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2016-03-31 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33 BUDGET WORK SESSION, MARCH 31, 2016 PAGE 493 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, March 31, 2016, at 3:04 p.m. at the New Hanover County Government Center, Harrell Conference Room, Room 601, 230 Government Center Drive, Wilmington, NC. Members present: Chairman Beth Dawson; Vice-Chairman Jonathan Barfield, Jr.; Commissioner Skip Watkins; Commissioner Woody White; and Commissioner Rob Zapple. Staff members present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; and Deputy Clerk to the Board Kymberleigh G. Crowell. Chairman Dawson called the meeting to order and requested County Manager Chris Coudriet to begin the presentation. County Manager Coudriet stated Chief Strategy and Budget Officer Beth Schrader will be making most of the presentation as she has the best handle on the revenue and expense side at this point. Four topics to be covered today include the overview of requested expenditures by function and department, the Cape Fear Community College (CFCC) request, the WAVE Transit request, and the non-county agency requests. He asked Chief Strategy and Budget Officer Beth Schrader to start the presentation. Overview of Requested Expenditures by Function and Department Chief Strategy and Budget Officer Beth Schrader presented the following FY16-17 requested expenditures by function noting that the adopted budget for FY15-16 was $302,126,233; the revised FY15-16 is $307,949,754 and as of today the FY16-17 requested is $324,255,255. Expenditures are about 12% in the requested budget for general government; 19% in human services; and approximately 18% in public safety. There is 1% for both the economic and physical development and transfers and 4% for cultural and recreation. Approximately 40% of the budget includes educational items which are CFCC, New Hanover County Schools (NHCS) system and the associated debt. Finally there is general fund debt service which makes up approximately 5% of the budget. The amended budget reflects where the County stands based on the policy choices and decisions throughout the year. The requested budget represents all internal and external requests and has not been edited in any way shape or form. For education the formal submission of the budget has been received from CFCC, while the NHCS information is based on the Board th of Education’s budget work sessions. The Board of Education will hold a work session the week of April 4 and will not formally adopt its budget until the beginning of May. Officer Schrader provided an overview of some of the larger increases noting that general government has increased by approximately 4.44%. The general government in the requested budget assumes that 100% of the positions are funded 100% of the time. It assumes all fifty requested positions are in the budget and a salary lag has not been included. In response to questions, she stated there is not a specific amount used for salary lag. It is adjusted year to year based on the number of positions during the previous 12 month history, turnover and amount of time it takes to fill a position. She reported an increase is being seen in the transfers directly related to the Capital Improvement Plan. There is also a decrease in the requested budget in the economic and physical development area, which is driven by two things: 1) the $600,000 in the current budget for CFPUA related to the Flemington water under the river boring project and 2) the $500,000 undesignated economic development funding. Those two items were not included in the current requested budget and based on the March 23, 2016 meeting will be added between the requested and recommended budgets. Staff will provide a breakdown of the economic development funding as some funding is in other areas of the budget. CFCC Request Officer Schrader reviewed the three components to the CFCC request which make up the total amount the County allocates:  Contribution to current operating expense (in FY15-16 adopted budget it was just under $10.4 million)  Capital outlay projects (in FY15-16 adopted budget that accounted for almost $1.2 million)  Debt service ($14.9 million this fiscal year) A revised request is expected from CFCC but staff is working from current information as submitted: FY15-16 FY16-17 ADOPTED REQUESTED DIFFERENCE Current Expense $10,376,430 $10,923,835 $ 547,405 Capital Outlay 1,154,354 2,166,872 1,012,518 Debt Service 14,948,496 17,611,491 2,662,995 Total Request $26,479,280 $30,702,198 $4,222,918 The CFCC total contribution for the FY15-16 adopted budget was approximately $26.4 million. The FY16- 17 request for current operating expense has increased to $10.9 million. This is primarily for an incremental two months for the Humanities and Fine Arts Building operation as well as assuming five months operations for the Emerging Technologies Building. CFCC is also requesting approximately $2.1 million for capital outlay which would be an increase of just over $1 million versus what was funded in the current fiscal year. CFCC will be a recipient of NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33 BUDGET WORK SESSION, MARCH 31, 2016 PAGE 494 $5.9 million as part of the Connect NC Infrastructure bonds. Those funds are earmarked for what it can and cannot be used towards:  May be used for new construction, renovation and repair.  May not be used for renovation or repair of athletic facilities (The top priority and largest dollar value of CFCC is the replacement of the roof at the Schwartz Center which would not be eligible for bond funds).  