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2020-01-21 Regular Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 455 ASSEMBLY The New Hanover County Board of Commissioners met in Regular Session on Tuesday, January 21, 2020, at 9:05 a.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington, North Carolina. Members present: Chair Julia Olson-Boseman; Vice-Chair Patricia Kusek; Commissioner Jonathan Barfield, Jr.; 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. INVOCATION AND PLEDGE OF ALLEGIANCE Reverend Dr. Patricia L. Freeman, St. Phillip AME Episcopal Church, provided the invocation and Chair Olson- Boseman led the audience in the Pledge of Allegiance to the Flag. APPROVAL OF CONSENT AGENDA Chair Olson-Boseman asked the Board if there were any questions or comments regarding the Consent Agenda. The following discussions were held: Consent Item #5: Appointment to New Hanover County Fire Rescue Firefighters Relief Fund Board: In response to Board questions, Fire Chief Donnie Hall stated the Firefighters Relief Fund Board consists of two members elected by the Fire Department, two appointed by the Commissioners, and one appointed by the North Carolina Commissioner of Insurance. The current members are Captain Steve Arone, Battalion Chief Rudolph Shackelford, Chief Financial Officer Lisa Wurtzbacher, and Ed Vosnock. Consent Item #6: Approval of New Hanover County Board of Education Amendment to an Application for the North Carolina Education Lottery Funds: Commissioner Barfield commented that funds will be spent to help build and repair Sea-Tech, utilizing the request for lottery funds from the state. The funds received are appreciated from those playing the lottery. Hearing no further discussion, Chair Olson-Boseman requested a motion to approve the Consent Agenda as presented. Motion: Commissioner Barfield MOVED, SECONDED by Commissioner White, to approve the items on the Consent Agenda as presented. Upon vote, the MOTION CARRIED UNANIMOUSLY. CONSENT AGENDA Approval of Minutes – Governing Body The Commissioners approved the minutes of the Regular Meeting of January 6, 2020. Approval to Request Grant Funds from the Department of Homeland Security/Federal Emergency Management Agency – Sheriff’s Office The Commissioners approved the Sheriff’s Office submission of an application for the 2020 Homeland Security, Port Security grant program for a three-year grant. The total amount being requested is $543,488 with a 25% match. The match will be included in the FY20-21 budget request. Grant funds $407,616 25% match $135,872 Total $543,488 The funding request includes Marine Unit equipment and boat slip, Dive Unit equipment, and Emergency Response Team night vision and communication system. Adoption of National Radon Action Month Proclamation – County Manager The Commissioners adopted a proclamation recognizing January 2020 as National Radon Action Month in New Hanover County. A copy of the proclamation is hereby incorporated as part of the minutes and is contained in Exhibit Book XLII, 2.1. Approval of the First Reading of a Solid Waste Franchise for Top Shelf Waste Systems Inc. – County Attorney The Commissioners approved the first reading of a solid waste franchise to be granted to Top Shelf Waste Systems Inc. Pursuant to Section 44-55, the applicant has provided information about his business organization, equipment, personnel, and fiscal responsibility. The Environmental Management Director and the Chief Financial Officer have no objections to the franchise request. The initial franchise period would run for seven years. A copy of the franchise agreement is available for review in the legal department. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 456 Appointment to the New Hanover County Fire Rescue Firefighters Relief Fund Board – Fire Services The Commissioners appointed Chief Human Resources Officer Mark Francolini as a trustee member of the New Hanover County Rescue Firefighters Relief Fund Board to fill a vacancy. The North Carolina Department of Insurance administers the North Carolina Fire Department Relief Fund Program. Fire Departments receive 20% of the gross premium assessment collected on insurance policies containing fire and lightning protection for the fund. A local board of trustees provides oversight of the benevolent fund. In accordance with North Carolina General Statute (NCGS) 58-84-30, the New Hanover County Board of Commissioners shall appoint two trustees to the New Hanover County Fire Rescue Firefighters Relief Fund Board. The trustee appointments do not have term limits and may be replaced as needed. Chief Financial Officer Lisa Wurtzbacher serves as one of the appointees. Approval of New Hanover County Board of Education Amendment to an Application for the North Carolina Education Lottery Funds – Finance The Commissioners approved the New Hanover County Board of Education Amendment to an application for the North Carolina Education Lottery Funds. The Commissioners approved an application for the North Carolina Education Lottery Funds for Sea-Tech Phase III Renovations for $1,213,900 on September 16, 2019. Phases I and II of Sea-Tech Renovations were also funded through the North Carolina Education Lottery and have combined project savings of $265,564.25. The Board of Education proposes using the project savings from Phase I and II for Phase III so that the full scope of work can be completed. On January 7, 2020, the Board of Education approved the amended application in the amount of $1,479,464.25. Once approved, the amendment will be submitted to the NC Department of Public Instruction. A copy of the amendment is hereby incorporated as part