2013-02-08 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
BUDGET WORK SESSION,FEBRUARY 8,2013 PAGE 569
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Friday, Februaiv 8,
2013, at 9:00 a.m. at the New Hanover County Executive Development Center, Oleander Room, 1241 Military
Cutoff Road, Wilmington,NC.
Members present: Chairman Woody White: Vice-Chair Beth Dawson; Commissioner Jonathan Barfield,
Jr.:and Commissioner Thomas Wolfe. Commissioner Brian M. Berger arrived at 9:45 a.m.
Staff members present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; Executive
Leadership Team members: Assistant County Manager Tim Burgess: Budget Director Cam Griffin; Assistant
County Manager Avril Pinder; Public Affairs Manager Carey Ricks: Strategy and Policy Manager Beth Schrader;
Clerk to the Board Sheila Schult; Executive Assistant Susan Wynn; and Deputy Clerk to the Board Teresa P.
Elmore.
Chairman White called the meeting to order and requested County Manager Chris Coudriet to begin the
presentation.
County Manager Coudriet welcomed everyone to the Budget Work Session and introduced David
Eisenlolrr,Managing Partner with the Azimuth Group,as the facilitator to lead the work session.
Local Budget Review
Budget Director Cam Griffin presented an overview of the current fiscal year and reported that revenues
were expected to exceed this year's budget while expenditures were anticipated to be less than the adopted budget.
The Environmental Management Fund balance would be impacted by costs to deconstruct the Wastec stack and to
conduct a comprehensive waste management plan.
Budget Challenges Going Forward:
• General economic conditions
• Slow economic recovery with continued unemployment concerns—New Hanover County is above
the State average
• Small business lending remains difficult
• Price of gasoline remains high
• Uncertainty about the impact of 2%FICA reinstatement
• Anticipated increases in costs for education
• Anticipated school security
• Potential school bond issuance
■ Average daily student membership increase of 3.3%per year
• Cape Fear Community College Bond - building and operating costs
• Deferred spending during the recession may cause for more pressing demand for repairs or
replacement of County equipment and infrastructure
• Lack of fimding from the Federal and State governments will impact shoreline stabilization and beach
renourishment projects
• Impact of new development on stormivater drainage programs
• Recommendation to provide a firll measure and list property revaluation at an anticipated cost of$3.5
million
o Board will need to determine next property tax revaluation effective January 1, 2016 or January 1,
2017
• Potential need for jail expansion and request for a local criminal justice laboratory for Sheriffs Office
• Health and Human Sei ices cuts and cost shifts to State and counties
• Opportunity for program/sei ice cooperation/partnerships with the City of Wilmington
• City of Wilmington's request for additional portion of sales tax
• Impact of Federal debt limit and sequestration initiatives
• Impact of State proposed changes to revenue structures and shift of costs to local governments
Debt and Debt Capacity
Finance Director Lisa Wurtzbacher presented information on the County's current principal outstanding
debt of$391,140,358. Pending debt issuance includes $54 million for Cape Fear Community College in 2013 and
$40 million in 2015: $10 million for construction cost of 320 Chestnut Street building in 2014: and possibly $16.9
million for the Marquis Hill and Heritage Park sewer project in 2016. Additional debt for 2014 includes financing
$4.5 million for the Airport Authority and $3.9 million for repair of Cobb Armex building. Further discussion
continued on the criteria for debt limits on county governments and the need to determine a formal debt policy and
fiord balance policy. Staff was requested to provide comparisons of other similar counties with scenarios showing
the impact on citizens.
Service Overview
Budget Director Griffin began by explaining that the primary role of county government is to be an
extension of the State in the deliveiv of sei ices. The main source of the County's revenue is from 2 1/4%sales tax
and ad valorem/property tax. In the discussion of expenditures, education was noted as the major expense of the
budget at 37.8%with the County fimding some of its operating cost plus capital expenditures. Much of the budget
consists of mandated programs and sei ices with 7.3% of the budget for discretionary sei ices. Some of the
mandatory sei ices must meet certain State and Federal standards of operations. Benchmarks determine staffing
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
BUDGET WORK SESSION,FEBRUARY 8,2013 PAGE 570
standards. A major concern for local governments is the unfunded mandates imposed by Federal and State
governments.
