are expended by NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 221 the Volunteer Fire Departments. Vice-Chairman Mathews asked what could be done to require audits from the Volunteer Fire Departments in order for the County to know exactly how funds are being expended? County Attorney Copley responded the County could approach the local legislators about an amendment to the State Legislation. Chairman Greer, again, reiterated that the County could refuse to contract with a Volunteer Fire Department when a conflict area cannot be resolved. He, also, advised that the City was interested in working with the County to consolidate the fire service for the entire County. County Attorney Copley requested direction on the Porters Neck Fire Substation. She advised that a meeting was held with all parties involved, and the County agreed to fund $60,000 for construction of the Fire Substation; pay $17,500 for half-ownership of the property; enter into a mutual agreement to allow the County to place EMS personnel on the site; and require pre-approval by the County before co-signing a loan. At that meeting, it appeared that these conditions were satisfactory with the Ogden Volunteer Fire Department until a call was received from Attorney Morgan stating otherwise. Chairman Greer conditions, then the Department that New after June 30, 1996, stated if the Board has agreed to these County should inform the Ogden Volunteer Fire Hanover County will not renew its contract with no funding received after that date. Commissioner Caster noted that no official written notification has been received from the Ogden Volunteer Fire Department; therefore, this may not be the department's final response. After discussion of the proposed Fire Substation being discussed for the past two years, it was generally agreed that the Board would have to consider not renewing the contract with the Ogden Volunteer Fire Department if this problem has not been resolved by June 30, 1996. DISCUSSION OF SCHOOL NEEDS County Manager O'Neal advised that more information would be available about school needs as budget information is developed by the School Administrative Staff. Commissioner Sisson commented on the need to see figures that will bring the existing schools up to normal maintenance standards and reported he would like a list of these needs and the cost estimates. Budget Director Griffin advised that by late spring, the figures on the heating & air-conditioning and roof survey would be available. Once these figures are presented by the School Administrative Staff, the existing needs can be identified. Discussion was held on the number of new schools that will not open during the next fiscal year and the costs involved with staffing and maintaining new schools. Concern was expressed for the numerous State and Federal regulations that require new positions, overload the teachers with paperwork, and limit the size of classrooms creating a need for additional space. It was generally agreed that until some of these regulations are changed, the cost of schools will continue to increase. County Manager O'Neal advised that he would be glad to contact Mr. Bill Hance, the Assistant Superintendent of Schools, about furnishing estimated figures on the cost of opening a new school. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 222 A lengthy discussion was held on the possibility of merging school maintenance with the County Property Management Department and merging the School Garage with the County Garage. County Manager O'Neal cautioned the merging of these services under County departments because of the liability that could be incurred by the County. He pointed out that maintenance of school buses and school facilities were no-win situations. Discussion was held on the number of high-dollar items requested in the School Budget. Commissioner Sisson commented on having difficulty in understanding why so much emphasis was being placed on computer technology in the elementary schools when this technology would be outdated once the students reached the middle school level. He stated with the exorbitant cost of software, he felt computer courses should become an integral part of education in the high schools so that students joining the workforce or moving to higher levels of education would be better prepared to use the latest technology. Chairman Greer requested the Board to provide some form of direction to the Budget Director as to the amount of funding for New Hanover County Schools in FY 1996-97. He stated, personally, he could not support the $2 million funding request. Commissioner Sisson expressed concern for projecting a figure without a better breakdown and explanation of expenditures. He requested Staff to see if more details could be furnished on the expenditures that had been presented by the School Administrative Staff. County Manager 0' Neal replied that Assistant Superintendent of Schools, Bill Hance, had been most cooperative in trying to work with the County in providing figures on the operational costs. He agreed that more detailed information was needed and reported