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HomeMy WebLinkAbout1995-06-22 Consolidation NEW HANOVER COUNTY BOARD OF COMMISSIONERS CONSOLIDATION STUDY COMMISSION, JUNE 22, 1995 BOOK 24 PAGE 771 ASSEMBLY The New Hanover County Board of Commissioners and Wilmington City Council held a Consolidation Study Commission meeting on Thursday, June 22, 1995, at 8:00 A.M. in the City Hall Council Chambers, 102 North Third Street, Wilmington, North Carolina. Members present were: Commissioners Sandra Barone; WilliamA. 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. Members present from the Wilmington City Council were: Mayor Don Betz; Mayor Pro-Tern Katherine B. Moore; Councilmembers J. D. Causey; Hamilton E. Hicks, Jr.; Laura Padgett; Charlie Rivenbark; Michael Youngblood; City Manager, Mary Gornto; City Attorney, Tom Pollard, and City Clerk, Penelope Spicer-Sidbury. Chairman Greer and Mayor Betz called the respective boards to order. REPORT FROM THE FINANCE AND BUDGET COMMITTEE Commissioner Caster reported Staff had blended the County tax rate, Fire District tax rate, and City tax rate with a projected tax rate of 88 cents for the consolidated government. This figure was calculated by combining the City and County budgets. The beach communities would be assessed 63 cents, which is the present tax rate for New Hanover County. Commissioner Barone questioned whether the projected tax rate would be sufficient for the operation of a consolidated government? Commissioner Caster responded other costs would have to be included, such as an additional $670,000 for combining law enforcement, which would increase the tax rate by one cent, and the cost for upgrading services in the Fire District at $2,200,000, which would increase the tax rate by three cents. Commissioner Barone inquired as to whether the consolidated government would perform street construction and maintenance? Commissioner Caster responded the City's current system would remain in place within the City limits. A lengthy discussion was held on State maintenance of roads in the County. Commissioner Sisson advised that subdivision regulations governed the standards for new street construction to guarantee acceptance of the streets by the N. C. Department of Transportation. When final infrastructure approvals are given for the final plat to be recorded, the State could assume maintenance of the streets at this point instead of waiting until a petition was filed with driveway cuts being determined by the State at that time, which is the current procedure used by the County. Councilmember Padgett expressed concern for losing control over the number of driveway cuts, which greatly impact traffic, and questioned whether the consolidated government should consider turning all roads over to the State for maintenance. Further discussion was held on the differences in maintenance of streets within the incorporated City and unincorporated County. Commissioner Sisson responded the N. C. Department of Transportation currently performs repairs and paves roads in the County. Councilmember Hicks reported, in his opinion, the City was more responsive in handling road repairs because City residents could file a petition on the local level in lieu of having to contact the N. C. Department of Transportation. NEW HANOVER COUNTY BOARD OF COMMISSIONERS CONSOLIDATION STUDY COMMISSION, JUNE 22, 1995 BOOK 24 PAGE 772 Mayor Pro-Tern Moore reminded the members of the City Council that if the City annexes 27 square miles, the full maintenance of roads will become the responsibility of the City of Wilmington, which will be quite costly. Councilmember Padgett reported the Finance and Budget Committee had realized that a basic tax rate could be projected; however, until the two governments were consolidated, it would be impossible to know the amount of additional expenses that could be involved. The projected tax rate of 88 to 92 cents was established as a base rate. At this time, it cannot be determined how the State will interpret the consolidated government relative to street maintenance, drainage maintenance, extending sidewalks, or recreational programs beyond the current City limits. Also, insurance quotations received indicate a 30% difference in the City and County levels of fire protection; therefore, if the fire rating should go down, the cost for additional fire protection insurance on a typical $100,000 home in the City would outweigh the savings gained from a reduction in the property tax. Commissioner Sisson responded under the plan being prepared by the Public Safety Committee, the current incorporated City limits would not receive any decrease in the level of fire service. Councilmember Padgett responded the issue was whether the insurance rating service would divide the new consolidated