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1995-08-21 Regular Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 868 ASSEMBLY The New Hanover County Board of Commissioners met in Regular Session on Monday, August 21, 1995, at 9:00 A.M. in the Assembly Room of the New Hanover County Courthouse, 24 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. Chairman Greer called the meeting to order and welcomed everyone present. INVOCATION AND PLEDGE OF ALLEGIANCE Deputy County Manager, Andrew J. invocation. Atkinson, gave the Commissioner Caster led the audience ln the Pledge of Allegiance to the Flag. NON-AGENDA ITEMS Chairman Greer inquired as to whether anyone from the general public would like to present an item not listed on the Regular Agenda or comment on an item listed on the Consent Agenda. The following items was presented: Adoption of Resolution to Urge the State Legislature to Effectively Regulate Animal Waste in Lagoons Mr. Howard Greenebaum reported the County was under direct threat from the reckless handling of hog waste by large hog operations upstream. After speaking with the chemist in charge of water treatment at the Sweeney Water Treatment Plant, he advised that parasites, like cryptosporidium, are resistant to chlorine. An ozone system has been ordered, which can destroy parasites, but it will not be ready for operation until the end of 1996. The citizens are now vulnerable to many germs flowing downstream into the New Hanover County from hog waste. Mr. Greenebaum presented fourteen recommendations and requested the Commissioners to demand the N. C. Legislature to impose a comprehensive moratorium contingent upon the following conditions: (1) No construction of new hog farms or expanSlon of existing hog farms during the moratorium. (2) No increase in the current hog populations with inspection and monitoring of the hog populations during the moratorium. (3) Prohibit meat processing plants to be constructed in North Carolina during the moratorium. vice-Chairman Mathews introduced and read the following resolution: RESOLUTION WHEREAS, animal waste lagoons have been the source of millions of gallons of animal waste spilled into coastal North Carolina waters in recent months; WHEREAS, the animal waste spills have significantly polluted fragile estuarine systems with oxygen-depleting wastes and threatened human health with pathogenic organisms; NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 869 WHEREAS, animal waste lagoons are proliferating rapidly in coastal North Carolina; WHEREAS, the City of Wilmington is dependent upon the Cape Fear River as a source of drinking water; and WHEREAS, the County's estuarine creeks and rivers contribute to the high quality of life for County residents and are essential to maintaining valuable economies of tourism and fishing; THEREFORE BE IT RESOLVED, that the New Hanover County Board of Commissioners resolves that the State of North Carolina should commit whatever resources are necessary and should take whatever steps are required for effective regulations and enforcement to ensure that animal wastes are properly treated and managed. Motion: Vice-Chairman Mathews MOVED, SECONDED by Sisson to adopt the resolution and forward a copy Congressional Delegation and N. C. State Delegation. opened for discussion. Commissioner to the U. S . The floor was Mr. Greenebaum requested amending the resolution to request a moratorium. Chairman Greer inquired as to whether the Board would like to amend the motion. No response was received. Upon vote, the MOTION CARRIED UNANIMOUSLY to adopt the resolution as presented. A copy of the resolution is hereby incorporated as a part of the minutes and is contained in Exhibit Book XXII, Page 41. Status Report on "Telephone Directory Recycling Program" Sponsored by Keep America Beautiful Ms. Nancy Pritchett, Executive Director of Keep America Beautiful, reported in May and June the citizens of New Hanover County turned in 56.4 tons of telephone directories, which equaled 112,980 pounds. This figure set a record for the Telephone Directory Recycling Program, and she congratulated the citizens of the County for this outstanding effort. Ms. Pritchett, also, invited the Commissioners America Beautiful for the annual "Big Sweep" to September 16, 1995, from 9:00 A.M. until 2:00 P.M. beaches and waterways in the County. to join Keep be held on to clean the State of Emergency Rescinded County Manager O'Neal requested the Board to rescinding the State of Emergency that was declared as a Hurricane Felix. consider result of Commissioner Barone expressed concern for calling off the State of Emergency before knowing the exact path of Hurricane Felix. Motion: Vice-Chairman Mathews Caster to rescind the State of 1995, due to Hurricane Felix. UNANIMOUSLY. MOVED, SECONDED by Commissioner Emergency declared on August 16, Upon vote, the MOTION CARRIED APPROVAL OF CONSENT AGENDA Commissioner Sisson reported some concerns had been expressed by the Planning Department regarding the road petition for Buck Drive and Carolyn Hill Road. He requested removing this road petition from Consent Agenda Item #5. Commissioner Barone complimented the Clerk to the Board on the excellent manner in which the minutes were written for the regular NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 870 meetings of July 17, 1995, and August 7, 1995. Motion: Commissioner Sisson MOVED, SECONDED by Vice-Chairman Mathews to approve the items on the Consent Agenda with removal of the Buck Drive and Carolyn Hill Road petition from Consent Agenda Item #5 for further study by the Planning Staff. Upon vote, the MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA Approval of Minutes The Commissioners approved the minutes of the Regular Meetings of July 17, 1995, and August 7, 1995, as presented by the Clerk to the Board. Adoption of Resolution Authorizing the Finance Office to Dispose of Richo Copier as a Trade-in on the Purchase of New Copier and Approval of Budget Amendment #96-0022 The Commissioners approved the following Budget Amendment and adopted a resolution authorizing the Finance Office to dispose of a Richo Copier, Model #FT5520, Serial Number #0140049824 pursuant to G.S. 160A-267 as a trade-in (private sale) on the purchase of the new copler. A copy of the resolution is hereby incorporated as a part of the minutes and is contained in Exhibit Book XXII, Page 41. Budget Amendment #96-0022 - Finance Department Debit Credit Finance Department Sale of Fixed Assets Capital Outlay/Equipment $700 $700 Purpose: To budget recognized trade-in allowance for Richo copler. Acceptance of DWI Mini-Grant Awarded to the Sheriff's Department and Approval of Budget Amendment #96-0020 The Commissioners accepted an award of a DWI mini-grant in the amount of $2,820 to the Sheriff's Department from the Governor's Highway Safety Program and approved the associated Budget Amendment as listed below. The grant is for a period of three weeks and will pay for overtime incurred to conduct sobriety checkpoints. Sheriff's Department - 96-0020 Debit Credit Sheriff's Department DWI-Overtime Grant Sheriff's Department Salaries FICA Retirement $2,820 $2,415 185 220 Purpose: To increase the budget for the DWI mini-grant awarded to the Sheriff's Department. Approval of Contract #96-0062 with the University of North Carolina at Wilmington for the Third Phase of the Tidal Creek Water Quality Studies in the Major Estuarine Creeks The Commissioners approved a contract with the University of North Carolina at Wilmington in the amount of $20,000 for the third phase of the Tidal Creek Water Quality Studies in the major estuarine creeks. The funds have been budgeted for FY 1995-96 and additional matching funds for the project will be provided by the Northeast New Hanover Conservancy and UNC-W Center for Marine Science Research. The County Manager was authorized to execute the contract documents. Adoption of Resolutions for Road Additions to the State Highway NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 871 System The Commissioners adopted resolutions to add the following roads to the State Highway System: Roads in River Oaks Subdivision Wedgefield Drive of Crosswind South Subdivision Roads in Dawning Creek and Whispering pines Subdivisions Roads in Wendover North, willow Brook, and Jacobs Run Subdivision Copies of the resolutions are hereby incorporated as a part of the minutes and are contained in Exhibit Book XXII, Page 41. Authorization for the New Hanover County Public Library to File an Application for the State Aid to Public Libraries Grant for FY 1995-96 The Commissioners authorized the New Hanover County Library to file an application for the State Aid to Public Libraries in the amount of $137,462 for FY 1995-96. The County Manager was authorized to execute the grant application. Request from Zachary Kent Northup for Refund on Vehicle Taxes The Commissioners approved a refund to Zachary Kent Northup for ten months of taxes paid on Account P940806426 because the same vehicle and same owner was