the Budget Director would be working with Mr. Hance to secure this information. Discussion was held on the lncrease ln the debt serVlce. Budget Director Griffin advised that the increase in the debt service for New Hanover County Schools between FY 1995-96 and FY 1996-97 will be $1,193,630, which represents $1.35 cents on the tax rate. The increase in the debt service for Cape Fear Community College will be $239,892. Chairman Greer reported it appears the County will be requested to appropriate $2.5 million for the schools and Cape Fear Community College in FY 1996-97. He requested Staff to provide figures reflecting routine and preventative maintenance for all existing schools as well as projected maintenance figures for the new schools. County Manager O'Neal responded that after the Budget Director meets with the Assistant Superintendent of Schools, a detailed report will be prepared on budget line items, the impact of state and federal regulations on school cost projections, and maintenance figures for existing and new schools. Discussion was held on the status of the Siemens Building. County Manager O'Neal reported he would contact the schools and forward a status report on this project. Discussion was held on cooperative agreements between New Hanover County and the schools for the use of athletic facilities and parks. County Manager O'Neal advised that the State of North Carolina does not provide funding for maintenance of the athletic fields or school facilities. He reported the County could become more involved with use and maintenance of the parks and athletic fields by transferring the funds now appropriated to the schools to the Parks Department. This action would allow for better control of maintaining the athletic fields; however, staffing in the Parks NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 223 Department would have to be increased. He requested direction from the Board. Consensus: After discussion of the need for athletic fields to be fully utilized on a year-around basis, it was the consensus of the Board to request the County Manager to prepare a draft recommendation for the joint use of one or two facilities on a trial basis. Discussion was held on the personnel positions funded by the County. Budget Director Griffin advised that New Hanover County provides funding in the amount of $1,200,000 for salaries and fringe benefits. Most of the positions are requested under the School's policy and are not funded by the State. A lengthy discussion was held on the lack of discipline in the schools, which has created many of the maintenance problems, particularly in the bathrooms. Commissioner Sisson recommended establishing a policy that would hold parents responsible for the destruction of school property. Chairman Greer agreed and requested the County Attorney to check into the legalities of creating such a policy. County Attorney Copley advised that she would contact the school attorney, Bill Hill, to see if some policy could be developed to allow the schools to expel children for discipline problems and hold parents responsible for payment of damage to school property. Once the information is received, a report will be prepared and forwarded to the Board. vice-Chairman Mathews commented on the periodic visits by the County Staff for inspection of maintenance at the schools and requested the County Manager to include him on the next visit. Discussion was held on maintenance personnel for Cape Fear Community College. Chairman Greer requested the County Manager to check into this matter and provide figures on these positions. WELFARE REFORM County Manager O'Neal advised there was no way to predict the type of federal legislation that will be enacted for Welfare Reform; however, it appears the reform will require more responsibility and management of the programs on the local level. Without any knowledge of federal Welfare Reform, it will be difficult to prepare the FY 1996-97 Budget for the Department of Social Services. Chairman Greer commented on the federal fiscal year ending September 30, 1995, and noted that a major concern for counties is the spending of budgeted funds for programs in the current year that may not receive federal reimbursement retro-active back to October 1, 1995, which could cause a funding shortfall for many local governments. He reported after serving on a state-wide Human Services Task Force studying the Welfare Reform issue, no determination has been made as to how federal funding will be cut. Many people are in favor of change but are very reluctant to change the system. Scare tactics are being used to frighten people into believing that no provisions will be made to care for children and other people in need of services. In his opinion, it has been proven that the current Welfare System is not working; therefore, changes must be made to control increasing costs of a program that is not meeting the needs of the people. Budget Director Griffin advised that the Department of Social Services was very closely monitoring its expenditure of funds. After further discussion of mandated programs, it was