of the minutes and is contained in Exhibit Book XLII, 2.2. REGULAR ITEMS OF BUSINESS PRESENTATION OF SERVICE AWARDS AND INTRODUCTION OF NEW EMPLOYEES County Manager Coudriet requested the following employees to step forward to receive service awards: Five Years: Jeffrey Hartsell, Environmental Management Kelly Henry, Building Safety Anna Zell, County Attorney’s Ten Years: Tara Duckworth, Parks and Gardens Fifteen Years: Virginia Carey, Sheriff’s Office Marie Hemmen, Public Health Twenty-Five Years: Arthur Malpass, Building Safety Paula Marn, Social Services Thirty Years: Beverly Thomas, Finance Chair Olson-Boseman presented a service award to each person and the Commissioners expressed appreciation and thanked each one for their years of dedicated service. County Manager Coudriet requested the following new employees to stand and be introduced: Patricia Bassett, Finance Brandon Evans, Environmental Management Karen Green, Social Services Stephen Hallock, Property Management Jesse Hudson, Property Management Monifa Johnson, Social services Barbara Kelley, Finance Kiara Kelly, Community Justice Services Margaret Knight Social Services Mary Lynn Lawler, Public Health Catherine Morgan, Public Health Precious Smith, Social Services Stephanie Teachey, Social Services Donna Theusch, Social Services Torrance Ward, Parks and Gardens The Commissioners welcomed the employees to County Government and wished them success in their new positions. PARTNERSHIP ADVISORY GROUP (PAG) UPDATE PAG Co-Chairs Barbara Biehner and Spence Broadhurst thanked the Commissioners for the opportunity to provide an update. Vice Co-Chair Dr. Joseph Pino and Member Brian Eckel were also present. Co-Chairs Biehner and Broadhurst provided the following update:  PAG Charter: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 457  On September 16, 2019, the New Hanover County Board of Commissioners passed a resolution to explore partnership options for New Hanover Regional Medical Center (NHRMC)  The resolution established a Partnership Advisory Group to manage this process, with responsibilities including:  Evaluation of the full spectrum of strategic options, including options to partner and options to remain independent  Development and distribution of a Request for Proposal (RFP)  Evaluation of RFP responses  Communication of a recommendation to the Board of Commissioners and New Hanover Regional Medical Center Board of Trustees  PAG Community Members: Virginia Adams, PhD, RN; Spence Broadhurst; Evelyn Bryant; Bill Cameron; Pastor Robert Campbell, Cedric Dickerson, Jack Fuller, Hannah Dawson Gage, Meade Horton Van Pelt  PAG Physician Members: Sandra Hall, MD; Michael Papagikos, MD; Joseph Pino, MD; Mary Kathryn Rudyk, MD; Robert Shakar, Jr., MD  PAG NHRMC Trustees: Barb Biehner; Brian Eckel; Tony McGhee; Jason Thompson; David Williams  NHRMC and County Leadership Representatives: New Hanover County Manager Chris Coudriet; NHRMC President and CEO John Gizdic  Goals and Objectives:The Advisory Group has endorsed 10 goals and objectives, which tie to the mission, values and strategic plan of NHRMC as well as the corresponding public health mission and strategic planning of New Hanover County. The 10 goals establish a framework that can be used to evaluate proposals from other health systems  Improving Access to Care and Wellness: Add to the number and range of care options in the region so everyone can get more timely and convenient care to better manage their health  Advancing the Value of Care: Improve the quality of care while lowering costs through systems to improve efficiency, safety, and coordination across care providers  Achieving Health Equity: Eliminate the demographic disparities in healthcare outcomes by targeting the root causes of poor health and partnering with others in the community to develop and support innovative programs  Engaging Staff: Ensure the culture of the organization is continued and strengthened, with a focus on developing and engaging staff and supporting them with job security, competitive pay and excellent benefits  Partnering with Providers: Support the growth of the medical staff through recruitment, medical education, employed and independent provider engagement initiatives, and clinical research  Driving quality of care throughout the continuum: Provide consistent high-quality care and coordination through every step of a patient’s care  Improving the level and scope of care: Protect and strengthen the services available to area residents and bring new and innovative technologies and programs to the region  Investing to ensure long-term financial security: Gain access to capital and resources to sustain growth and allow NHRMC to meet the needs of the region while withstanding cuts to reimbursements and adapting to changes in the healthcare industry  Strategic positioning: Develop NHRMC’s position by maintaining and expanding partnerships with other healthcare providers in the region and adding new services that can enhance the area’s economic development and grow the local employment base  Governance: Establish the most effective form of governance to preserve and advance local interests, maintaining local control and decision-making for hospital-based provider contracts, joint ventures and other physician contracts and agreements  Request for proposal and strategic options assessment:  Responsibilities overview: During this process, the PAG will explore both potential partnerships and scenarios to remain independent Request for Proposal (RFP) Strategic Options Assessment Purpose Explore future sale, partnership, change in structure, or status quo of NHRMC Process Develop an RFP to solicit