2011-05-13 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
SPECIAL MEETING WITH NEW HANOVER COUNTY PAGE 189
BOARD OF EDUCATION,MAY 13,2011
ASSEMBLY
The New Hanover County Board of Commissioners met for a Special Meeting on Friday,May 13, 2011, at
8:30 a.m.in the Harrell Conference Room at the New Hanover County Government Center,230 Government Center
Drive, Wilmington,North Carolina.
Members present were: Chairman Jonathan Barfield, Jr.; Vice-Chairman Jason R. Thompson;
Commissioner Ted Davis, Jr.;and Commissioner Richard G. Catlin.
Commissioner Brian M.Berger was absent.
Staff present were: Assistant County Manager Andre' Mallette; Budget Director Cam Griffin; County
Attorney Wanda M. Copley; Clerk to the Board Sheila L. Schuh Deputy Clerk to the Board Kymberleigh G.
Crowell; Assistant County Manager Chris Coudriet;and Finance Director Avril Pinder.
New Hanover County Board of Education members present were: Chairman Donald Hayes; Vice
Chairperson Jeannette Nichols; Board Members Janice Cavenaugh; Dorothy DeShields; Derrick Hickey, M.D.;
Edward Higgins;and Elizabeth Redenbaugh.
New Hanover County Board of Education staff present were: Superintendent Dr. Tim Markley; Chief
Technology Officer Dawn Brinson; Assistant Superintendent of Operations Bill Hance; Assistant Superintendent of
Student Support Dr. Rick Holliday; Assistant Superintendent of Instruction Dale Pelsey-Becton; Chief Financial
Officer Mary Hazel Small; Assistant Superintendent of Human Resources Dr. John Welmers; and Public Relations
Support Associate Debbie Trafton.
Chairman Barfield and Chairman Hayes welcomed everyone present and announced that the purpose of the
meeting was to hold a joint meeting with the New Hanover County Board of Education.
Vice-Chairman Thompson provided the invocation.
DISCUSSION WITH NEW HANOVER COUNTY BOARD OF EDUCATION
Chairman Barfield requested that Budget Director Cam Griffin and Superintendent Dr. Tim Markley make
their brief presentations and then have discussion between both boards.
Superintendent Markley presented the following New Hanover County Schools 2011-2012 Budget
Summary:
• Projected Revenue Reduction-$21.7 million(10%):
• Federal-$9.7 million
• State-$10 million
• Based on House Budget(including Stabilization cuts)
• Senate Budget anticipated to cut additional$2 million
• Local-$2 million
• County-$1,000,000
• Safe Light-$600,000
• Indirect Cost-$400,000
• Reduction Proposals:
• $5,992,000 -Reductions for non-recurring federal and state programs
• Technology funds,textbook carryover, small grants and Jobs Bill funding used for local
positions in preparation for funding cliff
• $530,000 -Transfers and Costs Increases
• Projected Utility Savings of$800,000 transferred to:
• $200,000 Maintenance Project Reserve
• $1.1 million in benefit cost increases for local employees
• $3,642,000 -Central Office Reductions(46 positions)
• Reductions include positions,months of employment, supplies and contracted services
• $12,545,000 -School Reductions(206.5 Positions)
• Reductions include supplements,positions,months of employment, supplies and contracted
services
• Specific Pre-K cuts not yet determined; Waiting on program guidance related to
reorganization with DHHS
• Student fees for Athletics and Drivers Education
• Estimated 6/30/11 Fund Balance—$16.5 million:
• $9.9-Minimum Goal of 5%of Operating Budget for cash flow and emergencies:
• Less than 1 month of expenditures
• Based on Projected Revenue
• $6.6 Million Available for:
• $3,600,000—Reserve for one-time costs associated with reduction in force
• $ 400,000—Fuel reserve
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
SPECIAL MEETING WITH NEW HANOVER COUNTY PAGE 190
BOARD OF EDUCATION,MAY 13,2011
• $2,600,000—Reserve to offset additional Senate cuts or to bring back lost teaching positions
• Additional State Cuts Anticipated for 2012-13:
• $1.5 million additional proposed for benefits and a higher LEA Adjustment(Discretionary
Reduction)
Dr. Markley stated school employees are technically employees of the State and furloughs can only be
mandated at the State level, not local. In response to questions, Dr. Markley stated that he would like to see a
$750,000 increase in funding for capital outlay.
Budget Director Cam Griffin presented the following New Hanover County information:
• For the past five years, New Hanover County has funded approximately 30% of the Schools' budget,
excluding debt service, and is the largest expenditure in the County budget.
• In FYI 1-12,New Hanover County expenditures for the schools are$83.8 million. Funding from ad
valorem taxes is$72.5 million,or equivalent to 22 cents of the tax rate.
• Since 1994 three recent bond referendums were passed to expand school facilities:
• 2005 -$123 million
• 1997 -$125 million
• 1994 -$39.9 million
• The debt service is not part of the schools budget but is part of New Hanover County's Budget; FYI 1-12
schools debt service will be$22.3 million.
• The FYI 1-12 budget allocates 6.3% to Cape Fear Community College, 31.3% to New Hanover County
Public Schools and 62.4%for all other items.
