2009-01-20 Budget Work Session
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 31
BUDGET WORK SESSION OF JANUARY 20, 2009 PAGE 528
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Tuesday, January 20,
2009, at 12:45 p.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street,
Wilmington, North Carolina.
Members present were Chairman Ted Davis, Jr.; Vice-Chairman Jason R. Thompson; Commissioner
Robert G. Greer; Commissioner William A. Caster; Commissioner Jonathan Barfield, Jr.; County Attorney Wanda
M. Copley; Deputy Clerk to the Board Teresa P. Elmore; and County Manager Bruce T. Shell.
Others present were: Finance Director Avril Pinder; Budget Director Cam Griffin; Senior Budget Analyst
Beth Schrader; Budget Analyst Donna Seal; and Assistant County Managers Dave Weaver, Andre Mallette, and
Chris Coudriet.
Chairman Davis called the meeting to order and requested County Manager Bruce Shell present a budget
overview for FY 2009-2010.
County Manager Shell gave an overview of the County budget saying that revenues are down because of
the current economic downturn. Budget cuts were made to absorb the impact from the tax base error and the State
imposed building permit moratorium of last year. Further reductions in revenues will have a significant impact to
the service level of County programs. A hiring freeze has eliminated 53 positions. Department heads have been
informed of the budget shortfall and have been asked to make voluntary reductions.
OVERVIEW OF FINANCIAL HEALTH OF THE COUNTY AND FUND BALANCE
Finance Director Avril Pinder presented an overview of the Countys fund balance and the financial
condition of the County reporting that:
Financial Condition
·
Net Assets (long term measure)
Net assets (total assets - total liabilities) as of 6/30/08
o
General government = $(4.0) million
§
·
Negative due to schools assets not included, only the debt
Environmental Management = $8.0 million
§
·
Fund Balance (short term measure)
Fund Balance is divided into:
o
Reserved - not available for next years budget
§
Unreserved - available for spending in next years budget
§
General Fund as of 6/30/08 - Total = $68.5 million
o
Reserved = $26.5 Million
§
Unreserved = $42.0 million
§
·
$6 million budgeted for FY08/09
·
Remaining unreserved $36 million
Estimated General Fund FY 09 Total = $68.6 million
o
Reserved = $26.5 million
§
Unreserved = $42.1 million
§
State Law requires General Fund to have a minimum 8% unreserved fund balance
o
New Hanover County goal: 16.67% or 2 months of expenditures
§
·
Environmental Management Fund Balance
Environmental Management Fund - an Enterprise or Business-like Fund
o
Revenues come from charges for services
§
As of 6/30/08 - Net Assets = $8,023,299
o
As of 6/30/08 - Deficit net income of $1.5 million.
o
Total indebtedness to General Fund = $3.061 million
o
·
Debt
Legal debt limit per State Statute as of 6/30/08 = $2.3 billion
o
Benchmark against other Aa1 rated entities
§
Total Outstanding Debt January 2009 = $387.247 million
o
General Fund = $156.32 million
§
·
Debt Service FY09/10 = $19.224 million
CFCC Fund = $33.854 million
§
·
Debt Service FY09/10 = $3.924 million
Public Schools Fund = $186.199 million
§
·
Debt Service FY09/10 = $20.179 million
Environmental Management Fund = $3.081 million
§
·
Debt Service FY09/10 = $ .663 million
Fire District Fund = $7.791 million
§
·
Debt Service FY09/10 = $1.086 million
·
Debt Ratio Analysis
Total Net Debt Aa1 Median = $891,385,000
o
Debt burden % of full value = 2.4
§
Net debt per capita = $2,152
§
Payout in 10 year = 66.3%
§
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 31
BUDGET WORK SESSION OF JANUARY 20, 2009 PAGE 529
New Hanover County = $387,247,000
o
Debt burden % of full value = 1.2
§
Net debt per capita = $2,060
§
Payout in 10 year = 64.2%
§
·
On the Horizon
NHC Schools - Authorized Bonds of $43 million
o
Schools cash flow needs require sell bonds in May/June 2009 time frame
§
Cape Fear Community College - Authorized Bonds of $164 million
o
First sale in March 2010
§
Park/Green-Space Bonds - Issued $18 million: City $12 million; County $6 million
o
Unspent: City $3.6 million; County $1.4 million
§
Authorized bonds of $17.5 million
§
Architect working on estimates no sale date at this time
§
Jail Expansion non-detailed design $187,000
o
OVERVIEW OF FY 08-09 BUDGET
Budget Director Cam Griffin presented the following Summary of Budget Concerns:
·
FY08-09 Revenue Concerns
Very Preliminary Projected Revenue Shortfall
o
·
Based on first four months actual data
·
Sales Tax is running $2.6 million below FY08-09 Budget
Inspection Revenue is $260,000 below the FY08-09 Budget
o
Register of Deeds revenue estimated at $1.6 million below FY08-09 Budget
o
Reduction in Intergovernmental Funding
o
·
Health and DSS
·
NHC Schools and CFCC
·
FY08-09 Situations to Monitor
Lower interest rates could lead to an increase in home refinancing or construction; this
o
would positively impact departmental revenue projections
All national trends show much lower retail sales levels over the holiday season than in
o
previous years. The County will not receive December sales numbers from the State
until March.