proposals from Understand NHRMC’s progress • • potential partners to understand if they against its strategic objectives could further NHRMC in achieving goals Determine additional initiatives, • and objectives as a community resources needed, and healthcare organization organizational changes required to Review and evaluate RFP responses and achieve goals and objectives as a • potential partners community healthcare organization If a sale or partnership is chosen, PAG Evaluate strategic outlook of • • would oversee the transaction steps with NHRMC as an independent entity the designated strategic partner(s) Result Recommend a go forward plan for NHRMC to New Hanover County and NHRMC Board of Trustees including the possibility of a sale, partnership, change in structure, or remaining independent  RFP Document:  42-page RFP approved by PAG on January 9, 2020  Questions for the RFP were drafted for each of the 10 goals NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 458  Respondents will be asked to describe how their proposed strategic partnership will impact or advance these goals so the community can weigh the benefits and risks of each proposed option  Draft RFP components were shared publicly on NHRMCFuture.org starting in December 2019  The public is welcome to contact the Advisory Group by emailing: PAGComments@nhcgov.com  Overview of next steps:  RFP distributed January 13, 2020, with responses due by 5:00 p.m. on March 16, 2020  Responses will be reviewed in draft form, allowing 1-2 weeks for clarification before finalized and posted to public website, www.nhrmcfuture.org  During this time, the PAG will review and discuss NHRMC strategic options, including continuing status quo or completing an internal corporate restructuring Chair Olson-Boseman thanked Co-Chairs Biehner and Broadhurst for providing the update and opened the floor to Board discussion. Regarding questions about the PAG support team makeup, Co-Chairs Biehner and Broadhurst stated the team consists of individuals from New Hanover County and NHRMC to help with administrative work on a daily basis, as well as keep the website updated. There are also outside resources to help with the process such as a strategic advisor, a financial advisor, and legal advisors. Navigant is the strategic advisor, has worked with NHRMC’s strategic plan for many years, and is a very strong healthcare advisor as they understand the environment and culture across the country. Ponder & Company is the financial advisor which was selected by the PAG. In response to Board questions about whether an executive summary will be provided to the PAG for each of the potential 28 respondents, Co-Chair Broadhurst stated that all of the respondents to the RFP are public documents un-redacted from the advisory group. If there is proprietary information that the respondent identifies, it will be evaluated by the PAG support team. The number of responses could be more than 28 and will be received unfiltered. Executive summaries will be provided to the PAG in addition to the full responses and the public will get the full responses. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 459 In response to Board questions regarding who makes the decision for what should be redacted, Co-Chair Broadhurst stated the County, NHRMC, and PAG will not redact anything. However, if the respondent has information in the response that is proprietary and believes should be protected by law, the legal team that supports the PAG will review the information to verify whether it should be redacted and will make the final judgement. County Manager Coudriet confirmed that was correct and added that it is governed by a statutory framework to allow for healthcare organizations to redact certain information from the public. The key to that is their strategic positions, plans for growth, and finances. The burden is on the proposers to identify what should be removed from the public record, and short of that identification, it will be available to the public. Co-Chair Broadhurst stated the PAG’s commitment from the beginning is transparency in every way that it can be transparent. After the responses are in, a public hearing will be held and the public is encouraged to read the responses to the RFP and provide comments to the PAG. The community does not have to wait until the Commissioners hold the public hearing to provide input. Regarding Board questions about why the minimum list of services on page 20 of the RFP provided by NHRMC is not reflective of the full services provided to the community, Co-Chair Biehner stated it was a suggestion for the PAG to identify key areas, but it is also open ended for any other ideas. If every service was listed, the RFP process would have been overcome and potentially doubled or tripled the size of the document. As such, the services identified were the ones core to the area knowing that this is at least a tertiary business on the hospital side and a partner would be looked for to possibly expand those services, and one that provides the services that NHRMC is unable to do and due to the size of the population in the region, would not do. They are looking for a partner who could help provide comprehensive services. Discussion was held regarding the six deliverables from the PAG. Co-Chair Broadhurst stated the most important deliverable is the last one, which is a recommendation to the County Commissioners and the NHRMC Board of Trustees (BOT). Things need to be done in order to get to the last deliverable, which includes looking at options with a partner or to remain independent. The PAG is committed to looking at all the options available