agreed that all elected officials should challenge the system to change NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 224 State and Federal mandated regulations that have created tremendous costs to local governments. DISCUSSION OF NEW HANOVER COUNTY WATER AND SEWER DISTRICT County Manager O'Neal expressed concern for the lack of time spent during the budget process on the Water and Sewer District as well as the Environmental Management Department. He requested the Finance Director, Bruce Shell, to comment on the Water and Sewer District. Finance Director Shell presented the following charts: (1) Comparison of revenues and expenditures with the difference of expenditures over revenues covered by the transfer of the 1/2 cent sales tax. The revenues received are user fees and impact fees. The impact fees are placed in an escrow account to provide funding for capital projects. Currently, there is a balance of $5.1 million in the escrow fund. Both user fees and impact fees should continue to increase. Discussion was held on the sales tax. Chairman Greer asked what percentage of the 6% State sales tax was returned to the County? Finance Director Shell replied that 2% of the 6% sales tax is returned to the County with one-half of a percent designated to the schools and the remaining unrestricted one and one-half percent transferred to the general fund with one-half percent designated to the Water and Sewer District. Out of the budgeted $23 million received from the sales tax revenue, $14 million is placed in the general fund with the remaining $9 million being divided as follows: $4 million to the schools and $5 million to the Water and Sewer District. County Manager 0' Neal reminded the Commissioners that the sales tax receipts will be reduced once the City implements its annexation plan. Commissioner Sisson inquired as to what will happen when the City annexes an area now under the County's sewer system? Should the County give the system to the City for operation; or should the County operate the system? Assistant County Manager Weaver explained that the monthly user fee was to pay for maintenance and operation of the system; however, operation of the system had been less than the revenues received; therefore, it would not be beneficial to the County for the system to be given to the City. Also, the current user fee is 10% less than the fee projected under the original 201 Facilities Plan. The Board may wish to consider increasing this fee. On the other hand, it does not seem practical for two different entities to manage a sewer system within one annexed area. County Manager 0' Neal reported the County should consider creating some type of utility arrangement that will allow water and sewer to be operated under one entity to better serve the citizens and alleviate confusion about the various water and sewer systems. Commissioner Sisson advised that some of the Volunteer Fire Departments had been experiencing a problem with Mr. Dobo placing hydrants in the older areas. It appears that Mr. Dobo has hesitated to install the hydrants because he is negotiating with the City for purchase of the water systems. He reported only ten fire hydrants are involved, and he asked if Staff could assist in being sure the hydrants are installed, and if necessary, offer the use of County personnel to install the hydrants with reimbursement from the Fire District? NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 225 County Manager 0' Neal informed the Board that New Hanover County could not require a privately owned system to install the fire hydrants. Also, liability could be incurred by the County with the use of County personnel. Discussion was held on what will happen to the District's customers when the City annexes an area. Assistant County Manager Weaver replied that sewer customers will remain customers of the District unless the sewer system is given to the City. (2) A chart reflecting the Water & Sewer District Debt Service was presented. The debt service will gradually decrease from 1996 to 2005 and drop considerably in 2006. Discussion was held on the impact fees in the escrow account and the use of Certificates of Participation for financing the construction of the Northside Wastewater Treatment Plant, the Ogden Interceptor, and the NorthChase Interceptor at a projected cost of $19 million. Finance Director Shell reported the Board had decided to review the most attractive financing alternative once a site has been selected for the Northside Wastewater Treatment Plant and bids have been received. At this time, Staff will evaluate financing alternatives and decide if it would be more beneficial for the County to borrow $19 million for the project with the funds in the escrow account used to payoff the debt service, or pay down the money in the escrow account and then borrow the balance. Chairman Greer requested the Finance Director to inform the Board when the impact fees in the escrow account are used. Also, if an agreement is negotiated with the City, the County will still be required to construct the Ogden Interceptor at approximately four