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2013-04-22 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32 BUDGET WORK SESSION,APRIL 22,2013 PAGE 611 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Monday, April 22, 2013,at 12:45 p.m. at the New Hanover County Courthouse, 24 N. Third Street,Wilmington,NC. Members present: Chairman Woody White: Vice-Chair Beth Dawson; Commissioner Jonathan Barfield, Jr.:and Commissioner Thomas Wolfe. Commissioner Brian Berger arrived at 12:55 p.m. Staff members present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; Clerk to the Board Sheila L. Schult 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 budget update. County Manager Coudriet reported that County staff has been working on the recommended FY13-14 Budget and it will be formally presented at the May 20, 2013 Board meeting. Department heads were present at the work session in order to respond to any questions the Commissioners may have regarding their budgets. Budget Director Cam Griffin noted that the Work Session notebook contained the following: 1)Manager's memorandum, 2) Debt Sei ice for Next 5 Years, 3) New Hanover County Schools Budget Request, 4) Cape Fear Community College Budget Proposal, 5) Departments of Health and Social Sei ices Net County Cost, 6) Departments' Position Requests, 7) FY13-14 Capital Outlay, 8) 5 Year Capital Outlay, 9) Vehicle Replacement Schedule, 10)Capital Improvement Projects, and 11)Outside Agency Funding Requests. Finance Director Lisa Wurtzbacher presented the following PowerPoint on proposed fiscal policies: • Fund Balance: • Purpose and Need: • Cash Flow • Bond Ratings • Economic Downturns • Emergencies • Stable Property Tax Rate • Local Government Commission requirement • Components • Available Fund Balance Goal: 8% of general fiord expenditures minimum as recommended by the Local Government Commission • Four of five Board members must approve use of fiord balance below 8% • Unassigned Fund Balance Goal: 21%of general fiord expenditures • If fiord balance falls below this level, a plan to restore fiord balance within two fiscal years must be developed • Debt Policv: • Purpose: To acquire, construct or renovate capital assets for the good of the public and to be used to fiord ongoing operational expenses • Structure: • Tax-exempt versus taxable debt • Maximum of 20 near life debt • Fixed rate versus variable rate debt • Pay as you go fiurding: • Assets less than$250,000 or 10 near life • Armually appropriate fiords for capital improvement plan • Proceeds from the sale of assets assigned to capital improvement plan • Recommendation: Debt per capita goal of$2,200 • June 30,2012 debt per capita=$1,858 • Amount of per capita needed to fiord pending projects= $1,963 • Reduction of each$100 per capita results in a reduction in capacity of approximately$21 million • Recommendation: Debt to assessed value of 1.6% • June 30,2012 debt to assessed value was 1.14% • Amount of per capita needed to fiord pending projects is 1.42% • Reduction of each .1% in debt to assessed value results in a reduction in capacity of approximately $29 million • Recommendation: Net debt sei ice to be no more than 20%of total operational expenditures • June 30, 2012 actual general fiord debt sei ice as a percent of operational expenditures was 19.13%before reimbursements • Net general fiord debt sei ice as percent of operational expenditures was 16.11% • Goal of net debt sei ice to total operational expenditures needed to fiord pending projects is 16.6% • Reduction of each 1% of debt sei ice to expenditures results in a reduction in debt sei ice capacity of approximately$2.7 million • Supported by comparison with other peer/county groups NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32 BUDGET WORK SESSION,APRIL 22,2013 PAGE 612 The Board further discussed the purpose and benefits of having the policies in place and plans to consider the policies prior to adoption of the new budget. Discussion of FY 13-14 Budget Overview County Manager Coudriet presented an update to the Recommended Budget: • Major Funds: • General Fund-$279.2 million • Ad Valorem-55.4 cents(no change) • Fire Sei ices District-$ 11.5 million • Ad Valorem-7.9 cents(no change) • Environmental Management-$ 13.9 million • Tipping Fee-$59/ton(no change) • Sales tax projected to increase 3.5% over FY12-13 estimated amount based on the expectation of continued economic recovery • Changes to General Fund Revenues: • Full Measure and List Revaluation planned to be in place by Januaiv 1,2017 • Estimated cost of$1.5 million($300,000 budgeted/allocated for FY13-14) • Reduced municipal tax collection fees from 1.75%to.95% • Reduced revenues of$537,000 • New Inspection Permit Fee Schedule(one fee paid up front) • Benefits: • Easier for