government into areas and rate them separately, or would there be only one insurance rating district, which seems more likely at this point. In her opinion, this question cannot be answered. Also, the consolidated government could lose the franchise tax monies. She emphasized the importance of fully informing the City taxpayers before voting on consolidation that overall expenses could increase instead of decrease for these residents under a consolidated government. Commissioner Sisson agreed with Councilmember Padgett and reported a statement of this type should be made to the residents living within the City; however, consolidation can be approached with fear because of being afraid of change, or as a step forward in providing a more efficient and effective government. In his opinion, the voters will have to decide on this issue in October. Councilmember Padgett, again, expressed concern for setting a low tax rate and not fully informing the citizens that the projected tax rate could increase once the consolidated government was in place. Mayor Pro-Tern Moore expressed concern for trying to develop a line-by-line item budget for the consolidated government because of unknowns, and stated if this type of budget was prepared, the City Council should develop a line-by-line item budget for annexation, because of unknowns. A lengthy discussion was held on unknown costs involved with a consolidated government. Councilmember Youngblood expressed concern for not including costs for water and sewer, capital improvements, and public safety issues, and stated, in his opinion, the citizens should be fully informed. Mayor Betz responded Utilities report for the sewer system plus $27.8 projects. $56 million had been included in the proj ected expansion of the District's million for various water and sewer Chairman Greer reported the Finance and Budget Commi t tee combined the current tax rates and expenses for the City and County to project a single tax rate. There was no inclusion of a county- wide sewer expansion, county-wide sidewalks, or other improvements that are not currently included in the City or County budgets at NEW HANOVER COUNTY BOARD OF COMMISSIONERS CONSOLIDATION STUDY COMMISSION, JUNE 22, 1995 BOOK 24 PAGE 773 the present time. Also, revenue items were not included in the projected tax rate, such as $4 million that should be received for water and sewer expansion, and $3 million in franchise fees. He pointed out that a consolidated budget would not be prepared until FY 1996-97, at which time the transition board would have to address these items. Councilmember Youngblood inquired as to whether the Finance and Budget Committee was still committed to a single tax rate? Chairman Greer responded he felt a single tax rate should be utilized. Councilmember Youngblood questioned how the tax rate would be computed for the beach communities? Chairman Greer responded the beach communities would pay the current County tax rate of 63 cents with the same services being provided. Councilmember Youngblood commented on problems being experienced with Jacksonville Beach under the Jacksonville/Duvall County Consolidated Government and emphasized the importance of establishing a structure at the beginning of the process that will address and avoid problems in the future. Commissioner Barone commented on recreation programs and inquired as to whether recreation programs would be provided to the current unincorporated areas? Councilmember Padgett responded that costs for recreational programs within the City was the only figure used for that expenditure. Discussion was held on the differences in the levels of services that would be provided within the City limits and the unincorporated areas of the County. County Attorney Copley reported the unified tax rate could be constitutionally challenged if residents in the City received more services than residents living in the County who pay the same tax rate. She advised that the consolidated government may wish to establish two urban service districts with an explanation of the services offered in each district in order to address this matter. City Attorney Pollard agreed and reported the consolidated government under the proposed charter had authority to establish urban service districts. He advised that during the transition period, the City of Wilmington would have to be established as an urban service district immediately after voter approval of consolidation for a period of one year, and both governments would operate under separate budgets. During the second year, the consolidated government would operate under a unified budget with one urban service district for the consolidated government. This means one service level would become effective July 1, 1997. Councilmember Youngblood commented on how to balance