to five million dollars. (3) Miscellaneous Information on the Water and Sewer District: The following charts were presented: -Estimated taxable property assessed value, $4.1 million. -Estimated 1996-97 sewer user fee revenue, $5.1 million. -Estimated 1996-97 water user fee revenue, $437,000. -Estimated 1996-97 Customer Base, 20,500. (4) Water and Sewer District Fund Balance: The following figures were presented: Operating Fund: Fund Balance 6-30-95 Reserved for City capacity NWTP Fund Balance Available Less Priority List Remaining Fund Balance $4,906,747 (200,000) 4,706,747 (4,048,450) $ 658,297 The Operating Fund had an lncome of $990,701 in FY 1994-95. Escrow Fund (Impact Fees for Northside WWTP): Fund Balance 6-30-95 $4,443,904 $4,443,904 Fund Balance Available The remaining fund balance will be used for the Northside WWTP in order to reduce the amount of financing required. The following projects were listed: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 First Priority: Upgrade Hewlett's & Bradley Creek Pump Stations Water Line - Murrayville Road to NorthChase Northside Wastewater Treatment Plant (COPS) Ogden Interceptor (COPS) Kingsland Woods Timber Creek Force Main Leeward Lane Groundwater Study 1-40 Interchange NorthChase WWTP - Transfer flow to Northside WWTP Horndale Drive Motts Creek Project Ogden Water Tank NorthChase Interceptor (COPS) Wheel Estates Mobile Home Park Capacity Study for Southside WWTP SUBTOTAL Second Priority: 8" Force Main from Weatherwood Pump Station Bore across M.L.R. to Quailwoods (Completed) Greenville Trailer Park/Peiffer Avenue Outfall Upgrade Alford L.S. #40 Camelot Trailer Park Dogwood Trailer Park College View Trailer Park Abandon Between the Creek Lift Station Eagles Nest Whisper Creek Abandon Sun Court Lift Station Abandon Crosswinds Lift Station Iris Street Cedar Island Road up from Silva Terra Abandon existing Millbrook Lift Station SUBTOTAL Less COPS TOTAL BOOK 25 PAGE 226 $ 408,000 $ 200,000 $12,000,000 $ 5,000,000 $ 42,000 $ 50,000 $ 30,000 $ 120,000 $ 275,000 $ 100,000 $ 60,000 $ 1,600,000 $ 100,000 $ 2,000,000 $ 120,000 $ 15,000 $22,285,000 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 35,000 10,000 66,950 120,000 15,000 23,000 65,000 16,000 129,000 121,000 31,500 30,000 25,000 35,000 35,000 6,000 763,450 $23,048,450 (19,000,000) $ 4,048,450 Chairman Greer commented on the need of an additional position to assist the County Engineer in handling the volume of work. Assistant County Manager Weaver advised that a reorganization of the Water and Sewer Department was being prepared with a request for some new positions and reclassification of existing positions. He reported the reorganization process was late because the department was waiting to see if consolidation would occur. DISCUSSION OF ENVIRONMENTAL MANAGEMENT FUND County Manager O'Neal reported Congress had not dealt with flow control legislation; therefore, this is an unknown issue at the current time. As to the development of the Construction and Debris (C&D) facility, Staff has been directed to involve the private sector in the planning process. A proposal will be presented to the Board that will not include a MRF Facility. Commissioner Sisson stated he felt joint ventures could be negotiated to include the private sector without the County having complete control over the operation. Chairman Greer agreed. He stated rebar was an example of a material that needs to be removed from the incinerator because of the damage to the facility as well as damage to hauler trucks. A policy could be developed to prohibit rebar from coming to the incinerator except in containers, which will require the haulers to take the materials to the private sector for disposal of the product. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 227 Assistant County Manager Weaver in the past until a private hauler smaller boxes. At that time, the smaller boxes to remain competitive. therefore, it would be an ideal time containers. reported this was the policy came into the County with other haulers converted to This company has been sold; for the haulers to use large Chairman Greer, again, recommended adopting a policy that will prohibit rebar from the incinerator, which will allow the haulers to decide whether to use boxes or front-end loaders. Discussion was held on using Keys, Inc. in lieu of the City for processlng recyclable materials. Commissioner Caster recommended bidding out this process. It was generally agreed to request Staff to check into bidding out the job. The following charts were presented: (a) Revenue Comparisons from Tip Fees, Electrical & Steam Sales, and Transfers to the Environmental Management Fund from FY 1991 to 1995. (b) Expenditures Comparisons for the Landfill, WASTEC Facility, Administrative & Recycling and Environmental Debt Service from FY 1991 to 1995. (c) Environmental Management Total Expenditures from FY 1991 to 1995. (d) Environmental Management Tonnage from FY 1991 to 1995. (e) Environmental Management Debt Service. DISCUSSION OF EMERGENCY MEDICAL SERVICES County Attorney Copley reported the County has withheld the last