• The FYI 1-12 recommended funding for Schools operations is $250,000 less than the FY10-11 adopted
amount. This reduction in the school budget is 0.4%reduction in County contribution or a 0.12% of the
Schools FY10-11 Adopted Budget.
• In addition to the funding allocated to the Schools,the County has provided in FY10-11:
• $600,000 for Legion Stadium project; stadium is used for numerous school teams
• $200,000 to retain red light camera program,which provides funds for the Schools
• County departments provide direct services to the Schools.
• The Sheriff spends over $1 million on school related services through School Resource Officers
(15)and Crossing guards(24).
• Beyond the Basics:
• Funding 876 local positions
• Funding a 7%supplement to the state teacher salary;FY10-11 cost for supplements is$5.8 million
• Local Responsibility:
• Local Board formulates educational policy
• County Commissioners determine the amount of County funding that goes to the Schools
• There is built-in potential for conflict
• School Budget and Fiscal Control Act:
• County budget ordinance should include at least 2 breakdowns:
• Local current expense
• Capital Outlay
• Appropriation Allocation:
• County Commissioners currently have the ability to allocate all or part of the schools appropriation to
particular purposes or functions. Examples of functions are: Instructional Programs, Supporting
Services, Community Services, and Non-programmed Charges.
• County Commissioners may not control the School Board budget for current expenses at the line item
level.
• Appropriation by Purpose is the current method used by Board of Education in approval of budget
resolution.
• Appropriation by Fund is the current method for County appropriation for current operating
expenditure.
• County Commissioners may want to consider requesting the Board of Education present its budget
ordinance for final approval by purpose/function.
• Budget Amendments for Current Expense:
• If the Commissioners make a lump-sum appropriation to current expenses, the School Board may
amend the budget on its own.
• If the Commissioners have allocated funding to local current expense fund for specific functions, the
School Board alone may modify an allocation only to a limited extent (increasing or decreasing an
allocation up to 25%). Amendments resulting in larger changes require approval by the
Commissioners.
• The Commissioners may choose to approve allocations percentage from 10%to 25%.
• The 25% rule applies unless the Commissioners reduce the percentage change that will invoke
Commissioners to review at the time the County budget is adopted. The Commissioners may
select a percentage anywhere from 10%-25% and may apply different percentages to different
allocations. The School Board always has discretion to amend an allocation by less than 10%.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
SPECIAL MEETING WITH NEW HANOVER COUNTY PAGE 191
BOARD OF EDUCATION,MAY 13,2011
In response to questions, Dr. Markley stated that of the proposed 46 Central Office employee cuts, only 5
or 6 are not currently filled. If the proposed Pay-to-Play cost cutting option is approved, it would provide a savings
of$200,000 to $300,000 with built-in breaks for lower income students; overall impact on students is unknown. He
would like to see the funding remain at least at the same amount as last year but would prefer an increase in capital
outlay by $750,000. Lottery funds cannot be used for technology. There has not been an increase in funding since
2006 and the $750,000 would help with items such as wiring to improve technology needs but there would still be
gaps;buildings need repair or replacement.
Concerns were expressed about the citizens not being fully informed of what New Hanover County has
done for the school system over the years. There is a need for both sides to provide the full picture to the community
to make it aware of the funding issues. Chairman Barfield commented that the burden to provide funding to cover
the gaps left by Federal and State agencies should not be borne by New Hanover County employees by continuing
furloughs. If there is a need for families to pay for extracurricular items such as driver's education then maybe that
option needs to be considered by the School Board. He further commented that the County is still facing a budget
deficit for FYI 1-12 and there is not enough money to meet the funding requests as submitted. Vice-Chairman
Thompson followed up by stating that New Hanover County and New Hanover County Schools need to work more
with the local delegation to safeguard funding programs such as the red light camera program.
Commissioner Davis stated that county employees have endured nineteen furlough days and the
elimination of this in the proposed budget would only bring employees back to FY2008-2009 salary rates. He
further stated that he may not be in favor of the proposed 1% merit increase which equates to $600,000. This
amount could be put towards the$750,000 capital outlay request.
Board of Education members expressed concerns that with the proposed Federal, State and local cuts, the
schools budget is reaching a point that will impact classroom instruction. The majority of the funding cuts are from
the State. To make the budget work, there will be a need to increase classroom size, cut teacher assistants, special
education programs and senior staff. The result will be that students will not receive the same level of instruction.
Board members further stated they have pledged to make and have made deep cuts; any assistance from New
Hanover County in increasing the funding or at least keeping it at the same level as last year would be appreciated.
In response to questions, Chairman Hayes stated that band/music programs will not be cut and although less than 1%
is spent on athletics,the return is in the form of student scholarships and well worth the expense.
The Commissioners and School Board members expressed a desire to continue working together towards
finding a resolution to the funding gap. School Board members expressed their appreciation to the Board for the
partnership over the past years and the funding provided in order to continue improving the lives of the community's
students.
ADJOURNMENT
There being no further discussion, Chairman Barfield thanked the board members for their time and
adjourned the Special Meeting at 10:10 a.m.
Respectfully submitted,
Kymberleigh G. Crowell
Deputy Clerk to the Board