developers,architects and builders to determine cost of fees • Increase Count-ti-effrciencv and cost effectiveness • To better seine the public • One-Solution software package to integrate the development process across Health, Fire Sei ices, Development Sei ices, and Planning and Inspections Departments • Minor changes to Parks and Gardens and Zoning Fees • Full Fee Schedule to be distributed on May 20, 2013 along with Recommended Budget • General Fund Expenditure Priorities: • Economic Development efforts increased in FY13-14 with $572,336 of unspent fiords appropriated from FY12-13,and$400,000 budgeted in FY13-14 • Film Commission,public/private partnerships • Detail target analysis to enhance recruitment for area • Preschool Education/Preparation for 21st Century • Increased finding for two part-time Library Associates for "Every Child Ready to Read" projects (additional cost of$50,350) • Decrease in Smart Start's grant finding of$60,000 for FY13-14 • Increase County finding of$635,000 for day care to offset decrease of approximately $500,000 State day care finding to provide 12 months of day care for approximately 130 children • Reduce and Prevent Crime • Maintain Community Sei ice and Restitution Program with priority for Juvenile Crime Prevention Program • Add Program Assistant for Community Justice Sei ice Department(prey-iously frozen position) • Employees • Compensation recommendation of 2%market adjustment and 1.5%merit adjustment • Departments Heads have discretion to time adjustments in awarding up to 3%merit • 18 Positions requested with 13 recommended • 8 Sheriff Detention Officers • 5 DSS Sei ice Providers • Fire Sei ice District requested 11 new positions:however,none are recommended at this time • Funding for pay and classification study of$125,000 • Salary Lag of$1 million($700,000 budgeted in FY12-13) • Health Insurance increase of 7% • Modify employee costs for buy-up plan • Unemployment Insurance increase due to State reform for repayment of approximately $2.5 billion debt to the Federal Government($325 million this year) • 48 employees in General Fund and 20 employees in Fire Sei ices converted from Temporary to Regular employees due to ruling by retirement system • Any employee who works 1,000 hours or more per year must be a part of the retirement system • Net cost of$678,287 ($420,060 in General Fund and $258,227 in Fire Sei ices Fund) due to the cost of the employees' benefits of health and dental insurance and retirement • Funding for four previously frozen positions budgeted: • Plamrer/Plannring&Inspections • Revaluation Coordinator/Tax Department • Development Coordinator/Museum • Program Assistant/Community Justice Sei ices NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 32 BUDGET WORK SESSION,APRIL 22,2013 PAGE 613 • County contribution to 401K plan not recommended at this time • General Fund Expenditures Initiatives: (Many projects delayed due to fiscal constraints) • Video First Appearance-Clerk of Court requested finding of$250,000 for video equipment • Audio Encoding of Commissioners' meetings in format for the deaf and hard of hearing of$20,000 • Other Initiatives • Funding of$350,000 for City to expand Lab for drug blood analysis(actual cost not known) • Funding of$100,000 for computer replacement program($300,000 was requested but reduced due to budget constraints) • Capital Projects: • 14 Vehicle Replacements(12 for the Sheriff's Office and 2 for other General Fund Departments) • General Fund Transfer of$350,000 to fiord Capital Projects • Environmental Management Fund: • Revenues-$13,900,000 • Expenditures - $13,900,000 • Tipping Fees= $59/ton(no appropriated Fund Balance) • New transfers for capital and landfill post-closure costs • Budget supports capital needs • Fire SeivIces Fund: • Revenues-$11,500,000 • Expenditures -$11,500,000 • Fund Balance appropriated to balance=$235,372 • No increase in tax rate=7.9 cents • 20 positions converted from Temporaiv to Regular employees • Budget supports capital needs: • Replace a water tender for southern part of County • Replacement of Battalion Chief s vehicle • Funding for the expansion of fire hydrant coverage throughout the County Education The Board reviewed the budget requests from Cape Fear Community College and the Board of Education. Staff responded to questions regarding the role the Commissioners may take in specific request, such as the request for new employees for the new Union Station facility and an in-house attorney for the Superintendent's Office. ADJOURNMENT There being no fiarther discussion, Chairman White adjourned the meeting at 3:05 p.m. Respectfially submitted, Teresa P.Elmore Deputy Clerk to the Board Please note that the above minutes are not a verbatim record of the A'cnv Hanover County Board of Commissioners meeting.