2011-05-02 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
BUDGET WORK SESSION,MAY 2,2011 PAGE 176
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Monday,May 2, 2011,
at 4:00 p.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington,
North Carolina.
Members present were: Chairman Jonathan Barfield, Jr.; Vice-Chairman Jason R. Thompson;
Commissioner Ted Davis, Jr.; Commissioner Brian M. Berger; Commissioner Richard G. Catlin; County Manager
Bruce T. Shell; County Attorney Wanda M. Copley; Clerk to the Board Sheila L. Schuh and Deputy Clerk to the
Board Teresa P.Elmore.
Chairman Barfield called the meeting to order and requested County Manager Shell give an update on the
proposed FY 2011-2012 Budget.
County Manager Shell presented an update on the information that he had provided at the April 14, 2011
Budget Work Session. The consensus from the meeting was that the Commissioners would not support a tax
increase of.55 cent. As a result, the proposed budget has been adjusted for the $1.6 million shortfall caused from a
reduction in business personal property tax values, more senior citizens qualified for homestead exemptions, and
less new vehicles purchases.
• Revenues
• Current and proposed tax rate of 46.55 cents
• Sales Tax revenue estimated to increase by$7.7 million from FY10-11 to FYI 1-12
■ $2.9 sales tax
■ $4 million in Article 42 sales tax
■ $800,000 in growth in general
• Fund balance of$3 million(increased an additional$250,000)
• Expenditure Highlights
• Impact on Installment Debt of$1.85 million
• CFCC net debt increased$5.1 million
• Remaining installment debt decreased$3.25 million
• Furlough eliminated=$1 million
• Funding for 1%merit=$600,000
• No net increase in General Fund positions
• Add one position in Elections(State recommended)
• Eliminate one position in Human Resources/Customer Services
• Salary lag=$400,000 (none previously proposed)
• Funding of DSS Automation project= $600,000
• Net County cost= $452,000
• Improves timeliness of claims and detects fraud
• An investment that should reduce the number of staff positions in the future
• DSS requested 13 new positions
• Increase operating funds for CFCC= $350,000(reduced from$500,000)
■ CFCC requested$1.1 million
• Decrease funding for NHC Schools= $250,000(no change)
■ NHC Schools requested$6.2 million
• Economic Development/Infrastructure=$300,000(reduced from$500,000)
• Contingency-$750,000
• Outside Agencies request for funding increased$700,000
• FY10-11 Funding=$863,000
• Board to determine funding
• Special Fire Service District Fund
• Tax Base=$12.7 billion
■ Value of a penny= $1.2 million
• Proposed Tax Rate=6.75 cents
• Increase of.75 cent from FY10-11 rate of 6 cents
• No fund balance appropriated in FYI 1-12
• FY10-11= $881,097
• Key Budget Changes for FYI 1-12
■ 3 new positions to put emphasis on stronger training and a volunteer coordinator
• Department requested 9 positions
■ Increased temporary salary line
■ Increased Volunteer Incentive Program(VIP)to$100,000 from$50,000
■ Installment debt for 2 tankers(approved in FY10-11)
• Environmental Management Fund
• Operations to include Landfill and Drop-off Recycling
• Staffing: 30 positions(3 administration,20 Landfill,7 Recycling)
• Eliminated 58 positions
• Recommended FYI 1-12 Tip Fee= $59/ton(current fee= $55.65/ton)
■ General Fund loan payment and/or future reserve=$2,533,500/year
• Additional Considerations
■ FY10-11 operating loss estimated at$1 million
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
BUDGET WORK SESSION,MAY 2,2011 PAGE 177
■ General Fund loan increased from$4.2 to$5.2 million
County Manager Shell strongly advised the Board to increase tip fees to $59.00 per ton in order for the
Environmental Management Fund to pay back the loan of$5.2 million to the General Fund,as well as pay for future
expenditures in closing landfill cells, potential major construction and renovation of the incinerator, and other
potential capital projects.
Budget Analyst Beth Schrader reported on anticipated expenditures for the landfill operations. Staff will
need to prepare for closing of landfill cells and construction of new cells in the next fiscal year. Other costs will
include purchasing of heavy equipment (front-end loader/dump truck) as well as other capital projects (scales
house).
In discussion, the Board agreed that a proactive business approach was needed to operate the County's
solid waste business. It was pointed out that tip fees would need to be competitive with adjacent counties and a
properly operating waste-to-energy facility would generate$300,000 a year in savings.
Finance Director Avril Pinder provided the following update on the General Fund fund balance:
2010 6/30/2011 Est.
Reserved(legal restrictions/contracted) $24,485,236 $27,445,317
Unreserved(available for appropriation) 44,292,878 41,018,384
Designated(legally set aside by the Board) 1,400,000 1,600,000
Total Fund Balance $70,178,114 $70,063,701
Fund Balance% 18.30% 16.780%
Ms. Pinder explained that in budgeting $3 million of the Appropriated Fund Balance, the County will
maintain the objective of 16.78%for the fund balance. Peer counties in North Carolina average 21%appropriated
fund balance.
Environmental Management Operations 2010 6/30/2011 Est. 6/30/12 Est.
Revenues $12,916,832 $12,175,384 $12,320,000
Expenses 14,850,617 13,175,076 9,786,500
Surplus(Deficit) $(2,178,057) $ (999,692) $2,533,500
Amount owed General Fund $4,185,901 $ 5,185,863 $2,652,363
Impact to General Fund 2010 6/30/2011 Est. 6/30/12 Est.
Reserved $24,485,236 $28,445,009 $25,911,509
Unreserved 44,292,878 40,018,384 42,552,192
Designated 1,400,000 1,600,000 1,600,000
Total Fund Balance $70,178,114 $70,063,701 $70,063,701
Fund Balance% 18.30% 16.380% 17.38%
County Manager Shell asked the Board to consider the following when deciding on next year's budget:
• County needs to have a business plan to operate solid waste management
• Renewable energy credits will only benefit if WASTEC facility is reopened
• Major renovations of the incinerator are needed to reopen
• Increased tip fees will provide pay back to the general fund
• Paying off debt will give the County a strong business position to invest in the future for solid waste
management
• A tip fee of$59.00/ton will cost the average household$5.00/year
County Manager Shell urged the Commissioners to speak with him if they have any questions or to give
any general direction on the proposed budget. The recommended budget will be given to the Board at Agenda
Review on May 12, 2011.
ADJOURNMENT
There being no further business, Chairman Barfield adjourned the meeting at 5:35 p.m.
Respectfully submitted,
Teresa P.Elmore
Deputy Clerk to the Board