which are completely outside of the RFP process. County Manager Coudriet stated two of the deliverables called for in the charter have been accomplished. The first being the development of an actual RFP and the second being the list of potential proposers, both adopted unanimously by the PAG. To the Co-Chairs’ point, the final deliverable will ultimately be a recommendation that includes a recommendation as to whether or not there are things within one or a range of proposals that are, from the PAG perspective to the Commissioners, worth a deeper dive and a move forward with some sort of evaluation and set of negotiations. Commissioner Zapple stated that on page 28 of the RFP, he feels the first sentence could be further clarified to explain the process the PAG is now in and asked that it be reviewed again as it is important for the public to understand what stage the PAG is currently in while the RFP is out. Commissioner Barfield thanked the PAG for their hard work and stated it is commendable what they are doing on behalf of the community. He is pleased to see great diversity of thought amongst the members and that a wide range of options are being looked at. He asked what the timeline is to reach the last deliverable. Co-Chair Broadhurst responded there is a fluid nature to the timeline as this is one of the biggest decisions for the Board to face in probably a generation. There is a lot of information coming to the PAG and it was felt it was important to have structure to the process with a targeted timeline to hold itself accountable for the deliverables committed to th the Board. For example, the RFP had a target of going out by the end of 2019 and it was actually out on January 13. During the time the RFP is out, the PAG will delve internally into what the gaps are and how to move forward. th Although it is unknown how long it will take to review the responses, which again are due by March 16, the target th timeframe is March or April. The preliminary agenda is set through March 16. While the review process could move fast, it is anticipated there will be a lot of information to absorb and discuss, so it may move slower. The PAG is very diverse, focused, and has committed to doing work. Commissioner Barfield stated he recognizes the need of the organization to be relevant, on the cutting edge, and have more resources than what is being spent. NHRMC is constantly looking at options to be sure down the road it is financially viable for the community. He thanked the PAG for their time and is looking forward to what is next. Commissioner Zapple asked the Co-Chairs to explain why the in-depth review of NHRMC is being done now rather than prior to the RFP being created as some citizens have asked him the question because they felt the information may have eliminated some of the RFP questions or help guide it. Co-Chair Biehner stated as a member of the NHRMC BOT she can confirm it has been given a hard look for a long time by the NHRMC BOT. This is not the first time it has been brought up that there is a need to look at how the structure should be different going forward. The PAG has to do it and there are very few members beyond the hospital leadership that understand all of the details. It is also an opportunity to review all of the components in the strategic plan so the members have the same understanding. Co-Chair Broadhurst stated the PAG committed upfront that it was essential to get all of the information available from different sources, opinions, and articles. From a timing standpoint and in his opinion, it seemed logical to ask the question of the potential respondents and while the RFP is out, allows the PAG time to dig into researching staying independent and understanding the gaps without a lapse of time. In his opinion, this is an issue that is dominating conversations in the community to a certain extent and is a distraction for all hospital employees who have serious work to do. In order for it not to be a disservice to those employees and the community, the PAG owes it to them to work through this at its pace, but as expeditiously as possible to get to a recommendation. Co-Chair Biehner stated the RFP is one of the business components of what is being done. While the RFP is out, the PAG can review in detail the critical pieces of the goals and what is needed to serve the community and region. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 460 Chair Olson-Boseman thanked Co-Chairs Biehner and Broadhurst and the entire PAG members for their commendable work. In response to Board questions, NHRMC President and CEO John Gizdic provided clarification on the timing of the PAG being formed and the process behind the exploration of what is best for NHRMC. The process and exploration of what is best for NHRMC has been occurring at least for the 15 years he has been with NHRMC, if not longer of trying to understand from governance and ownership perspectives the best way to serve the citizens of the region. There have been strategic plans and assessments done to understand how to best position the organization for generations to come. There have been regular conversations over the years with the Commissioners to review what is working well, what are the challenges, and what it will take to remain a strong health system for this community. This specific process, while specific components have been discussed for years and how best to position NHRMC, is guided entirely by state statute. The steps along the way followed state statute specifically, including the timing of the announcement. It was done well beyond what was required by state statute, allowing more time for community