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1993-12-16 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, DECEMBER 16, 1993 BOOK 23 PAGE 854 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, December 16, 1993, at 10:30 A.M. in the First Floor Assembly Room of the New Hanover County Administration Building, 320 Chestnut Street, Wilmington, North Carolina. Members present were: Commissioners Sandra Barone; William E. Sisson, Jr.; vice-Chairman E. L. Mathews, Jr; Chairman Robert G. Greer; County Manager, Allen O'Neal and Clerk to the Board, Lucie F. Harrell. Commissioner William A. Caster was absent. Chairman Greer called the meeting to order. County Manager O'Neal reported this is the last of six Budget Work Sessions scheduled to present a functional analysis of all County departments. He recommended scheduling another Budget Work Session in January, 1994 to discuss critical issues, provide direction to Staff for preparation of the FY 1994-95 Budget, and consider implementation of recommendations from the strategic planning process. Consensus: After discussion, it was the consensus of the Board to schedule a Budget Work Session on January 13, 1994, at 10:00 A.M. in Room 501 of the County Administration Building after the 8:45 A.M. Staff Meeting. Discussion was held on the need to schedule a Work Session for discussion of solid waste collection in New Hanover County. Consensus: It was the consensus of the Board to schedule a Work Session on Thursday, January 6, 1994, at 8:45 A.M. in Room 501 of the County Administration Building. Staff was directed to prepare an agenda packet containing the available options for solid waste collection in New Hanover County with this information being forwarded to the Commissioners in advance of the scheduled Work Session. OVERVIEW OF ENVIRONMENTAL MANAGEMENT The Environmental Management Fund is composed of the Waste-to- Energy Facility (WASTEC), Administration, and Recycling. Budget figures were presented on revenues and expenditures. Steam production is up, and the new contract with Carolina Power & Light Company should increase electric sales. The tip fee has been reduced from $60 per ton to $25 per ton which has reduced projected revenues by $3 million for the current fiscal year. This loss of revenue will be a major budget issue. Other items to consider during the budget process are as follows: This lS the first year that funds were transferred from the General Fund into the Environmental Management Fund in the sum of $1.48 million. This is the second year that funds have been transferred from the sales tax into the Environmental Management Fund in the amount of approximately $1 million. This money was originally earmarked for the Water & Sewer District. The refunding of bonds for WASTEC will yield a $1.6 million savings in the current fiscal year; however, the new debt service from the issuance of Special Obligation Bonds will be approximately $600,000 annually. Operation and maintenance costs have been reduced at the Waste-to-Energy Facility. The tip floor attendants have contributed to the reduction in maintenance cost since many steel and metal products are being removed from the pit. The projected NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, DECEMBER 16, 1993 BOOK 23 PAGE 855 maintenance cost for the current year was $900,000; however, this figure will drop to $585,000 for FY 1994-95. The maintenance plan lS on schedule and the facility is operating much better. Staff is examining the following options to address the severe shortfall in tip fees: 1) Subsidize WASTEC from the General Fund until the Courts determine if flow control is constitutional. 2) Increase the tax rate by approximately four cents to offset the projected loss in tip fee revenues. 3) Seek trash from outside the County. 4) Establish a County Collection System: The following variables will have to be considered if a County Collection System is established: Method of Payment: How will the haulers be paid? Sinqle or multiple vendors? Multiple vendors? Vendors: Do we want What will happen to single or the small Division of the County: How will the County be divided into districts? Contract: Do we negotiate or bid the contract for collections? Level of Services: Any contract negotiated should very clearly define the pickup of yard waste, white goods, and recyclable goods, in order to provide the same level of service to County residents as currently being provided to City residents. Handlinq of Commercial Accounts: Firms hauling commercial waste are located throughout the County; therefore, it would be difficult to establish districts for the haulers. Since commercial solid waste accounts for 70% of waste disposal, some method should be developed for handling commercial accounts. Role of the City: The City and County should work together jointly since the County has a Disposal System in place and the City has a Collection System in place. Chairman Greer stated, ln his opinion, if the County is to establish a Collection System, this system should be administered by the County. He suggested the following procedure: 1) Divide the County into areas and/or districts. 2) Contact the MIS Director to determine the cost to the County for billing customers. 