out the differences in the levels of services provided and stated this could only be achieved by the following options: (1) decrease the level of services in the current City; (2) increase the level of services in the unincorporated areas of the County; (3) develop a mixed level of services for both the incorporated and unincorporated areas of the consolidated government; or (4) establish a dual tax rate. Chairman Greer responded he envisioned blending the different levels of services over a period of time. Councilmember Youngblood responded if the levels of services were blended, it would be imperative to develop a budget for capital improvements. NEW HANOVER COUNTY BOARD OF COMMISSIONERS CONSOLIDATION STUDY COMMISSION, JUNE 22, 1995 BOOK 24 PAGE 774 Attorney Pollard advised that a unified tax rate would not require placement of sidewalks in front of every house in the unincorporated county; however, the consolidated government would be required to develop a uniform policy that would have the possibility of extending a sidewalk to all areas of the consolidated government in a uniform manner. The same would be true with street maintenance; however, negotiations could be held with the N. C. Department of Transportation to determine what would constitute a state maintained street, a city maintained street, or a consolidated government maintained street with funds budgeted accordingly on an annual basis. As to utilities, these services will be rate driven, not tax supported, with a uniform policy for the extension of utilities. Councilmember Hicks advised he felt the largest demand for a utility would be water. Mayor Pro-Tern Moore advised that a general obligation bond issue would be needed to finance a water project for the consolidated government. She reported the proposed City bond issue at $70 million for implementing the annexation plan would be a start; therefore, when the two governments consolidate, approximately $35 million plus the $70 million would finance installing water lines in the consolidated area. Mayor Betz commented on the need to discuss the utility rate comparison and reported that phasing out the use of the sales tax for a period of three years would require a water and sewer rate adjustment of approximately 30 percent over the three-year period for the consolidated government. Currently, the City was projecting a 14% rate over a three-year period, which was the standard forecast from the bond referendum held in 1991, which was approximately a 5% rate increase and did not include the projected rate in the annexation plan for the 27 square-mile area. Councilmember Padgett responded if the City annexed the 27 square miles, the water and sewer rate would not increase by 11% for anyone year. The rate may increase by one or two percent, but not by 11%. She stated the residents of the City would pay higher water and sewer rates under a consolidated government than under the City's annexation plan. She emphasized the importance of the City residents understanding that consolidation will cost them more instead of less. The tax rate may decrease but the water and sewer utility rates and other services will increase. Mayor Betz responded he did not feel a statement of this type could be made, and he emphasized the fact that residents would be given an opportunity to vote on consolidation before the proposed annexation plan was implemented, which in his opinion, was an important consideration. Councilmember Padgett reported the City was in the position of having to annex; therefore, if consolidation should not occur, the City would immediately begin its annexation plan. She stated the entire 27 square miles would not be annexed at one time, and she expressed concern for many of the comparison figures presented in the consolidation effort being based on the entire annexation plan instead of a phased-in plan. Mayor Pro-Tern Moore responded the present annexation plan will cover the entire area within five years. She reported when the various line items are delineated, the City residents should be furnished comparison figures on consolidation versus annexation. Discussion was held on the services provided to the beach communities. Councilmember Causey commented on the tax rate being adjusted for the beach communities and inquired as to whether a formula had been developed? NEW HANOVER COUNTY BOARD OF COMMISSIONERS CONSOLIDATION STUDY COMMISSION, JUNE 22, 1995 BOOK 24 PAGE 775 Chairman Greer responded no formula had been developed. Councilmember Causey expressed concern for not providing a formula under the consolidated government that would address an issue of this type. A lengthy discussion was held on whether the projected tax rate of 88 cents was realistic. After discussion of having to increase the tax rate by one cent for