taxed twice within the "vehicle tax year" of 12 months. Since the existing law does not make a provision to pro-rate the taxes in such situations, the Tax Administrator has requested the following procedure be established for cases of this type: That, as provided by NCGS 105-381(b), the Board of County Commissioners resolves to delegate future authority for the Finance Officer, County Manager, or County Attorney to determine request for release or refund of a tax less than one-hundred dollars ($100.00) Release of Value - Tax Department The Commissioners approved a value adjustment in the amount of $5,950 for Dewey L. Bordeaux, Jr. as recommended by the Tax Administrator because of conditions that had not been brought to the attention of the Tax Department. The Commissioners approved delinquent applications for exemption from property tax for the following properties: Wilmington/New Hanover Community Development R04805-021-005-000 R04805-021-006-000 R04805-021-007-000 Approval of Tax Collection Reports Through July 31, 1995 The Commissioners approved the following Tax Collection Reports through July 31, 1995, as presented by the Collector of Revenue: New Hanover County Tax Collections New Hanover County Fire District Tax Collections Copies of the Tax Collection Reports are hereby incorporated as a part of the minutes and are contained in Exhibit Book XXII, Page 41. Acceptance of The Alternatives to Detention Program State Grant and Approval of Budget Amendment #96-0021 The Commissioners accepted the FY 1995-96 Alternatives to Detention State grant in the amount of $69,471 and approved the following Budget Amendment: Budget Amendment #96-0021 - Community Based Alternatives Agencies NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 872 Debit Credit community Based Alternatives Aqencies CBA Grants $69,471 Alternatives to Detention Program $69,471 Purpose: To budget the FY 1995-96 Alternatives to Detention Grant. No County match is required. Approval of Budget Transportation Amendment #96-0017 Human Services Debit Credit Human Services Transportation TAP-Medicaid Transportation Assistance $3,113 2,133 Human Services Transportation TAP-Medicaid Elderly Disabled $3,113 2,706 573 Purpose: To adjust budget to actual FY 1996 allocation and to budget unexpended funds from FY 1994-95. Approval of Budget Amendment #96-0018 - Cooperative Extension The Commissioners approved the following Budget Amendment: 96-0018 - Cooperative Extension Debit Credit Cooperative Extension COOP-Child Care Block Grant $21,132 Cooperative Extension Salaries FICA Medical Insurance Telephone printing Supplies Travel $15,076 1,073 1,396 361 394 2,124 708 Purpose: To rollover unexpended grant funds from FY 1994-95. PRESENTATION OF RETIREMENT PLAQUES Chairman Greer, on behalf of the Board, presented retirement plaques to the following employees and expressed appreciation to them for their years of dedicated service to New Hanover County: Jacqueline L. Watkins, Sheriff's Dept. Marcelle Austin, Aging 15 years 11 years, 11 months PRESENTATION OF SERVICE AWARDS County Manager O'Neal requested the following employees to step forward to receive awards: Name Years of Service Mark W. Vincent, Sheriff's Department 5 Sidney L. Sullivan, Engineering Department 5 Sarah G. Harrell, Health Department 5 Monique Simon, Health Department 5 Marilyn J. Catlett, DSS 5 Doran C. Gause, DSS 5 Karen L. Batton-Parks 5 Stephen J. Toth-Parks 5 Sherry Peay, Finance Department 10 Brenda Coffey, Emergency Management 10 Larry D. Mays, DSS 15 NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 873 Chairman Greer, on behalf of the Board, presented service awards and expressed appreciation to these employees for their years of dedicated service to New Hanover County. ACCEPTANCE OF THE 1994 SETTLEMENT, REAPPOINTMENT OF PATRICIA J. RAYNOR AS COLLECTOR OF REVENUE FOR FY 1995-96 AND CHARGE FOR THE COLLECTION OF THE 1995 LEVY Chairman Greer, on behalf of the Board, recognized Ms. patricia J. Raynor and her staff for an outstanding job in the collection of taxes during the past year at a rate of 98.57 percent, which is one of the highest rates in the State. He requested a motion to accept the 1994 Settlement of Tax Collections and reappoint Ms. Raynor as Collector of Revenue For FY 1995-96. Motion: Commissioner Barone MOVED, SECONDED by Commissioner Caster to accept the 1994 Settlement of Tax Collections. Upon vote, the MOTION CARRIED UNANIMOUSLY. Motion: Commissioner Sisson MOVED, SECONDED by Vice-Chairman Mathews to reappoint patricia J. Raynor as the Collector of Revenue and charge her with the collection of the 1995 tax levy. Upon vote, the MOTION CARRIED UNANIMOUSLY. Copies of the Charge Sheet and Settlement of Tax Collections for 1994 are hereby incorporated as a part of the minutes and are contained in Exhibit Book XXII, Page 41. ADOPTION OF RESOLUTION AUTHORIZING EXECUTION OF THE FINAL CONSENT DECREE IN THE UNITED STATES V. WASTE INDUSTRIES, ET. AL FLEMINGTON LANDFILL County Attorney Copley reported New Hanover County was one of eight defendants charged with pollution of groundwater in the use of a former Flemington Landfill site. She advised the Board that the case had been on the books since 1980 with an original claim of $1,000,0000, and she explained the case could now be settled for $175,000 with the County paying its share of 17.5 percent not to exceed $30,625. The funds would be for past response costs and additional costs will be involved with monitoring the wells. Chairman Greer inquired as to what will happen in this case after three to five years? Director of Environmental Management, Ray Church, reported the Final Consent Decree was for three years; however, monitoring of the wells would be required for years four and five. After the five-year period, the case would be closed. Motion: Commissioner Sisson MOVED, SECONDED by Vice-Chairman Mathews to accept the settlement with the County paying a sum not to exceed $30,625 and adopt the resolution authorizing the County Attorney to execute the Final Consent Decree in the Flemington Landfill case. Upon vote, the MOTION CARRIED UNANIMOUSLY. A copy of the resolution is hereby incorporated as part of the minutes and is contained in Exhibit Book XXII, Page 41. A copy of the Final Consent Decree is on file in the Legal Department. ADOPTION OF AMENDMENTS TO THE FLEMINGTON ORDINANCE, CHAPTER 12, OFFENSES, ARTICLE VIII CONTAMINATION OF GROUNDWATER, NEW HANOVER COUNTY CODE Director of Environmental Management, Ray Church, requested the Commissioners to approve an amendment to the original Flemington Ordinance enacted in 1987 in response to decrees in the EPA litigation. He reported the proposed amendment reflects the final resolution of the case, and the Declaration of Policy Section will now reflect there is no imminent and substantial endangerment NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 874 as a result of any groundwater contamination. The amendment will reduce the restricted area to a much smaller site. Motion: Vice-Chairman Mathews MOVED, SECONDED by Commissioner Sisson to adopt the Flemington Ordinance Amendment to Chapter 12, Offenses, Article VIII Contamination of Groundwater, in the New Hanover County Code. Upon vote, the MOTION CARRIED UNANIMOUSLY. A copy of the amendment is hereby incorporated as a part of the minutes and is contained in Exhibit Book XXII, Page 41. The amendment will be codified into the New Hanover County Code. MEETING RECESSED FOR A BREAK Chairman Greer called a break from 10:40 A.M. until 11:00 A.M. APPEAL OF DISCOVERY FROM TAX MANAGEMENT ASSOCIATES AUDIT OF FALCON CABLE MEDIA Tax Administrator Register, introduced Mr. Charles E. Gore, a Senior Analyst of Property Tax Accounting Division of the Adjunct Business Resources Group, Inc., and reported Mr. Gore would present the tax appeal on behalf of Falcon Cable Media. Mr. Gore passed out a booklet containing pertinent data and presented the following tax appeal: The Property Tax Accounting Division of the Adjunct Business Resources Group, Inc. respectfully appeals the tangible personal property alleged tax escaped discoveries advanced by Tax Management Associations, Incorporated, (TMA) an outside (of government) firm engaged by the County and proposed by the New Hanover County Tax Administrator. A major objection by the taxpayer to the alleged discoveries is the flawed methodology endorsed by New Hanover County in determining the assessment value of the cable property at the time the property changed hands in 1988 from the previous owner, Jones Intercable Company over to Falcon Cable Media. NCGS105-283 of the Machinery Act requires that property be appraised at "true value"; however, not all property involved in a business transaction is subject to taxation as tangible personal property. In most instances of operating businesses changing hands, the overwhelming maj ori ty of the sales price involves intangible values, largely self-created by the buyer in his evaluation of existing circumstances. Some, but not necessarily all, of the intangibles