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2000-05-25 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, MAY 25, 2000 BOOK 27 PAGE 990 ASSEMBLY The New Hanover County Board of Connnissioners held a Budget Work Session on Thursday, May 25, 2000, at 6:30 p.m. in Room 501 of the New Hanover County Administration Building, 320 Chestnut Street, Wilmington, North Carolina. Members present were: Connnissioner Buzz Birzenieks; Connnissioner Ted Davis, Jr.; Connnissioner Charles R. Howell; Vice-Chairman Robert G. Greer; Chairman William A. Caster; County Manager, Allen 0' Neal; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie F. Harrell. Administrative Staff Members present were: Deputy County Manager, Andrew 1. Atkinson; Assistant County Manager, Patricia A. Melvin; Budget Director, Cam Griffin, Budget Analyst, Toni Shields; Deputy Finance Director, Julie Griffin; and Public Information Officer, Mark Boyer. Chairman Caster called the meeting to order. Chairman Caster informed the Board that he had toured the Veterans Park Complex with Board of Education Member, Steve Bilzi, and Architect Paul Boney. He noted that the size of the complex was amazing and reported that the new school and Performing Arts Center were going to be first class facilities. He also stated that the school budget had been discussed with Mr. Ed Higgins, Chairman of the Board of Education, and Ms. Nancy Wigley, Chairman of the School Finance Connnittee, who said that a great deal of time and effort had gone into the preparation of their budget for the upcoming year. Both members were informed that once the Budget Work Session has been held, more information would be known about funding for Veterans Park and the schools. DISCUSSION OF FUNDING FOR NEW HANOVER COUNTY SCHOOLS County Manager O'Neal presented the following figures from the N. C. Department of Public Instruction on the projected average daily membership for New Hanover County Schools: 1999-2000 2000-2001 2001- 2002 2002- 2003 2003-2004 21,038 20,979 20,953 20,922 20,916 County Manager O'Neal also presented a statement reflecting that funding per student had increased from $931 in FY 1989-1990 to $2,355 in1999-2000. Budget Director Griffin advised that Commissioner Birzenieks had requested the percentage of increase in funding for the current operation of schools from 1996-1997 through the recommended budget. She reported that the percentage of increase was 50% with County funding increasing from FY 1996-1997 through FY 1999-2000 by 67.9%, which includes an increase in a transfer of sales tax of 33.1 %. The percentage increase in the general fund transfer to schools for this period has increased by72.9%. Connnissioner Davis stated that the figures presented show an increase in school funding for the past four years in the amount of $21,043,834 representing a percentage increase of 72.9%. An interesting factor is that the student population has not significantly increased. County Manager O'Neal reminded the Board that figures presented include the amount of money spent on bond debt; therefore, the Board of Education will argue that bond debt is the responsibility of New Hanover County and these figures should not be included in the per capita funding. Connnissioner Davis expressed concern for increasing the property tax rate year after year to meet the needs of the community. He emphasized the importance of finding another revenue source and stated that the N. C. General Assembly should provide enabling legislation to allow local governments to impose a local option one-cent sales tax. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, MAY 25, 2000 BOOK 27 PAGE 991 Discussion was held on the number of school positions paid by New Hanover County. Budget Director Griffin advised that 767 school positions are fully funded by the County with 137 of those positions being teachers. Discussion was held on the fact that many of the citizens are not aware of the number of positions paid entirely by New Hanover County. County Manager O'Neal informed the Board that most large counties do fund positions for schools. Last year, Wake County raised its tax rate by 10 cents to provide additional funding and positions to the schools. Connnissioner Birzenieks commented on the need for teachers to receive better pay nationwide. He expressed concern for the County increasing the recommended tax rate last year to provide sufficient funding to the schools for payment of teacher supplements. County Manager O'Neal advised that only $68,000 of the additional funding was used for teacher supplements. Connnissioner Davis read the following statement from the approved budget for FY 1999- 2000: The County Commissioners increased the recommended tax rate by one cent to increase funding for the New Hanover County School System. This increase enables the Schools to have sufficient funds available for the followings items: Teacher Supplements Maintenance Salary Increases for County Paid Employees $2.5 million $1.0 million $1.1 million Connnissioner Davis expressed concern for the Board of Education not using the funds to pay for teacher supplements. Discussion followed on State Law regarding the use of county funding by the