combining law enforcement and three cents for upgrading fire services in the County Fire District, Councilman Hicks expressed concern for publicizing a figure of 88 cents until all final reports had been submitted. He suggested placing an asterisk by this figure, which would say, "pendinq final committee reports" in order to avoid misleading the general public. After discussion, it was agreed to use the asterisk as requested by Councilmember Hicks. Commissioner Sisson reported in 1997, the County will have completed its property revaluation and the 8-year revaluation cycle will be shortened to a 4-year cycle, which should stabilize the tax rate for the consolidated government. ACCEPTANCE OF PLANNING AND ZONING REPORT Commissioner Sisson reported the Planning Commission would be composed of nine members. During the transition period, both the Ci ty and County Zoning Ordinances would be used. The Planning Commission would work toward developing a unified ordinance, centralizing permitting at one location, and increasing the emphasis on long-range planning. Once a unified ordinance was prepared, the ordinance would be presented to the Consolidated Board of Commissioners. Commissioner Barone recommended establishing a seven-member Planning Board in order to avoid a nine-member board that would create a totally unmanageable situation. Mayor Pro-Tern Moore responded she felt a nine-member Planning Commission was needed because of the work that would be involved with preparing a unified ordinance. Motion: Mayor Pro-Tern Moore MOVED, SECONDED by Commissioner Sisson to accept the final report of the Planning and Zoning Committee as presented. Upon vote, the MOTION CARRIED UNANIMOUSLY. TIE VOTE ON PARTISAN AND NON-PARTISAN ELECTIONS Chairman Greer reported at the last meeting there was a tie vote on whether to hold partisan or non-partisan elections; therefore, the group should re-vote on this issue with each member answering "partisan" or "non-partisan" when responding to the roll- call vote. Councilmember Rivenbark inquired as to whether the new consolidated government would have the ability to change from partisan to non-partisan elections? City Attorney Pollard responded the proposed charter provides for changes of this type through the adoption of an ordinance by the Consolidated Board of Commissioners. Roll-Call Vote: Mayor Betz and Chairman Greer called for a roll- call vote on partisan or non-partisan elections with a TIE VOTE as follows: Mayor Pro Tern Moore Councilmember Padgett Councilmember Causey Councilmember Hicks Councilmember Rivenbark Mayor Betz Non-Partisan Non-Partisan Non-Partisan Non-Partisan Non-Partisan Non-Partisan NEW HANOVER COUNTY BOARD OF COMMISSIONERS CONSOLIDATION STUDY COMMISSION, JUNE 22, 1995 BOOK 24 PAGE 776 Commissioner Sisson Non-Partisan Vote Count: 7.4 rounded off to 7 votes. Commissioner Barone Commissioner Caster vice-Chairman Mathews Chairman Greer Councilmember Youngblood - Partisan Partisan Partisan Partisan Partisan Vote Count: 6.6 rounded off to 7 votes. Another vote on partisan or non-partisan elections will be held on July 18, 1995. REPORT FROM THE PUBLIC SAFETY COMMITTEE Commissioner Sisson reported the Public Safety Committee was scheduled to meet last week; however, the meeting was cancelled. Once another meeting is scheduled, the fire service recommendation will be reviewed, and hopefully the final report can be presented to the Consolidation Study Commission before the next meeting. REPORT FROM UTILITIES COMMITTEE Commissioner Barone reported the Utilities Committee just met and was not able to complete a report for today's meeting; however, a copy of the report would be forwarded to each member of the Consolidation Study Commission well in advance of the meeting scheduled for July 18, 1995. DISCUSSION OF MATTERS TO BE ADDRESSED BY THE BUDGET AND FINANCE COMMITTEE Mayor Pro-Tern Moore inquired as to what items should be addressed in the final report to be submitted by the Budget and Finance Committee. Chairman Greer responded the cost for fire service was the basic issue to be addressed since information had already been received on personnel costs and merging of law enforcement. The Budget and Finance Committee will be presenting figures on the current City and County operations with a projected tax rate based on the combined costs. A statement will be prepared to explain that a policy will be developed for extending sewer lines, sidewalks, and other services. Also, the citizens will be informed that consolidation should save money over a period of time. Chairman Greer urged the Utilities Committee and Public Safety Committee to present final reports before July 18, 1995. ADJOURNMENT Chairman Greer adjourned the meeting at 9:25 A.M. Respectfully submitted, Lucie F. Harrell Clerk to the Board