involved are the right to do business, subscriber relationships, customer lists, marketing and programming contracts, lease agreements, management and operating systems, work force in place, going concern value, deferred, start-up and prematurity costs, vehicles, covenants not to compete, expansion potential, franchises and goodwill. None of these are taxable as tangible personal property. The impropriety of taxing self-created intangibles has been clearly addressed in a recent Court of Appeals of North Carolina decision. A copy of the decision involving Edward Valves, Inc. v. Wake County, and Emmett Curl, Wake County Assessor, No. 9410SC290, January 3, 1995 is attached. Essentially, this is a case in Wake County concerning intangibles that were created by an asset sale. The Judge rendered the decision that the intangibles should be a value. The age and condition of the actual tangible personal property being valued at the time of sale does not change. In instances where value indexing, which is adjusting by an annual percentage to NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 875 accommodate inflation, is used by taxing authorities to manipulate original costs of acquisition, the value of tangible property at the time of transfer to a new owner, is theoretically correct "true value wise" by virtue of having been adjusted each tax year. The assessable value takes into consideration, whether acquired by stock or asset purchase, the conditions of NCGS 105-317.1 of the Machinery Act. This recognizes the wear and tear and resultant diminution of life and usefulness of the tangible asset in service. In the case of CATV these Historical (original) Costs "Percent Good Factors" (depreciated values) are covered in the N. C. State Department of Revenue schedules on Pages 17 and 18 of the booklet. The methodology advanced by New Hanover County in this case ignores the age and condition of the tangible personal property involved and elevates the value of these assets to that of brand new items. They proposed the used assets acquired by Falcon in 1988 be valued and assessed at newly purchased prices, without earned depreciation. Please note the N. C. State Assessor's Manual states under "New Owner of an Existing Business" that in either case of a stock or an asset purchase, the first goal in making the appraisal is to use the actual historical installed cost. The N. C. Department of revenue would not have emphasized this point unless this was the correct method. The fact that a company changes hands certainly does not magically make a used machine or component "new" or extend the useful life to that of a truly new, unused tangible asset. This methodology directly conflicts with state and federal tax uniformity requirements. For example, there is nothing uniform in a situation where two identical machines, each approximately ten years old, are assessed and taxed in the same county at totally different values simply because one was retained by an original purchaser, and the other changed hands from an original purchaser ten years later. Using current N. C. Cable Television Valuation Tables, one machine would be assessed to a new owner at 90% of the new value while the other, exactly the same in age and use, would be taxed at 25% of the new value. The County proposed method attempts to assign different useful tax life years to the exact, same class of tangible assets when owned by different taxpayers. The net effect in this example is that the useful life assigned to the Falcon purchased machinery is 20 years while the useful life assigned to the same machinery, if held by the original purchaser, would be 10 years. It is obvious the County and TMA knowingly and deliberately applied substantially different, thus non-uniform, values to the exact, same type and age of tangible assets in this County. To further illustrate the inequity of attempting to not honor earned depreciation, please note the following figures. At the time Falcon acquired the Jones property in 1988, the total subscribership to that cable system was 4,981. The system had 94.6 miles of overhead cable and 35.67 miles of underground cable at the end of 1988 to serve those subscribers. Since 1988, Falcon has spent approximately $1.2 million in system replacements, improvements, and upgrades. A majority of the funds were spent in the first two and one-half years of operation in 1988, 1989, and 1990. Falcon had to totally retire the $370,000, over one-third, of the old Jones System in the first two and one- half years. Well over half of the value of the existing Jones System was retired before 1994. The majority of this was for the distribution system and subscriber connections. Very clearly the machinery and equipment were deserving of every bit of the deprecation its age had earned. Incidentally, although the mileage of the system has been increased by 31.5 miles through 1994, the subscriber count has increased by only 266, to 5,347 by the end of 1994. Hopefully, NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 876 they are much more satisfied than the subscribers in 1988, who were having to cope with a system that was close to the end of its useful life. It should be noted that the "last sale" valuation approach proposed by the County and TMA has been addressed and disallowed in an unanimous decision by the U. S. Supreme Court as a violation of the equal protection clause of the Fourteenth Amendment. A copy of that decision is attached (Allegheny pittsburgh Coal Company v. County Commission of Webster County, West Virginia. 488 us 336,102 L Ed 2nd 688, 109 S Ct. 633, dated January 18, 1989.) Germane to this matter, the previous owner, Jones Intercable Company had reported their tangible assets to New Hanover County for many years previous to the Falcon purchase. Their returns were apparently accepted without question by the County. The last return submitted by them in 1988 (for the 1987 tax year) was for a county-wide total cumulative acquisition (Historical) cost of $848,099. After acquiring the assets, Falcon added $62,951 in replacements and improvements in 1988. Accordingly, Falcon should have reported $911,050 as the historical tangible personal property on their initial tax returns to the County in 1989. Instead, they reported a total of $1,965,972, which was $1,054,922 more than was indicated by the historical costs listed by Jones and the Falcon additions for that year. I believe this was an erroneous allocation of a portion of purchase allocation numbers which contained self-created intangibles arising from the purchase. This fact was so stated to the County Tax Administrator. (Jones 1988 and Falcon 1989 returns are contained in the Booklet.) The erroneous allocation was compounded by an employee inexperienced to N. C. tax returns who listed the total of all tangible personal property in the system as being acquired "new" in the year 1988. In other words, the employee placed everything on the 1988 line completely ignoring the actual historical acquisition dates and amounts. The County and TMA have ignored, or rejected our contention, that this inexperience and error created incorrect 1989 returns, and they purport to accept the 1989 returns as correctly rendered. Therefore, their assessment and the subsequent amount of the tax bills are perfectly correct. In North Carolina there are two terms used in the tax law, one "appraisal" and the other "assessment". The reason for the two terms is that the appraised value, normally the true value, lS treated under assessment by a different valuation method. The law takes into consideration the condition of the property, the age of the property and other things to determine an assessed value. The tax manual provides definitions of the two terms. We do not believe the County examined the 1989 returns carefully when they were filed. Also, for obvious reasons, we feel certain the alleged later audit inspection of the return by TMA, and subsequent endorsement by the County, was either not done, or the examiner(s) were incompetent at worst, careless at best, or the information on the return deliberately ignored for self-serving reasons. The fact is that had due diligence been observed, the returns would have been rejected for error at the time of filing. Mr. Gore requested the Commissioners to examine the copies of the 1989 returns. Note that the inexperienced employee preparing the returns not only listed everything in the system as acquired new in 1988, but she also listed everything on the returns as disposed of ln 1988. The net result was to simply zero out everything. This is not being brought out to embarrass a County employee. Certainly Falcon is more embarrassed than anyone else about submitting such improperly executed documents. The point is that, NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 877 with this glaring example, the County and TMA should not reject our contention that very basic errors were made in preparing the returns. The competence of the person(s) inspecting the return is suspect. The