two quarterly payments of $19,000 each to the Ogden-New Hanover Rescue Squad because the squad has not complied to the coverage schedule as outlined in the contract. The Legal Department has been contacted by the Ogden-New Hanover Rescue Squad expressing concern for withholding the payments since this condition was not stipulated in the contract. The question to be answered is whether the County should make a partial payment for the services provided. Commissioner Caster requested an explanation as to how the County determined that the contract obligations had not been fulfilled. County Manager 0' Neal reported the records prove that the schedule made by the Ogden-New Hanover Rescue Squad had not been fulfilled as outlined in the current contract. This non-compliance has occurred because there are not enough volunteers working during the hours of coverage needed by the County. Since this schedule has not been met for the past several years, he made the decision to withhold payments for the last two quarters. Discussion was held on the location of the two rescue squad facilities on Military Cut-Off Road and Carolina Beach Road. County Manager O'Neal reported these locations did not meet the needs of the County; therefore, the Board may wish to continue with the contractual arrangement with the Ogden-New Hanover Rescue Squad through the current year. During this period of time, Staff can investigate other arrangements. He pointed out that implementing 12-hour shifts in the Emergency Medical Services Department would resolve the problem because there would be no need for housing. County Attorney Copley reported if the County does not contract with the Ogden-New Hanover Rescue Squad, the County will have to implement 12-hour shifts or find new facilities. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 228 Consensus: After discussion, it was the consensus of the Board to release the quarterly payments to the Ogden-New Hanover Rescue Squad and inform them that unless the conditions of the contract are met, the contract will not be renewed at the beginning of Fiscal Year 1996-97. Staff was directed to investigate other alternatives. DISCUSSION OF CELLULAR TOWERS County Attorney Copley advised that the Planning Board had prepared a Text Amendment recommending that cellular towers could be placed by right in B-1 and B-2 districts. In all other zoning districts, a Special Use Permit would be required. She asked the Board if this item should be placed on the February agenda, or if the Board would prefer for the owners of the companies to appear before the Planning Board with this item being addressed by the Commissioners at the first meeting in March. Consensus: After discussion of the need to move forward with this issue, it was the consensus of the Board for this item to be presented at the first meeting in February. DISCUSSION OF THE NEW HANOVER COUNTY ARBORETUM RECEPTION CENTER County Manager 0' Neal reported the County agreed to fund $40,000 for construction of a Reception Center at the New Hanover County Arboretum with the Arboretum Foundation contributing approximately $60,000. He asked if the Board would prefer making a contribution to the Arboretum Foundation with this agency being responsible for the design and contracting of the building, or would the Board prefer for the County to oversee the project, which will require a more stringent bidding process including bonding requirements. County Attorney Copley advised that either the County or the Arboretum would have to be responsible for the project; therefore, the $40,000 should be donated with control of the project by the Arboretum Foundation, or the County should control the entire project according to bidding requirements under State Law. Consensus: After discussion of the proj ect being more costly under the State bidding requirements, it was the consensus of the Board to donate the $40,000 to the Arboretum Foundation for construction of the Reception Center contingent upon the Board approving the final plan as to aesthetics. DISCUSSION OF REQUESTED CAPITAL PROJECTS County Manager O'Neal presented a list of requested Capital Projects. Discussion was held on the construction of a northeast branch library to serve the citizens in that area of the County. This facility would replace the Plaza East Branch Library. Further discussion was held on the need for placement of a branch library in the Castle Hayne/Wrightsboro area. The Board concluded that construction of the northeast branch library should be placed on hold until Staff could prepare recommendations to consider placing a branch library in the Castle Hayne/Wrightsboro area. After a review of the other capital projects, it was concluded that more time was needed to study each request. Commissioner Barone advised the Board and Staff that she would be opposed to an increase in the property tax for the FY 1996-97 budget. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET RETREAT, JANUARY 18, 1996 BOOK 25 PAGE 229 ADJOURNMENT Chairman Greer adjourned the meeting at 4:30 P.M. Respectfully submitted, Lucie F. Harrell Clerk to the Board