2009-03-16 Budget Work SessionNEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 31
BUDGET WORK SESSION, MARCH 16, 2009 PAGE 571
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Monday. March 16,
2009, at 10.35 a.m. in the Assembly Room of the New Hanover Count-v Courthouse, 24 North Third Street,
Wilmington, North Carolina.
Members present were Chairman Ted Davis, Jr.: Vice-Chairmman 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.
Chairman Davis called the meeting to order and requested County Manager Bruce Shell begin with a
budget update.
County Manager Bruce Shell presented an oveiview of past measures dealing with the budget shortfall:
• Januaiv 2008 - Discoveiv of error in tax base of $7 million
• Impacted FY 08-09 Budget
• October 2008 - Expenditure Reduction Initiative due to deteriorating economic conditions
• A total of $1.6 million reductions from County Departments, Schools, Cape Fear Community College,
and Courts
February 13 - Budget Reduction Initiative
• Early Retirement Incentive Program
• Employees must firlough a minimum of 40 hours during the remainder of FY 2009
Suspend 3.0769 x hours of personal leave accrual per pay period for the remainder of FY 2009
Departments provided operating and capital expenditure reductions (February 27)
Involuntary Reduction in Force (RIF) Plan
Economic Downturn Budget Reduction Plan
County Manager Shell reported that his Economic Downturn Budget Reduction Plan is developed with the
goal of presenting the FY 09-10 Recommended Budget without a tax increase. He estimated an 8% reduction in
sales tax revenues or approximately a $12 million gap in revenues for the upcoming year.
The plan is as follows:
• 10 Furlough days in FY 09-10 and reduced accrual rate of 5 personal days $ 3,500,000
• Represents a 4% pay reduction
• 45 Positions vacated due to retirement will remain vacant through FY 09-10 $ 2387,114
• Maintain 45 currently frozen positions during FY 09-10 $ 2,000,000
• Reduction in Force of 27 employees $ 1,625,000
• 5% Budget cuts for Schools, CFCC, and SE Center for Mental Health $ 3,805,318
• Miscellaneous Decreases $ 2,097,000
• Total Decreases $ 15,414,432
Between Year Adjustments:
• Schools adjustment (increase in debt service/decrease in projected sales tax) $ (1,632,213)
• Adjustment for salaiv lag in FY 09-10 $ (1,211,818)
• Adjustment for increase in last year's market adjustment for FY 09-10 $ (600,000)
• Total Between Year Adjustments $ (3,444,031)
• Total Economic Downturn Budget Reduction Plan $ 11,970,401
The Board briefly discussed other budget concerns:
• Impact of voter approved school bond referendum on budgets for next five to seven years
• Fire Service District - Indirect costs of $600,000 to be passed on to taxpayers in the unincorporated area for
fire services (includes costs of internal services of Human Resources, Finance, Budget, IT, and Property
Management)
• Mandated programs cost 80% of General Fund Budget
• Human Relations, a non-mandated program, costs $450,000 a year
• Revenue Option of 1/4 cent Sales Tax Referendum for FY 2011 ($7 to $8 million)
• Federal Stimulus Package allocated through the Governor's Office
Consensus: A majority of the Board did not support a tax increase to cover the shortfall because of the impact it
would have on citizens who are struggling during the current economic downturn. However, Commissioner
Barfield believed that a tax increase may be needed and requested more information on other options. He did not
support a reduction in pay for County employees through the use of furlough days.
In conclusion, County Manager Shell pointed out additional factors that the Board should consider during
the budget process:
0 Spending cuts in quality of life departments are difficult to make up
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
BUDGET WORK SESSION, MARCH 16, 2009
BOOK 31
PAGE 572
Loss of $1 inillion in Article 44 sales tax revenues as part of the Medicaid/Sales tax swap in FY 2011
Operational challenges for each department with less employees
Budget Work Session Scheduled
In discussion of the budget process, the Board scheduled a tentative budget work session to receive further
updates on April 20, 2009, after the Regular Board Meeting.
ADJOURNMENT
There being no further discussion, Chairman Davis adjourned the meeting at 11:50 a.m.
Respectfiilly submitted,
Teresa P. Elmore
Deputy Clerk to the Board