County and TMA certainly lose the presumption of correctness in their 1989 forward value assessments, which are based at least in part, on the information contained in the 1989 returns. They simply did not do their jobs. The Falcon 1990 returns did not repeat the total wipe-out deletions error of the 1989 returns, but the machinery historical acquisition errors and valuations continued. The same employee prepared these returns both years. Also, it was noted the employee failed to list Falcon deletions (disposals) which took place during 1989. The historical cost and valuation errors were detected at the time the 1991 return was developed for the 1990 tax activity, and the appropriate corrections, based on the previous years of Jones Intercable filings, were made. The alleged discoveries are the results of these corrections. The County and TMA rejected the Jones Intercable historical values offered by us on the strange, at least to us, basis that the County had not audited Jones or questioned any of their annual tax returns over the years. This does not appear to be a credible position. The County had the right and the duty to audit Jones or to challenge the individual returns at any time, before or after the sale to Falcon, if it had a question as to whether they had been correctly reported. In view of never questioning the returns or availing themselves of existing value determination procedures to verify accuracy, their failure to do so must be considered as their acceptance of the returns as correct. The County and TMA had no reason not to accept the Jones values as the starting point for the Falcon assessment. Accordingly, the correct method for calculating the starting net assessment value in this case is to recognize the historical values reported by Jones, add the Falcon actual system expenditures in 1988, and apply the appropriate North Carolina life in years, trend, and percent good factors. To use the methodology proposed by the County and TMA would be to give different tax treatment to taxpayers owning identical classes of property. In September, 1994, we met with the Tax Administrator. At his direction the meeting was held at the offices of TMA in Charlotte, N. C. This meeting was apparently set to satisfy the statutory retirement for an assessor/taxpayer pre-hearing meeting. During the meeting, in a discussion of the Jones tax returns, either Mr. Register or the TMA auditor expressed some skepticism of the historical values listed by the previous owner. Although we did not have reason to agree with that skepticism, I felt this might provide an opportunity to make a good faith attempt to fairly settle this appeal without the necessity of going through formal hearing procedures and possible litigation. I agreed to submit, within two weeks, a proposal or proposals which could be used to bridge our respective positions. I met my commitment and submitted three different approaches, anyone of which we felt were more than generous from our standpoint, and the letter of the law as we understand it. A copy of the transmittal letter of September 20, 1994, and copies of the proposals are attached in the folder. In agreeing to relinquish some of our taxpayer rights, we were willing to accept one settlement, which would cost us some money, even though we believe we are actually entitled to refunds for over assessment. The County has refused to go back to 1989 and reopen this year because the County owes us money. The high costs of time, travel, legal fees, and other such by-products of prolonged wrangling sometimes make a more adversely unbalanced settlement attractive to the taxpayer simply because it is far less expensive NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 878 to settle than to proceed with litigation. However, after a long delay and no discussion, our proposals were rejected. It is my opinion the Tax Administrator and TMA are both aware, as professionals in this field, that their proposed discoveries and the general procedures surrounding this assessment, intentionally did not meet constitutional requirements for uniformity in taxation. with the power of presumption of correctness cloaking their position, and the knowledge that few taxpayers can afford to engage in protracted negotiations or to litigate, they apparently do not feel an urgency or necessity to fairly settle. I believe their actions violate the civil rights of Falcon Cable Media. To illustrate the non-uniform tax valuations arrived at by the County and TMA, we submit a copy of a letter of December 17, 1992, signed by the Tax Administrator regarding another CATV company audit. This other company had similar machinery and equipment to that in the Falcon system at the time the Jones Intercable System was acquired. Note in the second paragraph of the letter, the Tax Administrator acknowledges that the County has not established actual costs for the distribution system, but agrees to accepting a valuation, apparently Replacement Cost New, of $9,200 per mile for overhead cable and $10,400 for underground cable. One of our three proposals submitted to the County offered to accept these amounts per mile for 1988 as a basis for settlement and was rejected. The proposed County method results in valuing each overhead mile of the Falcon system at $13,033 and each underground mile at $13,243. In 1989, Falcon reported 35.67 miles of underground cable at $1,208,000 which calculates to $33,866 per mile. The 96.4 miles of overhead cable was reported at $425,044 per mile. This was a glaring error and should have been caught during the audit. Instead of more than $1.7 million, the evaluation given by the assessor to Vision Cable, the other cable company located in New Hanover County, using the same 130 miles for comparison, the same overhead and underground, resulted in an assessment slightly over one million dollars, which was over $500,000 difference in the assessed values. For a comparison of the per mile average, in 1988 Jones Intercable reported $6,568 per mile. The Tax Administrator gave to Vision Cable $9,548 per mile, and Tax Administrator is trying to assess Falcon $13,117 per mile for 1988. This is not a uniform method. with different terrain, different labor costs, and different material sources, the cost per mile of cable for these two systems are virtually in the same locations with virtually the same type of machinery, and the audits were running at virtually the same dates. There cannot be an approximate $4,000 per mile of value difference in overhead cable, and nearly $3,000 in underground cable between the two systems. Falcon cable mileage at December 31, 1988 was 130 miles. The County's proposal would raise the 1988 Falcon valuation $500,000 over the same 130 miles of the other CATV company's distribution lines. The $500,000 carries forward each subsequent year; therefore, the overall taxable asset impact is into seven figures for a number of years. This situation certainly cannot be equated to uniformity in taxation. The discoveries by TMA and proposed by the Tax Administrator on December 28, 1992, are based on the flawed methodology outlined herein. I urge the Board to disallow these in totality because we believe our reporting to be accurate. It is the desire of the company to bring this matter to an end at this hearing. Even though, we are confident of the correctness of our present position, we again offer to accept for settlement any of the three proposals which were sent to the Tax Administrator last September. NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 879 Mr. Gore passed out copies of the three proposals Commissioners and presented the following overVlew: to the Proposal I Historical Cost: Using the historical cost and distributing that cost forward. This proposal would have costs the County money; therefore, another proposal was developed. Proposal II - Mileaqe: The $9,200 per mile figure was used with 10,400 miles of underground that had been given to the other cable company in 1988. This figure was spread back from 1988 on a historical basis with a figure established. Proposal III - Jones Intercable: Falcon will agree to accept the erroneous allocation filed by the company in 1989 contingent upon assessment of these assets at the depreciated values. The Jones percentage was used with increasing the amount by the erroneous filing which will cost Falcon Cable money. Falcon feels basically no money should be paid to the County; however, the company is willing to settle for this amount to settle the matter. Mr. Gore reported in summary, he felt Proposal III was a fair offer, and he expressed appreciation to the Board for hearing the appeal. Based on the tax appeal presented by Mr. Gore, the Tax Administrator presented the following comments: (1) On the 1989 listing, the signature on the form was that of James Ashyen, the Controller of Falcon Cable Media in 1989. The unskilled employee was Adeienne Wilson. When Mr. Ashyen signed the tax listing form, he stated, "under the penalties prescribed by law, I hereby affirm that