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2019-01-08 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JANUARY 8, 2019 PAGE 273 ASSEMBLY The New Hanover County Board of Commissioners held a Special Meeting with the County’s Legislative Delegation on Tuesday, January 8, 2019, at 8:30 a.m. in the Harrell Conference Room at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present: Chairman Jonathan Barfield, Jr.; Vice-Chairwoman Julia Olson-Boseman; Commissioner Patricia Kusek; Commissioner Woody White; and Commissioner Rob Zapple. Staff present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; and Clerk to the Board Kymberleigh G. Crowell. State Legislators present: Senator Harper Peterson; Representative Ted Davis, Jr.; and Representative Holly Grange. The following 2019 and 2020 legislative priorities of the County were reviewed with discussions as noted: Support for the state to develop a dedicated funding source for its policy commitment to coastal storm  damage reduction projects as authorized by the General Assembly in 2018. New Hanover County can best plan and budget for its obligations based on the reliability and best estimate of state support for each year the county pursues an authorized nourishment project. The board finds that redirection of existing revenues from a permanent source, or a new funding source established for statewide stewardship endeavors serves the county’s needs. Representative Grange stated that her research assistant is working on the issue of a dedicated funding source for beach renourishment. She asked that any information the County can send to her and Representative Davis to help with their work on this issue would be appreciated. Representative Davis stated that the County has a funding source for shallow-draft inlet dredging through the gas tax and boat registration fees. However, there is not one for beach renourishment. People in non-coastal areas of the state do not understand the need for beach renourishment. There is a need to educate people about it even though it is more and more on people’s radar. He would like to see a dedicated funding source and would like to receive some suggestions from the County. It is a complicated issue due to all the parties involved and that only three dredges are available for the entire east coast. County Manager Coudriet stated he can offer some options on this issue. It is his understanding that the legislature is going to be challenged with what to do about the Parks and Recreation Trust Fund in terms of the governance committee as well as the Clean Water Management Trust Fund. Those dollars at this point are in limbo. As the legislature is contemplating how to reconstitute those boards, it may also set the opportunity to, as opposed to finding new revenue, appropriate some of the dollars from one or both of those funds to go toward a permanent source of funding on coastal storm damage reduction. There is some question as to whether or not the dollars from the funds can be appropriated right now because those boards went away. The County would appreciate any work of the local delegation to shape the policy on this front. As a statewide application, County Manager Coudriet thinks it would have to be a revenue source that is focused on general stewardship across the state, possibly through a statewide prepared meals tax or a seasonal revenue source where the dollars could be accrued and invested equitably across the state within specific parameters. Support for the state to re-examine its policy structure to support the North Carolina film industry to  ensure that it grows and prospers locally, as New Hanover County has the physical assets and workforce firmly established. The film industry is best supported through speed, certainty and predictability in access to the state’s film policy; therefore, a competitive grant process limits the viability of film projects that move quickly and consider many locations simultaneously across the globe. The board does not object to a cap in annual appropriations that is consistent with best and prior year performance, and grows with scaling of the industry itself. \[Additionally, the board finds based on evidence it hears from the film industry, the industry is challenged by the effects of House Bill 142 that regulates private employment practices or regulates public accommodations and limits local governments from implementing ordinances that prohibit discrimination except in accordance with an act of the General Assembly.\] Chairman Barfield stated he would like to see the funding for the film industry restored to the original levels. The film industry has been good for this region. Representative Davis stated that one of the biggest drawbacks is that the funding was called a tax credit. It is a refund, not a tax credit. He provided an overview of the funding history from when he started at the legislature to now. Currently, there is $31 million budgeted on a recurring basis in the state budget. However, it is not enough to bring back major productions without increasing the amount. He was on the team for the House that was involved in the negotiations between the Senate, House, and the Governor’s Office on House Bill 142. He stated that what needs to be understood is that part of House Bill 142 does not allow local governmental entities to do anti- discriminatory ordinances. This was agreed to by the Senate, House, and the Governor as a partial repeal of House Bill 2 and it needs to be understood that the Governor agreed to House Bill 142. In an upcoming meeting he has NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JANUARY 8, 2019 PAGE 274 scheduled, a discussion will probably arise about expediting the provision which sunsets in 2020. He is in constant contact with Bill Vassar with Screen Gems Studios and Johnny Griffin with the Wilmington Regional Film Commission on this matter. Representative Davis further stated if the original funding system could be put back into place, there would be a chance to have the major productions return. He would like to try again to get this through the House as well as the Senate this time. He also thinks it would be good for House Bill 142 to be addressed. Support for a statewide school bond of no less than $2 billion at the earliest possible time in accordance  with state statutes. New Hanover County and its school system in 2016 identified in excess of $400 million of school construction needs over the next 10 years. The taxpayers of the county are best served if the state authorizes a statewide school bond with a fair share allocated to New Hanover County schools to aid in its real and pronounced school construction needs. The board expects to proceed with a commitment to a new middle school within the next 12 months with existing revenues, and expects to place a bond referendum before the voters by November 2020. A brief discussion was held about the statewide