Boards of Education. County Manager O'Neal explained that since the Board of Education is an elected body, a line item budget cannot be prepared to require the Board of Education to spend funds as recommended by a Board of County Connnissioners. Vice-Chairman Greer stated after reviewing the figures, the School System has 3,364 full time employees with only 1,455 teaching positions, which means that 1,909 are for other purposes than teaching. County Manager O'Neal explained that consideration must be given to the number of employees needed for clerical positions, secretarial positions, bus drivers, cafeteria positions, teacher aides, and custodian positions. Vice-Chairman Greer commented on understanding the needs of the schools, including mandates, but stated the Connnissioners cannot add 15 to 20 cents per year to the tax rate to meet the needs of the schools. He reiterated the importance of the General Assembly allowing counties to impose a local option sales tax as another source of revenue. BREAK Chairman Caster called a break from 7: 15 to 7:30 p.m. DISCUSSION OF THE RECOMMENDED 2000-2001 BUDGET County Manager O'Neal presented the following chart of the FY 1999-2000 tax rate for the ten largest counties in the State of North Carolina: Buncombe County Cumberland County $.6300 $.8400 NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, MAY 25, 2000 BOOK 27 PAGE 992 Durham County Forsyth County Gaston County Guilford County Mecklenburg New Hanover County Onslow County Wake County $.9297 $.6625 $.8250 $.6372 $.7300 $.5650 $.6940 $.7300 Discussion was held on the number of cents on the tax rate that would be needed to fund the increase in school debt service from FY 1999-2000 to FY 2000-2001. Budget Director Griffin explained that $3.04 cents on the tax rate would be required to pay the increase in debt service and 7.79 cents would be required to fund the total debt service for schools. Chairman Caster stressed the importance of everyone understanding that the proposed 3 cent increase in the tax rate for FY 2000-2001 is to pay for school debt service. Connnissioner Davis asked if some capital projects should be delayed to avoid future tax increases. He also said that he understood no funding had been budgeted for the soccer fields at Cape Fear Community College in the recommended budget. Budget Director Griffin explained that $2.2 million was recommended for the Parks Department to budget the following items: (1) Salaries and Benefits at $1,143,000; Operating Expenses at $651,000; and Capital Outlay at $396,300. The following items will be paid from the budgeted Capital Outlay funding: Matching Incentive Grant Projects Picnic Shelter Renovations - Hugh MacRae Park Garden Renovations - Hugh MacRae Park Ball Field Lighting Replacement - Hugh MacRae Park Ball Field Renovations - Hugh MacRae Park Bleachers for Various Parks Parking Lot Renovations - Cape Fear Optimist Park Computerized Control System Pier Replacement - Riverside Park Resurface Tennis Courts - Arrowhead Park Resurface Tennis Courts - Laney, Hoggard & Blair-Noble Total $ 25,000 $ 12,000 $ 60,000 $125,000 $ 10,000 $ 8,000 $ 65,000 $ 45,000 $ 8,000 $ 6,300 $ 32,000 $396,300 Further discussion was held on funding for Veterans Park. Budget Director Griffin explained that debt service was budgeted in the amount of $307,163 for FY 2001-2002; however, $950,000 has been budgeted for Veterans Parks to complete the design work. County Manager O'Neal advised that $7 million has been budgeted for infrastructure at Veterans Park to construct the roads, water and sewer lines, water tower, retention ponds, and other infrastructure needs. He expressed concern for hearing people say that New Hanover County has not contributed a great deal of money to the Veterans Park Complex. Budget Director Griffin advised when the budget was adopted in June, 1999, the Connnissioners budgeted $650,000 for initial stages of park development in Veterans Park. This money is part of the $950,000 budgeted for design work. She requested the Commissioners to review Page 7 of the Recommended 2000-2001 Budget which reads as follows: Capital Improvement Program: No funds are included for directly funding capital projects. Plans call for financing the cost of developing Veterans Park, the Administration Building, Judicial Building, and J ail Expansion. The Board may want to increase the budget to fund some of these projects on a pay-as-you-go- basis. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, MAY 25, 2000 BOOK 27 PAGE 993 Discussion was held on funding for the Department of Social Services. County Manager O'Neal noted that if the economy should turn downward, the County's requirements for entitlement programs will increase. Staff may have to request the Board to request an appropriation from the fund balance to pay for the County's portion as required by federal law. The most costly item is Medicaid for the elderly and low income people. Connnissioner Birzenieks requested an explanation of the figure budgeted for Medicaid and the amount of expenditures for the current year. Budget Director Griffin responded that $5.7 million was budgeted and stated the expenditure figure has not been determined for the current year. Commissioner Birzenieks commented on the need to fund outside agencies that can keep patients out of nursing homes and out of emergency departments, such as Elderhaus and Crisis Line/Open House, and stated that a great deal of money can be saved through services provided by these agencies. He suggested fully funding both agencies and decreasing the DSS Medicaid budget by that amount. General discussion was held on future debt service that will significantly increase the property tax rate. Connnissioner Howell asked if tax rates could be increased and revenue earmarked to pay for future debt service. County Manager O'Neal responded that the tax rate could be raised with a designated amount of money placed in a capital reserve fund to be used to pay future debt service. Connnissioner Birzenieks spoke on the need for the federal and state governments to recognize that property owners, not only in New Hanover County but throughout the state, are overburdened with taxes. Local governments cannot continue to pay for mandated programs without funding other sources of revenue. There is an urgent need for counties to unite and approach the General Assembly about need for counties to seek additional sources of revenue, such as the one-cent local option sales tax that would generate $12 to $18 million annually in New Hanover County to assist with construction of schools, drainage, debt service, ballfields and other needs. DISCUSSION OF NEW POSITIONS County Manager O'Neal informed the Board that only 8 instead of 11 new positions are being recommended in the FY 2000-2001 general fund budget. He advised that two Housekeeper I and one Housekeeper II positions have been eliminated and three positions for the Southeastern Mental Health Center have been eliminated because a satisfactory agreement could not be reached. Budget Director Griffin advised that the 8 recommended positions paid through the general fund will cost $190,170. These positions are 2 Groundskeeper positions for Airlie Gardens, 1 Clerk to the Board Trainee position, 1 Risk Manager and lAdministrative Secretary to replace the Insurance Advisory Connnittee, 2 Groundskeeper positions for Parks; and 1 Tradesworker II for Property Management. Further discussion was held on the new Assistant District Attorney position. Budget Director Griffin explained that the new Assistant District Attorney position was not listed as a recommended position because funding was included in the contribution to the District Attorney for this State position. Connnissioner Birzenieks and Connnissioner Davis strongly objected to funding a State position. County Manager O'Neal explained that he included this position in the funding to the District Attorney because an additional Assistant District Attorney position will speed up prosecuting cases and moving inmates out of the jail. Connnissioner Birzenieks stated that an attorney graduating from law school could be hired for $38,000 versus the $61,796 budgeted. If approved, this will be a County funded position, and there is no assurance that the new Assistant District Attorney will not be prosecuting cases in Pender NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, MAY 25, 2000 BOOK 27 PAGE 994 County. He recommended eliminating funding for this position because it should be funded by the State of North Carolina. Connnissioner Davis agreed with Connnissioner Birzenieks and stated that New Hanover County should not pay for a State position. Vice-Chairman Greer said that he discussed the new position with District Attorney John Carriker. The workload in the New Hanover County Court System has greatly increased. When comparing District Attorney offices throughout the State with John Carriker's office, New Hanover County is prosecuting more cases with fewer positions. It is unfortunate that New Hanover County has to pay for a State position, but if a new Assistant District Attorney position will speed up the number of people being removed from the jail, the position may be well worth the money. Vice-Chairman Greer also advised that he had discussed funding with the Administrative Office of the Courts in Raleigh, N. c., and he was informed that court monies would more than cover the operation of the courts. When discussing this matter with Budget Director Griffin, it was decided to prepare a financial statement that will reflect the cost of operating the court system in New Hanover County. Once this statement is prepared, the Connnissioners can go to Raleigh and clarify this misconception. Connnissioner Birzenieks noted that if the District Attorney is performing more work than other court systems, it is the responsibility of the State to remove resources away from the other court system and fund the position for the New Hanover County Court System. After further discussion, the Board directed Staff to place the new Assistant District Attorney position on the list of concerns. Further discussion was held on the two Groundskeeper positions for Airlie Gardens. County Manager O'Neal advised that 4 Groundskeeper positions and 2 Landscape Technician positions have been requested with only 2 Groundskeeper positions recommended. Currently, there