to the best of my knowledge and belief this listing, including any accompanying statements, inventories, schedules, and other information is true and complete" . Also, Mr. Ashyen is the managing partner of a survivor of Falcon Cable Media. When Falcon Cable split again in the early part of 1992, Mr. Ashyen was the surviving managing partner. It is difficult to believe that he is just a flunky because he has attested to the truth of that information. (2) When making an appraisal for a new owner of an existing business, the Tax Department does use the actual historical installed costs if the information is available. Falcon Cable was requested to provide 1987 and 1988 Jones Intercable information, which was never provided to the Tax Department or to TMA. There are situations where requesting information of this type is not a viable alternative, and in these cases, the appraiser must use his or her best judgement as to what represents market costs. To fail to consider a going concern cost is to ignore the requirements of NCGS105-283, which would be the market value. (3) In rejecting the information provided by Mr. Gore at the meeting in Charlotte, there was great concern about Falcon Cable Media not revising income tax returns that were greatly in conflict with the information seen in the audit. After discussion with the N. C. Department of Revenue, the decision was made to reject the approach, and in turn, the County would perform its own review outside TMA to determine if there was an underlisting in the State. From income tax returns, the County did not consider goodwill, franchise fees, deferred cost, buildings, and vehicles, but looked only at the items called CATV assets on their income tax returns for depreciation purposes. After a complete review, it was determined that Falcon Cable had underlisted an average of approximately $5.4 million for four years in the State of North Carolina. Those returns for income tax purposes were signed by James Ashyen, the current managing partner. It NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 880 appears that Falcon Cable Media has determined a market value of the cable company to be in far excess of what would have been determined by TMA. (3) When discussing the negligence of an auditor, the person in that position was hired in 1986 and audited for less than six months before being assigned to another job. It was not until June, 1991 that a contract was executed with TMA to begin the audit process. During that interim period of time, two clerical employees were reviewing the listings with no accounting backgrounds; therefore, it was not negligence on the part of the Tax Department. (4) North Carolina law allows an audit to be conducted for the current year and five prior years; hence, there lS no requirement by State law that an audit of a business must be performed every year. Audits can be performed in cycles. (5) The companles had great difficulty in providing the information for the audit. A year was involved in trying to obtain the information to perform the audit. Yet, the two companies, under the same name, are located two blocks apart wi th one company preparing Vision Cable returns and one company preparing Falcon Cable returns; however, the companies had no difficulty in comparing notes during the audit. When trying to perform the audit of both companies at one time in January, 1992, the company made it so difficult it was not until November and December that the Tax Administrator and TMA auditor were able to schedule the audit. This was only at the insistence of the Tax Administrator threatening to make a decision if the company did not comply to the audit. The company first reported the information was sent to the wrong address for Falcon Cable with referrals to other companies for a period of six to seven months. As noted, the TMA auditor had a great deal of difficulty in contacting Mr. Gore. He was not present when the auditors visited the company. The information requested to substantiate the values of Jones Intercable Company were never made available to the Tax Administrator nor to Mr. Tom Tucker of TMA. (6) There is a discrepancy between the value of overhead cable and underground cable of the two cable companies. When Mr. Tucker performed the Vision Cable audit he performed the audit based on the best information available. Mr. Tucker found conflicting information on ledger notes and was able to determine that Falcon Cable considered their value of overhead and underground cable to be almost twice as much as determined by Vision Cable. Vision Cable was assessed basically at 90% considering that the cable system itself was 90% of the value of the entire system. Vision Cable was then discovered for 90% of the cable value because there were no records to substantiate the value. The Tax Administrator and auditor used a judgement call to determine a value. Tax Administrator Register reported he would be willing to take the values on the income tax returns and factor back to 90% of the value and adjust any part of the discovery. However, after discussion with the N. C. Department of Revenue and staff members of the Tax Department, it was felt the spread sheet (marked Exhibit 2 in the agenda packet) reflects that in four counties where Falcon Cable listed, the listings dropped significantly in value when the Tax Research Division took over the listings. The man who is the current managing partner of Falcon Cable did not feel there was anything wrong with the listings he had made; however, when hiring a tax representative it was determined that the values made by the comptroller and an owner at that time were not accurate. Tax Administrator Register expressed concern in accepting these types conflicting statements and reported it was difficult to believe that a company as large as Falcon Cable would not have authoritative records for the auditor to reVlew and make a NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 881 different conclusion other than the decision rendered. Tax Administrator Register reported the issue presented by Mr. Gore pertaining to the case in Wake County about taxing intangibles has been appealed by Wake County and no decision has been rendered. As to the Phillip Morris case, Mr. Gore was under the opinion that contracts with TMA were judged to be illegal in North Carolina, which is not the case. The Supreme Court stated it was not the business of the Property Tax Commission to determine what was best in the public interest, and stated the TMA contract was valid. If the General Assembly had desired to make it illegal, it would have been so stated in the enabling legislation. The County contract with TMA is valid, and the Supreme Court remanded the Phillip Morris case back to the Property Tax Commission to be settled for an amount, not the legality of the audit. There are cases in other states regarding subscriber connections with the general consensus that subscriber connections from the pole to the house, and inside the house are of no value to the cable company; however, the value of the converters inside the house and the value of the switching units on the poles are of value to the cable company. Consequently, there is a partial value in the audit; however, without the necessary records to split out this value, it cannot be determined. Falcon Cable's records reflect that 20% of the costs are for converter cost with 80% of the cost for the wire from the pole to the house. This appears to be a discrepancy because the converters and switching units on the poles would have a greater value than a piece of wire strung from a pole to a house. This, again, is another item that clouds the issue. Tax Administrator Register reported if TMA was removed from the tax appeal process, and the judgement received from the N. C. Department of Revenue was used, which reflected a gross underlisting in four counties based upon income tax returns, he would recommend the following action: (1) Allow the N. C. Department of Revenue to be the mediator in the tax appeal since four counties are involved with the underlistings. (2) Allow Falcon Cable Media to appeal to the N. C. Property Tax Commission. (3) Allow the N. C. Department of Revenue to obtain the necessary information from Falcon Cable Media, Inc., Jones Intercable, and Vision Cable with a recommendation made by the Department of Revenue to the Property Tax Commission. Tax Administrator Register reported if New Hanover County and Falcon Cable consent to this action, there will no litigation or hearing before the N. C. Property Tax Commission. The Property Tax Commission will simply sign an order and direct the Tax Department to follow through with the agreement. Tax Administrator Register commented on concern expressed by Falcon Cable for the costly process of litigation and stated it was also costly for Falcon Cable to hire tax agents to prepare tax returns. He reported it was good business for a company to hire professionals, such as Mr. Gore, who is an expert in his field; however, it would be