·
FY08-09 Expenditure Concerns
Caseloads at Human Services departments and Public Safety departments increase during
o
difficult economic times
Changes in foster care
o
Uncertainty in costs of fuel and food
o
·
FY09-10 Revenue Concerns
Growth in ad valorem tax base may be less than increases in the past
o
Sales tax is dependent on the economy
o
·
Annexation by the City of Wilmington will have impact also
Register of Deeds revenue dependent on housing, banking, and real-estate market
o
Fund Balance
o
·
Inspection revenue dependent on construction
·
Reductions in funding from other levels of government
·
FY09-10 Expenditure Concerns
Departments have been trying to do more with less going into the budget process
o
Case loads in Human Services and Public Safety departments increase in poor economic
o
times
Challenge of funding Education
o
Mental Health funding
o
Unfunded Mandates
o
Foster Care Changes for FY09-10 are projected
o
·
Increase program expenditures by $3.2 million
·
Result in an incremental $1.8 million in net County cost
Volatility in fuel costs
o
Expenditure items delayed from previous years
o
·
$1.8 million in General Fund for 800 MHz radios for public safety
Capital Projects delayed from previous years
o
·
IT
·
$171,000 high priority replacement, redundancy, and fail-over IT equipment
needs
·
445 computers for computer replacement program
·
383 planned for FY09-10 + 82 FY08-09 catch up
·
License and storage needs (LaserFiche current/expansion)
·
High volume departments are drowning in paper
Budget Director Griffin concluded by saying Department budgets are being closely monitored and
additional reductions may be necessary as revenue projection and expenditure reductions are refined.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 31
BUDGET WORK SESSION OF JANUARY 20, 2009 PAGE 530
Discussion was held on the difficult economic times which demand more services from Human Services
departments yet will not tolerate a tax increase. With the challenges of the bad economy, several options to reduce
expenditures were discussed, such as cutting employees pay and/or hours.
UPDATE ON SOUTHEASTERN CENTER OPERATIONS
Assistant County Manager Chris Coudriet gave an update on the Southeastern Center (SEC):
General Status
·
SEC will make a request for portion of escrow account to meet service needs through June 30, 2009
·
SEC Director, Foster Norman, financial recommendation to the area authority at January 29 meeting
·
Short term:
SEC is using a benefit management plan to allocate fixed service levels to specific funding
o
levels for defined authorization periods
Only emergent and urgent clients are receiving services funded by SEC
o
Routine clients needs are referred to community resources
§
·
Long term:
SEC staff is developing a service plan and budget for area board approval
o
Committed to managing consistent with the plan
o
·
Integrated Payment and Reporting System (IPRS) - State Funds Status
Child Development Disability funding is exhausted
o
State Mental Health agreed to transfer $150,000 to service
§
Transferring from CTSP (aka/Willie M. funds)
§
·
Transfer is possible because of child Medicaid eligibility
Adult Mental Health funding is nearly exhausted
o
$10,000 available
§
Staff may ask for funds transfer from other services
§
SEC has about $2 million remaining in IPRS for draw down from $8 million budget
o
Development therapy and developmental day services most significant costs
o
Developmental therapy realigned for more efficient service delivery
§
Development day service eliminated
§
PROPOSED BUDGET CALENDAR FOR FY 09-10
Budget Director Griffin presented the following proposed budget calendar for the Commissioners:
·
April 30, 2009 Recommended budget presented to the Board of Commissioners (informally)
·
May 4, 2009 County Manager presents recommended budget at Regular Board meeting
·
May 18, 2009 Public Hearing on budget
·
June 1, 2009 Board adopt FY 09-10 budget
Chairman Davis suggested that a budget work session be held on March 16, 2009, after the Regular Board
Meeting.
Consensus
: The Board agreed to hold a budget work session on March 16, 2009, after the Regular Board Meeting.
In closing, Budget Director Cam Griffin reported that for the Boards review in their workbook is the
following information in the appendix:
·
FY08-09 Fund Balance Transactions and Contingency
·
Frozen Positions Report
·
Outside Agency Lists
·
Countywide Goals and Accomplishments Lists
·
Effective Tax Rate Comparison and Actual Tax Rate Comparison Charts
·
Unfunded Capital Improvement Projects from FY08-09
·
List of Items Not Funded in FY 08-09 Budget
·
Local Option Taxes Information
·
Education - Summary of Revenues and Expenditures Report FY08-09
A copy of FY 08-09 budget work session presentation is available for review in the Budget Department.
ADJOURNMENT
There being no further business, Chairman Davis adjourned the meeting at 3:05 p.m.
Respectfully submitted,
Teresa P. Elmore
Deputy Clerk to the Board