Citizen Survey Results
Tollie Mitchell, Program Director with Insight Research, Inc. presented the report for the citizen survey
conducted in November and December 2012. He reported that of the 3,600 surveys delivered, 567 were returned for
a response rate of 16%. The survey included questions related to respondent demographics, and attempted to
measure citizen opinions on liking in New Hanover County, effectiveness of New Hanover County government,
customer sei ice given by various county departments,and citizens'priorities for the fixture.
It was concluded that the suivey was statistically valid to draw conclusions to be used in providing the
Count-v direction for the fixture.
Tying Survey Results Back to the Strategic Plan
Strategy and Policy Manager Beth Schrader presented conclusions made from the Citizen Suivey Report,
saying that staff was able to determine the following:
• Citizen priorities not necessarily where County performs best.
• Citizens generally happy with quality of life,but less consensus on satisfaction with County sei ices.
• Count-v needs to evolve to meet citizens where then are in how then want to communicate and do
business.
Suivey Results and Strategies for Top Priority Issues:
• Strong Economy/High Quality Job Growth
o Strategies: Move from recruiting outside companies to building robust clusters. Take a portfolio
perspective—upgrade existing and broaden to new. Focus on job quality increasing prosperity.
• Planned Environment Builds Community and Preseives Natural Resources
o Strategies: Increase percent of affordable housing to make attractive to young professionals.
Support access to greenway and parks.
• Increase Safety and Security
o Strategies: Reduce/prevent property crimes. Focus on reducing juvenile recidivism to prevent
graduation to more serious crimes and/or adult criminal activity/life. Create and meet emergency
response standards based on hazard risk and location.
• Prepare Students to be Successfirl in 21'r Century
o Strategies: Focus on preparing children zero to 5 years old in five development areas that are
needed to be ready for kindergarten. Encourage timely completion of post-secondary programs to
add to pool of qualified workers and free up space for new students.
Break: Chairman White called a break from 12:40 p.m. to 1:20 p.m.
Discussion of Board's Priorities
Facilitator Eisenlolr led discussion on the role of a Board in developing strategies to define the boundaries
and philosophy for County government.
Investment Portfolio of what the Board wants to accomplish:
• Criteria: Sow
• Partnership with City of Wilmington
• Adopt strong fiscal policies
• Develop economic development plan creating jobs
• Criteria: Grow
• Inventory of infrastructure to support targeted growth
• Comprehensive Land Use Plan with City of Wilmington
• Detailed budget analysis and review
• Complete study of Human Sei ices(Health and Social Sei ices)
• Criteria: Plow
• Reduce spending on mandatory/discretionary programs
• Reduce County employee growth rate,which is greater than population growth
• Criteria: Haivest
o Annual or semi-amoral citizen suivev
Wrap Up and Next Steps
In conclusion,the Commissioners discussed their priorities for the budget process directing staff to:
• Continue to look for ways to operate more efficient, removing programs that are no longer needed
thereby reducing the size and scope of government.
• Focus on ways to promote a strong and diverse economy with emphasis on County sei ices and
development policies stressing the need to make the County easy to do business with.
• Develop strong fiscal/financial policies with emphasis on County debt capacity and find balance.
• Develop partnerships with City with emphasis to merge operations/ser-N,ices/departments to bring about
cost savings.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32
BUDGET WORK SESSION,FEBRUARY 8,2013 PAGE 571
Chairman White expressed appreciation to Mr.Eisenlohr for his leadership in the discussion and to staff for
the work involved in compiling the information for the budget work session. He urged the Commissioners,
management staff and department heads to work together as a team to seine the public and to take this opportunity
to be innovative in making choices for a more efficient government.
ADJOURNMENT
There being no further discussion, Chairman White adjourned the meeting at 3:30 p.m.
Respectfully submitted,
Teresa P.Elmore
Deputy Clerk to the Board