more advantageous for Falcon Cable to hire people like Mr. Gore to prepare the tax returns. It is interesting that no officer of Falcon Cable has signed a return that was prepared by Mr. Gore's firm; therefore, the company has not attested to the truthfulness of the returns. NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 882 Further discussion was held on the underlistings ln New Hanover County. Vice-Chairman Mathews inquired as to the percentage of underlisting in New Hanover County. Tax Administrator Register responded 22.86% He reported Exhibit 2C reflects the values by the townships with the figures trended based on the age shown on the income tax returns with the calculation of a penalty in the amount of $8,523.05 and taxes due in the amount of $37,300.89 for a total $45,823.94. Based on the findings with Vision Cable, this company did not challenge the audit or the penalty. Chairman Greer inquired as to whether the same formula was used when auditing Vision Cable? Tax Administrator Register responded the same formula was not used. Vision Cable did not have information available, the same as in this appeal with Falcon Cable, and it was decided to consider the cable as 90% of the value of the entire system with the discovery based on these figures. He reported in this appeal, he would be glad to take the results of the spread sheet, marked 2C, and factor it to show that 90% would be the value that should be the discovery considering that was the value of the entire system, which is same method used for Vision Cable. Commissioner Barone inquired as to 90% of what figure? Tax Administrator Register responded the total column on the 2C spread sheet would be factored at 90%, which would equal $33,570.70 for the tax and $7,670.74 for the penalty representing a grand total of $41,241.44. As part of the recommendation, he would acknowledge he was a party to a delay; however, Falcon Cable and Mr. Gore's firm were a party to the delay; therefore, he would recommend releasing half of the penalty in a separate order. Further discussion was held on allowing the N. C. Department of Revenue to become the mediator. Tax Administrator Register reported the personal property specialists with the N. C. Department of Revenue, who is an expert in the field, would review the records to determine if the proper information had been furnished. If Falcon Cable did not provide the necessary information to the N. C. Department of Revenue, the New Hanover County Attorney, New Hanover County Tax Administrator, and County would have the right to move for dismissal of the case. Under the Property Tax Commission, a full disclosure must be presented within ten (10) days before the actual hearing, or the County can move for dismissal of the appeal. As a Tax Administrator, he feels the N. C. Property Tax Commission and the County can make a better determination of the value, the uniformity, and whether or not there are constitutional issues. The Department of Revenue does have an attorney who serves as the counsel for the Property Tax Commission. Commissioner Barone commented on hearing that some of the property was taxed at 25% of the value because of age, and she asked if this was relevant to the 90% value just mentioned? Tax Administrator Register advised there was no relevance and explained the issue was trending schedules. He reported the ideal way to value companies equally was through the original historical costs by the original owner. The historical costs must be by the year of acquisition with those records being kept and carried forward. Then in the case of an acquisition, such Falcon Cable, those acquisitions in 1988, 1989, 1990, 1991, etc. would be added as acquisitions in those years. Every year the trending schedules are moved forward under a 10-year life with a 92% factor for the first year and moving downward through the cycle. The trending schedules are uniform schedules provided by the State of North Carolina. If the original costs are not available, then those NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 883 costs cannot be Department has substantiate the records had been applied back to the original years. The Tax not had access to the original records to actions of Jones Intercable. If the original furnished, the value could be determined. Mr. Gore stated the information and exhibits just discussed were never furnished to him. He advised that New Hanover County served alleged discoveries on Falcon Cable based on a cost appraisal basis. This was the reason for calling the tax appeal hearing. Now, the Tax Administrator is taking an entirely different approach which bears no relationship to the approach that has been worked on for the last four to five years. A number of misstatements have been made by the Tax Administrator; however, this appeal is being made based upon the discoveries. Mr. Gore expressed concern for the Tax Administrator trying to combine a federal income tax return and a tangible property statement, which is very difficult to accomplish. He requested the Board not to consider the testimony just presented by the Tax Administrator because the information was not furnished to him. He reported the Tax Administrator was requested in writing to furnish the information that was to be presented. Since the information was not furnished to him, it would be totally improper to accept this testimony because it is unfair for a taxpayer to come to a tax hearing prepared to defend and explain the position on the basis of information and discussion that has occurred for several years. Mr. Gore expressed concern for comments relative to Intercable documentation and stated he did not have information. He stated this documentation should have obtained when they owned the system. Jones that been Commissioner Sisson asked Mr. Gore if Falcon Cable acquired the company without a declaration of assets? Mr. Gore responded he was not aware of what information was received. There were no asset listings and he was told by Falcon Cable that Jones Intercable had this information. When the system was purchased from Jones Intercable it was in poor shape, and Falcon Cable was aware of the fact that the system would have to be replaced. Commissioner Barone inquired as to the value of a system and asked if it was the number of subscribers? Mr. Gore responded the value of a system was its subscribers, and he reported intangibles cannot be worth anymore than what it costs to put the system in place, which is known as "replacement costs new". When becoming involved in this type of situation, the company is willing to take replacement costs new to re-establish a new cost in cases where the old costs is questioned. Falcon Cable offered to take replacements costs new with TMA from the beginning of the audit; however, no response was received. Letter after letter was forwarded to the Tax Administrator to discuss this matter, but the letters were forwarded to TMA in Charlotte. He, also, expressed concern for the use of Falcon Cable's confidential information by TMA to contract with other counties, which in his opinion was an outrageous procedure. Chairman Greer informed Mr. Gore that his company could be viewed in the same manner as TMA because both firms were continually seeking contracts with taxpayers or counties to make money. Mr. Gore reported the lack of uniformity had been proven beyond any doubt. Within a two-week period in December, 1992, the County assessed Vision Cable and did not assess this company for drops and converters. On the Falcon Cable general ledger listing, there was an item entitled, "Subscriber Connections", which NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 884 includes the turn-on and turn-off fees as well as the other items needed to provide service to the house. The County did not charge Vision Cable for turn-on and turn-off fees on the basis they did not know about these fees. Mr. Gore stated, in summary, New Hanover County should not have tried to use a different approach, which does not provide uniform appraisals as required by federal and state taxing uniformity statutes. The Tax Administrator has completely changed courses, and this information should not have been presented at the tax appeal hearing since he and Falcon Cable were not aware of what would be discussed. Commissioner suggested amounts could provide the Falcon Cable out meeting? Barone commented on recelvlng Mr. Register's for penalties and taxes and asked Mr. Gore if he Board with what proposal would be acceptable to the three proposals he had presented at the Mr. Gore responded two of the require a refund to Falcon Cable. The require Falcon Cable to pay $6,000 in would be acceptable to Falcon Cable. proposals presented would third proposal, which would discoveries plus penalties, Commissioner Barone inquired as to the amount of the refunds ln the first two proposals? Mr. Gore responded he did not have the exact figures on the refunds. He requested the Commissioners to make a decision based upon the information presented on the cost