school bond for construction needs. Representative Grange stated she thinks this will be considered, but is not sure at what level. She supports it but it is a matter that will take great negotiation. Representative Davis stated that Speaker of the House Tim Moore is 110% behind it. Senator Peterson said the leadership in the Senate Minority Caucus is behind it as well. Support for the state returning to the original Education Lottery formula for school capital: 40 percent  set aside. The state currently caps the amount of lottery funds that go toward the Public School Building Capital Fund at $100 million annually. The original formula would equate to $298 million for the school capital fund based on fiscal year 2019 lottery spending. Support for more funding from the state and equitable access to high quality childcare and early  childhood education for young persons in New Hanover County. The county has assumed a greater role with early childhood education through a county-sponsored expansion for 3 year olds, and finds the state has a responsibility to expand overall support for childcare and early education to ensure equity. New Hanover County has established a goal that no less than 75 percent of children are ready for kindergarten on the Kindergarten Entry Assessment. Support for fair, equitable, and cost effective access to health care services especially for those that do  not have access to employer-sponsored health coverage. The board finds that a federally-supported expansion of Medicaid for those not eligible for subsidies via the healthcare exchange is the most immediate path to providing access. The timing is right for Medicaid expansion as the state has received approval from the Centers for Medicare/Medicaid Services (CMS) for Medicaid managed care to begin in 2019. The aim of reform is to more effectively manage Medicaid cost. Partial savings from the CMS waiver can be applied to the non-federal share of Medicaid expansion. A brief discussion was held about the state not accepting the federal dollars as other states have for Medicaid expansion. Representative Grange stated she believes the issue is that the dollars are not indefinite. Eventually the state will have to figure out how to continue funding at whatever dollar amount it was receiving from the federal level. Her concern with Medicaid expansion is that there are a lot of doctors who do not accept Medicaid and/or Medicare. If Medicaid is expanded to recipients who are able-bodied, childless adults, that is taking away access to care from those who really need it such as disabled people and children. It needs to be looked at from a higher view in terms of the unintended consequences. Something does need to be done, but Medicaid expansion may not be the way to improve the access to care for the people who do not have it right now. Representative Davis stated that it will not be 100% federally funded and the state will have an obligation. One of the concerns the Republicans had on this issue is that it is unknown what the federal government will do about not raising what the state will have to pay. Not having this information and moving forward with the expansion may result in the state having more debt that it would be responsible for paying, if Congress raises the amount of what states have to be responsible for. Support for the state reinstating its financial support for drug treatment courts. The county has  operated a drug treatment court successfully since the state withdrew funding support for treatment courts in 2011 by stepping in and fully funding and staffing a drug treatment and DWI court for county residents. Treatment courts are considered an extension of the judicial system, and the state has the primary duty to fund the court system and its associated services. Chairman Barfield stated that the County continued funding the local drug treatment court in the amount of $114,000 to $120,000 per year when the state cut funding. With the rise of the opioid epidemic, it would good if the state reinstated the funding for that court. It would free up the County’s funds and allow the County to do additional work to address the opioid epidemic. Representative Davis stated that in the House, that request would first go through the Justice and Public Safety Committee. Committee appointments have not been made, but last time he was chair of the committee. If he is appointed to the committee again as the chair, he would be in a good position to move this piece of legislation forward. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JANUARY 8, 2019 PAGE 275 In response to questions about how much funding would be needed, County Manager Coudriet stated that the budget has grown since the Board accepted the driving while impaired (DWI) court in addition to the drug treatment court. It is now on the order of several hundred thousand dollars. The County is also trying to move into a mental health court to look at this issue on a more comprehensive basis. Representative Davis stated he needs to have the data and needs to know the dollars in order to make the recommendation. Representative Grange agrees that this a good program and the funding should be pursued. She also agrees with bringing the mental health side into it. Supports the state fully funding service requirements necessitated by “Raise the Age,” which takes  effect December 1, 2019. The county has committed to constructing a new juvenile justice building to aid in meeting the needs of young men and women that will now be considered juveniles in the eyes of the court. The implications of the age change can only be effective if the state adequately funds service and personnel. Supports legislation for increased state funding for transportation construction and maintenance needs  for New Hanover County and the Greater Wilmington area. The board further finds that it is imperative for the Strategic Transportation Investment funding formula recognize urban and rural differences as one size does not fit all local and regional transportation needs. New Hanover County’s population is expected to grow to 357,000 people by 2040. Supports the state addressing drinking water quality including increased funding, resources, and  enforcement for emerging contaminants, and to establish health advisory levels for these emerging contaminants. Commissioner Kusek stated one of the most important priorities to her, and that everyone can agree on, is the need for clean water. The County needs the local delegation’s support in holding the people who caused the issue responsible. Representative Grange said all that can be done at the legislature level is to put the laws in place. They do not execute the laws. It is up to the North Carolina Department of Environmental Quality (NCDEQ) to hold the people responsible accountable. It is NCDEQ not doing what it should be doing. Representative Davis said he asked NCDEQ what Chemours had to