discussion and the Commissioners vote for the resolution. The PAG is not required by state statute and is something the Commissioners did proactively in trying to ensure a thoughtful, deliberate, and transparent process as all options are explored. While the sale of NHRMC seems to be the focus of the community, it is not the only option being explored. Mr. Gizdic believes a wide range of options will be seen from the respondents to the RFP, which is good and exciting for NHRMC and the community. The PAG was an outstanding approach to put in place to ensure there is diverse representation from the community, medical staff, and NHRMC BOT to look at everything the community needs in the medical center and healthcare services. The goal is not for the PAG to all be healthcare experts and the value in the PAG is bringing diverse perspectives to the table, which has been seen from the meetings. The perspectives, opinions, and debates have been invaluable and have resulted in an outstanding RFP of 42 pages and 228 questions to ensure the information received helps the PAG make the best informed recommendation. Commissioner White stated that a hard concept to explain to the community is the propriety nature of the healthcare system, monetary and non-monetary values, the goodwill real estate value, and all of the competitive questions that entities might look at to partner, to acquire, help, or assist. While being easy to say the PAG should have been formed six months or a year ago, that is not how it works. There is a state statute that sets out exactly what has to be done. He asked Mr. Gizdic if it was fair to say if the conversations are held publicly in an informal and unofficial manner, the outside looking in has a competitive advantage over this asset. Mr. Gizdic confirmed it is a fair statement. Commissioner White further stated the RFP is a legal trigger that a public entity puts out at a certain time of day for a certain amount of time, and the public sees it for the first time. It is requesting a proposal to be submitted by a specific date and time and has to be a formal process. He commended Mr. Gizdic and his staff for the work they have done and the PAG for being a diverse group of race, industry, age, and gender. It is a remarkable group and is positioned to provide a recommendation which will be transformational for the community. If a status quo is recommended, it still will have been an incredible learning process that will better guide NHRMC. Regarding the community conversation that there have been secret meetings and that the sale of NHRMC is already done, Mr. Gizdic stated as seen by Board action on the resolution, with the formation of the PAG, and the RFP that is in place and with the list of 28 organizations interested, there is not a done deal and no decisions have been made ahead of time. This matter is following the state statute and process that has been established. The PAG members have been very clear they are not a rubber stamp group and have not signed up to rubber stamp anything. They take this extremely seriously, are putting in a lot of hours, and will make a very thoughtful, fact-based recommendation. By the process that is in place, hopefully the community can see nothing was done ahead of time, there are no secret deals, and there is not a done deal. The best solution and option for the organization and community is being looked for. As to whether there are PAG members that are opposed to the sale of NHRMC, Mr. Gizdic responded yes, there is diversity of thought. There is healthy skepticism amongst PAG members on what is the best option. The PAG did something thoughtful in the RFP by not suggesting any preferred model and intentionally left it up to respondents to propose any type of model. This will be helpful as it does not limit the responses that are received as well as the types of options and models seen. As to how NHRMC staff feels about this issue, Mr. Gizdic stated this type of process creates anxiety, which is not only a distraction for the community, but also the organization. What he thinks is being done in the community by some of the negative narrative being discussed is tarnishing the reputation of a great organization. Staff hears what is in the news, the rhetoric in the community, and on social media. What needs to be remembered is what is most important for this healthcare organization is caring for patients and building their trust so that they are not worried about what they are hearing in the community. To the degree there can be civil conversation and explore things from a fact-based perspective will help everybody, including the staff and patients. Commissioner White stated he interprets the phrase “retaining or giving up local control” as potentially giving up political control. He stated he would never support giving up local control of an administration that did not live here or allow fundamental decisions relative to access, etc. being off loaded somewhere else. He encourages people to think through what that means as it relates to political control. Currently, this Board in general has political control over NHRMC and appoints the Trustees. At times it works well, sometimes it has not, but it is an antiquated and outdated model. When it is heard in the community that local control is going to be lost, that is false. Every community in the nation that has a hospital has local control of some kind. For example, their administrators are embedded in the community, they partner with the community, and lead their community to outstanding health. Every community has and should have local community control. What is being looked at is giving up