approach method, and he strongly objected to changing the method of appraisal at the last moment, which was contrary to any situation he had incurred in handing tax appeals. Discussion was held on the three proposals presented. Tax Administrator Register advised the Board that Proposal III was the best of the options presented; however, this option was based on allocating costs back to years where no audit had been performed on Jones Intercable. Proposal III would use the current market value of the business and allow depreciation for the 1988 acquisition cost and allocate this cost back, which would provide for only 25 percent of this figure. Tax Administrator Register reported the income tax returns furnished show that goodwill, franchise fees, deferred costs and other costs were not considered by the County. The County looked solely at CATV assets. As to changing the method used, a letter was forward to Mr. Gore on October 18, 1994, which reads as follows: However, by statute, "all property shall as far as practicable be appraised or valued at its true value in money. . . . .market value, that is the price estimated in terms of money at which the property would change hands between a willing buyer and willing seller..... (without compulsion to buy or sell.)" It appears that Falcon Cable has determined a market value that is in significant conflict with the cost. Following discussions with staff, we believe the Property Tax Commission will lean heavily on the income tax return to indicate the market value at the time of purchase in 1988. Tax Administrator Register reported that was a verbal note from Mr. Tom Tucker advising that he had requested Mr. Gore on two occasions to see if Falcon Cable would be willing to alter and amend the income tax returns with the response that Falcon Cable would not be so inclined. On July 28, 1995, Mr. Gore was notified of the meeting date and advised that County exhibits as well as his exhibits would require preliminary review at the hearing with the Board of County Commissioners seeking advice from the Legal Staff NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 885 before and at the time of the hearing. The Board does not attempt to conduct an audit or resurrect an audit that has been conducted. Also, Mr. Gore was informed of the County's references which would be directed toward the listings submitted; comparisons with audit decisions; income tax information and listings from other counties, which reflects a state-wide underlisting by Falcon Cable. Mr. Gore was informed he had access to this information, therefore, the Tax Department would provide him with the materials gathered. Tax Administrator Register reported Mr. Gore had access to the information used in making his analysis and the second recommendation. The purpose for using the second recommendation was because Mr. Gore desired to discredit the work of TMA by saying TMA had used a flawed methodology. He reported he did not feel the method was flawed, and TMA made the best determination with records provided by the offices of Falcon Cable. Mr. Gore pointed out that Mr. Register did not read the entire letter written to him on May 1, 1995, and he read the following portion of the letter: "I conclude that a conservative discovery was made following the work of TMA. We are not convinced that your expressed concerns override other facts to which we have access. As a result, I am not inclined now to reopen the determinations given to you on December 28, 1992, nor to revise the decision outlined at that time." Mr. Gore reported it was very obvious the Tax Administrator was using the same decision, and this was the reason for the tax appeal. Motion: After further discussion, Chairman Greer MOVED, SECONDED by Commissioner Sisson to uphold the discovered values by year and by classification as stated in the Tax Administrator's letter to Mr. Charles E. Gore on December 28, 1992. Substitute Motion: After discussion of the replacement costs involved with acquiring a system, Commissioner Barone MOVED to use a 50% valuation of the $45,823 which would equal to $22,912. The floor was opened for discussion. Chairman Greer reported the Tax Administrator was not uSlng the figures based upon income tax findings. The SUBSTITUTE MOTION FAILED due to not recelvlng a SECOND. Upon vote, the ORIGINAL MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Caster Commissioner Sisson Vice-Chairman Mathews Chairman Greer Voting Nay: Commissioner Barone Motion: Chairman Greer MOVED, SECONDED by Commissioner Sisson to reduce the penalties by 50% because of delays created by the Tax Department and Falcon Cable's representative. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Caster Commissioner Sisson Vice-Chairman Mathews Chairman Greer Voting Nay: Commissioner Barone NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 886 BREAK Chairman Greer called a break from 11:30 A.M. until 11:38 A.M. APPROVAL OF INMATE CO-PAYMENT PROGRAM FOR NEW HANOVER COUNTY JAIL MEDICAL SERVICES Heal th Director, Robert E. Parker, reported the Board of Health voted to implement the "Inmate Co-Payment Program" as outlined in House Bill 1018 to provide medical care for prisoners in jail. He reported each unit could establish fees of not more than $10.00 per incident for the provision of non-emergency medical care to prisoners. Director Parker reported the policies and procedures to implement the program had been prepared and reviewed by the Legal Department. All policies indicate that medical care will not be refused due to the inability of an inmate to pay for the service. Sheriff Joe McQueen reported he was very much ln favor of implementing the Inmate Co-Payment Program because of the number of unnecessary medical calls being received from inmates who have medical insurance coverage and money in their jail accounts. He stated, in his opinion, charging this minimal fee to inmates with the ability to pay will reduce some of the costs that are now incurred by the County. Commissioner Barone inquired to the type of procedure that would be used to waive fees for an indigent inmate? Sheriff McQueen responded this should not be a problem because the jail personnel will know if the inmates have money. Also, if an inmate returns to the jail, the bill will remain on file and the money will be collected at that time. Motion: Vice-Chairman Mathews MOVED, SECONDED by Commissioner Sisson to approve the Inmate Co-Payment Program as recommended by the Board of Health and ask Sheriff McQueen to request the Judges to make payment of outstanding jail health accounts as part of an inmate's sentence. Upon vote, the MOTION CARRIED UNANIMOUSLY. APPROVAL OF CONTRACT #95-0368 WITH COASTAL HORIZONS FOR OPERATION OF THE DAY SENTENCING CENTER Deputy County Manager, Andrew J. Atkinson, reported the Criminal Justice Partnership Board examined the following ways to staff the Day Sentencing Center: (1) hire County employees; (2) form a new non-profit corporation; or (3) contract with an existing agency. After a thorough review, the Criminal Justice Partnership Board determined that contracting with an existing agency would be more sensible economically and operationally. Requests for Proposals were submitted and only one response was received from Coastal Horizons. It was felt the proposal was reasonable, and the Criminal Justice Partnership Board voted unanimously to recommend awarding the contract to Coastal Horizons. State grant funds will be used for the operational costs of the Center. Motion: Commissioner Sisson MOVED, SECONDED by Commissioner Caster to approve the contract with Coastal Horizons for the operation of the Day Sentencing Center and authorize the County Manager to execute the contract documents. Upon vote, the MOTION CARRIED UNANIMOUSLY. A copy of the contract is on file in the Legal Department. ACCEPTANCE OF CRIMINAL JUSTICE PARTNERSHIP GRANT AWARD AND APPROVAL OF BUDGET AMENDMENT #96-0019 Deputy County Manager, Andrew J. Atkinson, reported the Department of Correction had notified the County of a grant award in the amount of $23,060 for the grant period from August 1, 1995, through June 30, 1996, and $12,080 for the grant period from July 1, 1996, through June 30, 1997. The funds will be used to determine if the operation of the Day Sentencing Center has made an NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 887 impact on the Criminal Justice System. Dr. Liz Marciniak, a Professor at uNC-Wilmington will conduct the evaluation and establish on-going procedures for the Day Sentencing Center to continue evaluation after the two-year grant period. No County funds are required. Motion: Commissioner Sisson MOVED, SECONDED by Commissioner Caster to accept the grant award in the amount of $23,060 and approve the following Budget Amendment. Upon vote, the MOTION CARRIED UNANIMOUSLY. 