3) Negotiate with the haulers to determine the cost for hauling in the designated areas including the pickup of yard waste and recyclable materials. 4) Bill the haulers on the actual tons carried to the incinerator. Discussion was held on the importance of establishing a commercial collection system since commercial waste accounts for 70% of solid waste disposal. Commissioner Sisson recommended establishing a two-tier collection system, one for commercial collection and one for residential collection. He reported the City currently is not recycling commercial accounts unless the NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, DECEMBER 16, 1993 BOOK 23 PAGE 856 volume is considered small enough to be picked up as a residential customer. Chairman Greer recommended offering a discount to commercial businesses who recycle. Commissioner Barone expressed concern for the small haulers feeling they will be put out of business with implementation of a County Collection System and suggested they be informed that the Commissioners do not intentionally want to run any hauler out of business. County Manager O'Neal reported these details can be discussed at the Work Session scheduled for January 6, 1994, and he emphasized the importance of decisions being made if a County Collection System is to be implemented by July 1, 1994. OVERVIEW OF WATER & SEWER DISTRICT The Water & Sewer District lS comprised of the following components: Water & Sewer Finance: This unit is funded out of the Enterprise Fund and is closely associated with the Finance Department for daily operational procedures and needs. The Finance Director for the District is Julie Griffin, the County's Deputy Finance Director. Water & Sewer Enqineerinq: This unit is responsible for sewer construction projects and is under the direction of the County Engineer, Wyatt Blanchard. Currently, there are 10,559 sewer customers; 81 water customers; 81 sewer pump stations; 2 separate water systems; and pending purchases that will provide for an additional 1,119 sewer customers; 1,555 water customers; 14 pump stations; and 6 separate water systems. Sources of revenue are received from user fees; tap fees, transfer of sales tax; appropriated fund balance and interest on investment. In summary, funds available for expansion are near depletion. Approximately $150 million is needed to sewer the entire County and $60 million is needed for a skeleton trunk system. Potential revenue sources are as follows: -District Tax -Increase the tap fee (presently $200 per house) -Increase impact fee (presently $375 per house) -Increase monthly user fees -Establish assessment fees -Room Occupancy Tax -Prepared Food and Beverage Tax -Land Transfer Tax -Construction Excise Tax Discussion was held on the construction of a Northside Waste Water Treatment Plant. Assistant County Manager, Dave Weaver, reported in order to use a Northside Waste Water Treatment Plant, the Ogden Interceptor will have to be constructed at an approximate cost of $5 million. Concern was expressed for the lack of funds available and the need to find revenue sources for this project. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, DECEMBER 16, 1993 BOOK 23 PAGE 857 Discussion was held on the current duration of the building boom. Commissioner Sisson stressed the importance of constructing the sewer system in the northern part of the County as outlined in the original plan before moving to other projects. Discussion was held on satellite annexation by the City. Commissioner Sisson inquired as to whether the City is actively pursuing this type of annexation and expressed concern for this being a way to resolve their financial situation? County Manager O'Neal reported he is aware of thoughts about areas that would be appropriate for the City to annex; however, he does not feel the City is moving quickly to annex any part of the unincorporated area of the County at this time. He stated he will check into this matter and report back to the Board. Chairman Greer commented on the County's sewer fee being lower than other municipalities and recommended increasing the fee as soon as possible. Assistant County Manager, Dave Weaver, reported Staff will be glad to prepare a recommendation. STATUS REPORT ON THE FLEMINGTON LANDFILL The County is still negotiating a draft Consent Decree with EPA. The technical issues of future monitoring are close to being settled with a 3-year monitoring period. The major issue is the $400,000 being requested by EPA for reimbursement of their costs, which will be shared by the eight defendants. It is hoped the final amount will be less. STATUS REPORT ON THE AIRPORT BURN PIT It is felt that EPA will notify the County that the Consent Decree must be signed or a unilateral Administrative Order will be issued. The $727,000 must be paid by the four responsible parties or this amount will greatly increase. Estimated cleanup costs could amount to $3.6 million over a period of six years depending on the required method and standards that must be reached. ADJOURNMENT Chairman Greer excellent review of meeting at 12:45 P.M. expressed appreciation the County departments to and Staff for an adj ourned the Respectfully submitted, Lucie F. Harrell Clerk to the Board