political control, which upsets some on the Board and in the community. With politics out of the equation, there is a better hospital NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 461 that is a-political, with increased access of care, and increased services to reduce travel to other communities for service. He understands it is controversial and emotional, but he expected as it unfolded, that the community would embrace this because of the potential to have better care and more services for a growing, vibrant community. It is what the process should have been and he hopes is going to be about. In response to Commissioner White’s comments, Mr. Gizdic stated it is an important distinction between the current governance structure and local control from that definition versus maintaining local control in some other way. In the RFP, local control is squarely in there and is important to everyone how it is defined and looks like. The next phase for the PAG is to look at best practices, various governance approaches, and other organizational structures to discuss finding ways to modernize the structure and governance approach. NHRMC has been fortunate to be successful over 52 years under the current structure. It is the largest county-owned hospital in the country that does not receive a local tax subsidy, which makes it unique. He believes the question always needs to be asked of whether this will be enough to make it successful in the future and thinks that is what is being done, what the process is about, and is the focus of the PAG. Commissioner Barfield stated as to local control, he thinks everyone has their own thoughts of what that means. Having served on the NHRMC BOT, he understands the need to have the right people sitting at the table with the right expertise. He attended a retreat of NHRMC when the strategic plan was being drafted. During that retreat, the goal was for participants to understand the need to have the right people at the table. When he was first elected, he was given information from the Governance Institute on how to select BOT members and the goal was to take politics out of the equation and put in place the right people with the right tools and skill sets that could guide NHRMC. He has seen a combination of both, with good people being appointed for the right reasons and for political reasons. His goal is to have the right people in the right seat for the right reason, regardless of political party, but making sure they could advance the efforts of the organization. He wishes this model was in place for all appointed boards. With some hospital models, people are flown in from across the country because there is a want for the best diversity of thought possible to guide an organization and sometimes that may not be in the local community. For him, local control means people that voted for a bond in the 1960s can still have a voice in what happens in 2020. His concern is making sure the public’s voice is never lost in the process. He is thankful for the efforts and to have worked on the NHRMC BOT in the past, and has confidence in Mr. Gizdic and his team. Mr. Gizdic thanked Commissioner Barfield for his comments and stated that he agrees it is very important to have a strong NHRMC BOT. Over half of the patients come from outside New Hanover County and as such, it is a regional health system. To think about only appointing board members from inside New Hanover County seems outdated. NHRMC will see approximately $1.4 billion in business this year, which is essentially in the business world seen as a Fortune 1,000 company. He thinks everyone would like to keep the decision making local, whether it is people from just New Hanover County or other parts of the region. He is excited as the process continues because these are the opportunities and discussions that can be held. He believes many proposals will be seen that will allow for this as well as exploring other options to remain independent. This same process and state statutes would have to be followed in order to look at any of the proposals, including restructuring NHRMC. Commissioner Zapple stated he agrees this is one of the most important issues that will be dealt with by the Commissioners and in the community in a generation, and appreciates the conversations. To address earlier statements, citizens have asked him why the discussions between the NHRMC BOT and the Commissioners were not done in a public setting and why a request for information (RFI) was not issued prior to the resolution of intent to sell. He thought the information from the series of meetings held in June 2018 to preliminarily discuss what would happen with the hospital would eventually become public. When the announcement was made on July 23rd, he was surprised the information from those meetings was not released. Chair Olson-Boseman stated the Commissioners were informed those meetings were confidential because of healthcare. A lack of trust of the people has developed due to what is being said not being true. Commissioner Zapple expressed his disagreement and stated the information from those meetings is relevant to the conversation. He does not know anyone who is saying it is a done deal, it is not a theory he has been a part of, and has asked people to look at what is being done and that nothing can be done until it is voted on by the Board of Commissioners. As to local control, he understands from discussions with various hospital administration members there are other models, especially for profit, that have multiple hospitals in their portfolio and when the merger or sale happens, there is no place for a local person to be on their