do before it would shut the company down and NCDEQ will not do it. The legislature continues to be bombarded with the rhetoric when it is not the entity that can make NCDEQ do something. However, the Governor can as the Governor appoints the NCDEQ Secretary. The consent order does nothing to protect and help New Hanover County. There are no guarantees just because a consent order is in place. Legislation cannot be designated for one business; it to be has made statewide. He is open any suggestions. Again, he is disappointed that the consent order does not do more for New Hanover County. Part of the issue, which he has learned about in the water quality meetings, is that it is a multi-step procedure to shut a company down. Support for the elimination of solid waste provisions found in House Bill 56 that limit the county’s ability  to effectively manage its solid waste and meet the service expectations of its residents and businesses. The County can only require flow control when it has outstanding solid waste debt, and it can only issue debt for future solid waste investments when it demonstrates to the Local Government Commission that it can operate a lower per rate ton than an unknown private sector operator. Issuing debt is not always necessary nor in the best interest of the solid waste enterprise; however, ensuring the county’s authority to direct placement of municipal solid waste does enable customers to receive the lowest possible cost for disposal. In response to questions, County Manager Coudriet stated that this legislative priority is looking forward. The County’s landfill still has protection until approximately 2020 due to having outstanding debt on the WASTEC facility and other pieces of the landfill operation. Due to the provisions in House Bill 56, once the debt expires, the County no longer has the ability to direct where the municipal solid waste would go. As such, the viability of operating the landfill will be brought into question. The County’s debt will expire in approximately 18 months. He further explained how the County can require flow control, when it can issue debt, and how ensuring this authority to direct placement enables customers to receive the lowest possible disposal cost. There are 44 to 45 counties in the state that will be affected by this legislation. Representative Davis asked that County Manager Coudriet provide him with proposed language that the County would like to see in the form of legislation. He will see if there is support in Raleigh once he has received the proposed language and noted that it would be a statewide bill. A brief discussion was also held about the environmental management enterprise fund. Commissioner White stated in addition to the local delegation trying to find consensus on an amendment to House Bill 56 relative to flow control, he would also like to see a provision enacted that frees up the excess cash in the environmental management enterprise fund. The County has accumulated approximately $6 million in this fund. Tip fees have been dropped five of the last six years. The current setup incentivizes saving money and running it like an enterprise. When that is done, it de-incentivizes because nothing can be done with the cash. The County has bought all the equipment, parts, etc. and taken care of all the future obligations in terms of post-closure costs and liabilities that it can. There is still this large amount of money in the fund that the County is not allowed to spend. One idea is to allow NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, JANUARY 8, 2019 PAGE 276 more flexibility for county managers to tap the cash, one time, over a three to five-year period to use it for general governance purposes and at the same time put more control at the local level. In response to questions, Commissioner White stated if this flexibility was allowed the funds could be used for schools, stormwater maintenance, general education, etc. He thinks the allowance would be done by the County Commissioners voting to appropriate the funds in the normal course of business. Again, the funds have been used for everything that is allowed within the environmental management enterprise fund. Funds have also been set aside for rainy day needs and closure costs are built into the tip fee. The Local Government Commission (LGC) does not require a minimum amount/percentage be in the fund, but the County would want to maintain the fund at a certain amount. Representative Davis asked that proposed language be sent to him about the environmental management enterprise fund. He will work with the legal research and bill drafting departments to make sure it is legal and has the appropriate language. He is not sure it can be a local bill. General Discussion and Wrap Up: Commissioner White stated he thinks where the local delegation can have the most meaningful impact on this community is through planning for the expected future growth via 1) continuing to fund the Wilmington International Airport, traffic, and infrastructure and 2) a dedicated funding stream for beach renourishment. He thinks those areas are where the local delegation can have the most impact on this community. Discussion was held about how to effectively address the projection that New Hanover County is expected to grow by 50% by 2040. Senator Peterson stated that areas such as climate change in relation to the storms, public transportation, housing, and a living wage will need to be addressed in order to be ready for the forthcoming growth. Chairman Barfield stated that the County’s 2016 Comprehensive Land Use Plan is going to help drive how New Hanover County is developed moving forward. Regarding the living wage, last year the County increased the budget to increase the minimum wage for all employees to $15 per hour and the action affected just over 100 employees. He also acknowledged that the state took a similar action for its employees. Commissioner Zapple stated that he agrees with the clean water and education funding priorities. He also agrees with Commissioner White in that the local delegation needs to keep focus and try to do what is possible in the legislature on funding for the airport and coastal storm damage reduction. He would also like the local delegation to look at freeing up the funds in the recurring budget designated for the Community Conservation Assistance Program (CCAP). The program has a huge impact on the environment and the funds will help the program expand its work. Senator Peterson and Representatives Davis and Grange thanked the Board for the opportunity to meet. Chairman Barfield thanked everyone for meeting to discuss these issues. ADJOURNMENT There being no further business, Chairman Barfield adjourned the meeting at 10:00 a.m. Respectfully submitted, Kymberleigh G. Crowell Clerk to the Board Please note that the above minutes are not a verbatim of the New Hanover County Board of Commissioners meeting.