State has indicated that some funding may begin to be available late August 2016 time frame. WAVE Transit Request Officer Schrader reviewed the FY15-16 adopted and FY16-17 requested budgets for WAVE Transit. The County contributed $275,000 for current operating expense, $5,373 for capital to assist with bus shelters and the second year fund balance contribution of $157,822. WAVE has requested for FY16-17 that the County contribute $390,000 for operational expenses, an increase of $115,000. She noted that County staff requested WAVE to provide an estimated cost in the budget request for potentially putting Trillium on the northern route. The cost of $89,000 would be to expand service to Route 207 for weekend service. In response to questions about why the information was asked for at this point, County Manager Coudriet stated that staff needed to know the cost for transportation to that site as part of the Trillium’s analysis of whether or not it is the best location to build a facility. Although the project may not happen this coming fiscal year, the information will be used by Trillium during the decision making process whether to use the site it owns which already has public transportation or move to an area near the jail. WAVE Transit - Funding Officer Schrader reported that funding for Wave Transit comes from three primary sources:  The amount the County allocates in the adopted budget as a direct contribution  Pass through State Grant Funding from ROAP (Rural, Employment, and ED-TAP)  Vendor payments for bus tickets / bus passes - purchased through Health, DSS, Sheriff, and Senior Resource Center In review of the Rural Operating Assistance Program (ROAP) funding it was noted:  ROAP Funding (Rural Operating Assistance Program) is split between the Senior Resource Center (SRC) and WAVE Transit and is comprised of three parts:  ED-TAP is Elderly and Disabled Transportation  Employment is TANF Work First Transitional / Employment Transportation Assistance  Rural General Program (RGP) – only program with a match (local 10%)  ROAP Funding Percentage Breakdown:  Historically 40% County / 60% WAVE Transit  Moved to 75% County / 25% WAVE Transit in FY15-16 due to loss of 5310 funding  100% of ROAP will go to the NHC in FY17 County Manager Coudriet stated that the reason the County needed to make the funding change was to continue a transportation program at the SRC. The County needed the funds to effectively operate the service in the current year at a level that was done in the prior year. The 5310 funding was lost when the County designation was changed from rural to urban. In response to questions about the purchased services, Officer Schrader stated that it’s everything from bus tickets for people leaving the detention center, several programs at the Health Department with the largest purchaser being DSS with its TANF Work First program and other transportation funding they provide for bus tickets. In response to questions about the increase over the current budget year, Officer Schrader stated the difference is theoretically the allocation by ROAP which now is not being allocated to the County. County staff and WAVE staff have had conversations in regard to the upcoming fiscal year that the County would not allocate any ROAP funding to WAVE but rather retain it and run that portion of the program. Vice-Chairman Barfield stated that WAVE’s budget was cut by $150,000 due to losing ROAP funding. SRC Director Amber Smith reported that the department lost $152,500 because of the change in the 5310 rural designation. The $152,500 went to the Wilmington Metropolitan Organization (WMPO) who gave it to WAVE. County Manager Coudriet reported due to the designation change the County is out of the ROAP business and an effort was made to get back some of those dollars. Officer Schrader also reported that based on departments’ estimates, staff is anticipating an increase in funds to be paid as part of purchased services to WAVE which will assist in returning it to a $1.1 million contribution/payment. In response to questions about the two year funding, Chief Financial Officer Lisa Wurtzbacher stated the County has fulfilled that commitment and an increase has been seen in WAVE’s fund balance. The fund balance is not large due to a deficit in FY14 which had to be addressed first. She confirmed the fund balance contribution has helped to get bills paid and in not having to request funds from the county. She has not seen a request this year but unsure whether the City has. Non-County Agency Requests Officer Schrader reported that FY16-17 begins a new 2-Year funding window for non-county agencies. In the FY15-16 adopted budget the County funded approximately $800,000 for non-county agencies. The requests received for FY16-17 budget year are in excess of approximately $1.5 million. The policy questions concerning non- county agencies are 1) does the County continue to fund current agencies, fund new agencies, or a mix? and 2) to what level? The largest areas of increase are primarily in the human service agencies. An unprecedented number of agencies and an unprecedented number of new agencies are requesting funding. She commended Strategy and Budget Specialist Gwen Hill for her hard work in reaching out to the non-profits in the community that fit within the County’s strategic NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 33 BUDGET WORK SESSION, MARCH 31, 2016 PAGE 495 areas to make them aware of the opportunity. County Manager Coudriet commended the Board for this year’s approach of discussing this matter before receiving the recommended budget. April 14, 2016 Work Session Agenda The April 14, 2016 work session will be two hours in length and staff presented the proposed agenda:  NHCS Request  Capital Improvement Projects (CIP)  Capital Outlay Requests  Debt Schedule  Additional Topics? The Board was reminded that the Board of Education is having a work session to finalize their budget request th on April 5 and it will not be officially adopted until May. Staff will present the “prioritized” CIP and capital outlay th and implications on debt service. Requests were made in preparation for the April 14 work session for staff to provide a breakdown of the Sheriff’s Office requests, be prepared to possibly have a discussion on the fund balance policy and to provide a compiled list of the Commissioners’ funding priorities. County Manager Coudriet asked that the Board please share any critiquing with staff so that during the April th 14 work session the Board receives the needed information. He wants to make sure that the Board is receiving the type of data needed to make individual decisions and as a governing body. ADJOURNMENT There being no further discussion, Chairman Dawson adjourned the meeting at 3:57 p.m. Respectfully submitted, Kymberleigh G. Crowell Deputy Clerk to the Board Please note that the above minutes are not a verbatim record of the New Hanover County Board of Commissioners meeting.