are 14 positions at Airlie Gardens. Vice-Chairman Greer recommended funding only one Groundskeeper position for Airlie Gardens. After further discussion, Staff was directed to place the two Groundskeeper positions for Airlie Gardens on the list of concerns. General discussion was held on the funding provided to Kure Beach, Carolina Beach, and Wrightsville Beach. County Manager O'Neal advised that a formula was established many years ago to assist the beach communities to pay for lifeguards and other services associated with tourists visiting the local beaches. He informed the Board that no one knows the formula used to calculate the specific funding; however, funding amounts of $18,621 for Kure Beach, $55,036 for Carolina Beach, and $67,118 for Wrightsville Beach have been included in the recommended budget. Budget Director Griffin reported that the formula was established when the federal government was providing revenue sharing to local governments. Vice-Chairman Greer recommended leaving funding for the beach communities in the recommended budget. Connnissioner Davis requested an explanation of how the beach communities would use the funding. Vice-Chairman Greer responded that funds are used to pay for lifeguards and other expenses incurred with tourists and county citizens visiting and using the services of the beach communities. In the past, discussions have been held about eliminating this funding and concern was expressed by the beach communities about the number of local citizens that visit the beach and use their serVIces. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, MAY 25, 2000 BOOK 27 PAGE 995 After discussion of the number of county citizens that use the beaches and the good relationship between the County and beach communities, the Board directed Staff to leave funds appropriated to each beach community in the recommended budget Discussion was held on funding for the Bellamy Mansion. Connnissioner Howell suggested appropriating some funding to this organization. ConnnissionerDavis asked why St. John's Museum of Art was being funded $13,365 under Cultural & Recreational and $37,500 under Capital requests. Budget Director Griffin explained that the $13,365 was appropriated for operating expenses and the $75,000 appropriation was a split of $37,500 to St. John's Museum of Art and the N. C. Aquarium at Fort Fisher. After further discussion of funding appropriated last year, the Clerk to the Board was requested to check the minutes to see how the funding connnitment was appropriated to each organization. Vice-Chairman Greer commented on the $22,000 being eliminated for the Planned Parenthood Programs and he recommended increasing the funding for the Film Connnission by $10,000 and appropriating funding in the amount of $12,000 for the Bellamy Mansion. He also stated that the Film Connnission has requested funding from Brunswick County and Pender County. After further discussion, it was decided to hold the Public Hearing on June 5,2000, to receive input on the funding requests by County Departments and outside agencies before rendering any decisions. County Manager O'Neal reported that a minimal amount of funding has been budgeted to reward County employees for their good work and to implement the Pay and Classification Plan during the last months of the next fiscal year. He urged the Board to make a decision about implementing the pay plan since the City's new plan has been implemented with higher salary ranges, which could result in losing experienced County employees to the City. Connnissioner Birzenieks stressed the importance of the Board being sensitive to providing competitive compensation to County employees when deciding on the budget. He said that New Hanover Regional Medical Center was a prime example of where a high turnover rate has resulted in a great deal of money being spent for temporary positions. Connnissioner Davis commented on the need to fairly compensate County employees and stated that money has been included in the recommended budget for the County to pay the increased rate in hospital insurance for County employees. In concluding his remarks, County Manager O'Neal advised that Staff has not appropriated money from the fund balance to prepare the FY 2000-2001 Budget. He stressed the importance of completing the budget process without using the fund balance so the current bond ratings can be maintained. He also expressed appreciation to the Board for taking time to review the recommended budget. Connnissioner Birzenieks expressed appreciation to the Administrative Staff and Budget Department for hard work given to prepare the recommended budget. ADJOURNMENT Chairman Caster advised that no final decisions will be made until after the June 5,2000, meeting of the Board when County Departments and outside agencies will present budget requests. He called for a motion to adjourn the meeting. Motion: Commissioner Birzenieks MOVED, SECONDED by Commissioner Davis, to adjourn. Upon vote, the MOTION CARRIED UNANIMOUSL Y. Chairman adjourned the meeting at 9:20 p.m. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, MAY 25, 2000 BOOK 27 PAGE 996 Respectfully submitted, Lucie F. Harrell Clerk to the Board