96-0019 - Criminal Justice Partnership Debit Credit Criminal Justice Partnership Criminal Justice Grant $23,060 Criminal Justice Partnership Contract Services Supplies Capital Outlay $14,830 3,230 5,000 Purpose: To budget the grant awarded for the "Evaluation and Review of Overall Program Results". COMMITTEE APPOINTMENTS Appointment of Dorothy L. Grime and Reappointment of Edith Ann Bell Steele to Serve on the Domiciliary Home Community Advisory Committee Chairman Greer reported that two vacancies exist on the Domiciliary Home Community Advisory Committee with two applications received from Dorothy L. Grime and Edith Ann Bell Steele, who desire to be reappointed. Motion: Commissioner Barone MOVED, SECONDED by Commissioner Sisson to appoint Dorothy L. Grime to serve a one-year initial term on the Domiciliary Home Community Advisory Committee with the term to expire August 31, 1996, and reappoint Edith Ann Bell Steele to serve a three-year term on the Domiciliary Home Community Advisory Committee with the term to expire August 31, 1998. Upon vote, the MOTION CARRIED UNANIMOUSLY. Appointment of George H. Chadwick, III to Serve on the Wilmington/New Hanover County Insurance Advisory Committee Chairman Greer reported that one vacancy exists on the Insurance Advisory Committee and only one application had been received from a person qualified to fill the vacancy in the name of George H. Chadwick, III who would like to be appointed to another three-year term. Motion: Vice-Chairman Mathews MOVED, SECONDED by Commissioner Sisson to reappoint Mr. George H. Chadwick, III, to serve a three- year term on the Wilmington/New Hanover County Insurance Advisory Committee with the term to expire June 8, 1998. Upon vote, the MOTION CARRIED UNANIMOUSLY. Appointments to the New Hanover County Library Advisory Board Chairman Greer reported that four vacancies exist on the New Hanover County Library Advisory Board with only three applications received in the names of Lethia S. Hankins, Vivian-Sue Penn, and Ann W. Wilkinson. Dr. Penn and Ms. Wilkinson desire to be reappointed to a second term. Motion: Commissioner Sisson MOVED, SECONDED by Vice-Chairman Mathews to appoint Lethia S. Hankins to serve a three-year term and reappoint Vivian-Sue Penn and Ann W. Wilkinson to serve three-year terms with all three terms to expire August 31, 1998. The Clerk NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 888 was requested to re-advertise the vacant position. MOTION CARRIED UNANIMOUSLY. Upon vote, the Appointment of Josephine W. Little to Serve on the Nursing Home Advisory Committee Chairman Greer announced that one vacancy exists on the Nursing Home Advisory Committee with only one application received in the name of Josephine W. Little. Motion: Vice-Chairman Mathews MOVED, SECONDED by Commissioner Sisson to appoint Josephine W. Little to serve a one-year initial term on the Nursing Home Advisory Committee with the term to expire August 31, 1996. Upon vote, the MOTION CARRIED UNANIMOUSLY. MEETING CONVENED FROM REGULAR SESSION TO HOLD A REGULAR MEETING OF THE NEW HANOVER COUNTY WATER & SEWER DISTRICT Chairman Greer convened from Regular Session at 11:45 A.M. until 11:59 A.M. to hold a meeting of the New Hanover County Water and Sewer District. ADDITIONAL ITEMS - COUNTY ATTORNEY Adoption of Bond Resolution Providing for the Issuance of $30,000,000 General Obligation School Bonds, Series 1995 County Attorney Copley presented a Bond Resolution to the Commissioners and advised that Bond Counsel had just forward the resolution and requested adoption of the resolution. Chairman Greer requested a motion for adoption of the bond resolution providing for the issuance of $30,000,000 General Obligation School Bonds, Series 1995 of the County of New Hanover, North Carolina. Motion: Commissioner Caster introduced the bond resolution entitled, "Resolution Providing for the Issuance of $30,000,000 General Obligation School Bonds, Series 1995 of the County of New Hanover," a copy of which was submitted to the meeting and MOVED that it be adopted. Following the discussion of the Bond Resolution, Commissioner Sisson SECONDED THE MOTION and the Bond Resolution was adopted UNANIMOUSLY. A copy of the Bond Resolution is hereby incorporated as a part of the minutes and is contained in Exhibit Book XXII, Page 42. ADDITIONAL ITEMS - COUNTY COMMISSIONERS Discussion of Agricultural Operations Exempt from State Regulations Chairman Greer reported it appears that some of the tracts of land permitted for agriculture purposes are being used for development. This allows the developer to begin construction without having to comply to County ordinances. He expressed concern for the State issuing these permits, and he requested Staff to prepare a policy to make sure the land permitted was being used for agriculture purposes. County Manager O'Neal reported the criteria permitting agriculture or forestry uses was closely Machinery Act as how the property was viewed; however, glad to check into this matter and report back to the used for related to he would be Board. Discussion of Wellhead Protection Program Assistant County Manager Weaver reported a letter was being prepared to request the State to hold a one-day Work Session on developing a Wellhead Protection Program for New Hanover County. Once a date is determined, the Board will be notified. NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 889 Discussion of Road petition for Buck Drive and CarolYn Hill Drive Commissioner Sisson reported that Carolyn Hill Drive was issued an exemption to paving requirements by the Technical Review Committee. He expressed concern for this type of authority being given to the Technical Review Committee, and recommended decisions of this type being made by the Board of County Commissioners. Also, the Planning Staff has been concerned about the roads because the developer has never been willing to comply to the County's road standards. Since the roads do not legally exist, the persons living on the road have difficulty in subdividing and selling their properties. He requested Staff to check into this matter to see if the developer can be held responsible for maintaining the roads. Commissioner Barone inquired as to when the land was subdivided? Commissioner Sisson responded the original subdivision of the property occurred before the County adopted its Subdivision Ordinance. County Attorney Copley advised that past actions could not be rectified; however, future actions could be corrected. Consensus: After further discussion, it was the consensus of the Board for the County Attorney to check into this matter and report back to the Board. Further discussion was held on the Technical Review Committee being able to grant exemptions for paving of roads. After further discussion, it was agreed that Staff should provide a list of the items that can be approved by the Technical Review Committee. Discussion of Work Session to be Held by the Wilmington City Council on Consolidation Commissioner Sisson commented on the Work Session to be held by the Wilmington City Council on August 29, 1995, and asked if anyone knew the purpose of the meeting. County Manager O'Neal responded the meeting had been advertised as a Work Session to discuss the consolidation issue. Discussion of Consolidation Brochure County Manager O'Neal reported the consolidation brochure had been forwarded to the City Manager for a review by the Wilmington City Council. Once comments were received from the City Council, the brochure would be copied for distribution. If the City Council has difficulty with the wording of the brochure, perhaps, two County Commissioners and two City Councilmembers could form a committee to resolve the final language to be used in the pamphlet. Commissioner Barone requested the County Manager to move forward as quickly as possible with printing and distributing the brochure. Discussion was held on whether all five County Commissioners should attend the three meetings. Chairman Greer reported the City had announced the meeting as a Special Meeting and inquired as to whether the County had to advertise the meeting accordingly. Attorney Copley responded after discussion with City Attorney Pollard, the Mayor had requested the meeting to be advertised as a Special Meeting. However, this was not required by law because the meeting was for informational purposes only with no action to be taken. Consensus: After further discussion, it was the consensus of the Board to advertise the meeting as a Public Forum to receive comments from the public and answer questions relative to consolidation. NEW HANOVER COUNTY BOARD OF COMMISSIONERS REGULAR MEETING, AUGUST 21, 1995 BOOK 24 PAGE 890 Discussion of the Code of Ethics for New Hanover County Commissioner Sisson passed out a Code of Ethics for New Hanover County and reported each Commissioner should review the code to ensure he or she complies to this code when discussing a controversial issue or arguing about a particular item. Commissioner Barone reported a copy of the Code of Ethics was issued to each County Commissioner when elected to serve on the Board. ADJOURNMENT Chairman Greer adjourned the meeting at 12:15 P.M. Respectfully submitted, Lucie F. Harrell Clerk to the Board