governance board. This is an issue that has been on his mind and he also would not support it. It is important for the community to continue to have a place at the governing board of whatever partnership takes place to have absolute local control. Regarding the political nature of it, he could not agree more that the appointment process is antiquated and is fully supportive of reaching out to take advantage of the expertise in the region and across the nation. Further discussion was held about the meetings that took place from June 2018 to July 23, 2019. In response to Commissioner White’s questions, Commissioner Zapple stated he recalled the discussions concerned various healthcare systems that were asked for opinions and interest in this healthcare system, which were not named at the time of the July 23rd announcement. The question posed during the public forums that caught him by surprise was whether conversations were held prior to the public forums and the request for resolution of intent to sell. The question was not addressed directly by the spokespeople at that time. There had been conversations held with those healthcare systems and he believes that is where the disconnect happened. At the time there was not an RFP, they were conceptual, and he did not see a problem bringing those out during that time. He further stated that NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 462 immediately after the public forums he suggested to County Manager Coudriet and NHRMC President and CEO Gizdic that the information be brought forward at a top level to let people know the discussions had been occurring, and that did not happen. Chair Olson-Boseman recognized County Manager Coudriet for comments. County Manager Coudriet stated he was one of the spokespersons and wants to emphasize that at no point did anyone with New Hanover County and NHRMC have any discussions with any of the entities, some of which are now part of the solicitation, during the due diligence. To suggest that Mr. Gizdic or his team, Commissioners, or County staff were in direct discussions is not a fair representation of how it was managed. The entities were contacted and worked through a third party intermediary with the expectation of confidentiality. Those entities have patients, stakeholders, and administrations who may or may not be aware of what the strategic priorities are and would not want that out in the public. What the interests of other partners might be and what their high level value proposition is was part of the due diligence. From a staff perspective, staff tried to emphasize due diligence was done. There was never direct communication, negotiation, or discussion about any proposal with any particular proposer. It was handled by Navigant, who is the third party and long standing strategic partner with NHRMC. Vice-Chair Kusek thanked the PAG members for their time commitment and the work being done. It is absolutely not true what has been said by some in the community that there were secret meetings, that this is a done deal, etc. Everyone is being asked to keep an open mind as the intent has always been to explore what is best for healthcare in this community now and going forward, which is the truth. It is not an easy job and was not an easy decision to go forward, and the work of the PAG is also not going to be easy. Commissioner Zapple stated he never said it was a done deal and wanted to explain to the public that there were discussions about this that had been ongoing with the individual Commissioners. He was not trying to subvert anything, rather he was trying to inform the public of what was going on from all points of view. This is a difficult and complex issue. BREAK: Chair Olson-Boseman called for a break from 10:41 a.m. until 10:54 a.m. PRESENTATION AND APPROVAL OF THE AUDIT REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 Chief Financial Officer Lisa Wurtzbacher stated the County ended the year with a fund balance of 17%. The goal is 18-21% and it was thought during the beginning of the Hurricane Florence recovery effort that fund balance would be at 12 or 13%, so 17% is a good way to end the year. Staff will be working on this throughout the 2021 budget process. The County has two years to be in compliance with having an 18-21% fund balance, which means it needs to be back at 18% by June 30, 2021. The County has also been rated triple A twice since Hurricane Florence, which is an indication of still being in strong financial health. April Adams, Partner with Cherry Bekaert, LLP, presented the following information of the New Hanover County Comprehensive Annual Financial Report for the fiscal year ended June 30, 2019:  Role of the External Auditor:  Actions: Standards require the external auditor to plan and perform procedures to obtain reasonable assurance that the financial statements are free from material misstatement and in compliance  Results: express opinions on financial statements; unmodified  Required communications: significant changes; estimates; journal entries  Results of the Audit:  Opinions:  Unmodified Opinion:  Financial Statements  Internal control over financial reporting  Federal and state single audit  Internal Controls: no material weaknesses  Required communications: no significant accounting policy changes; estimates; no journal entries  Single audit major programs:Social Services Block Grant; Disaster Grants Public Assistance; Low- Income Home Energy Assistance Program; Special Supplemental Nutrition Program for Women, Infant, and Children; Medicaid; Public School Building Capital Funds  Single audit findings:  Two Single Audit Findings:  DSS Crosscutting (1)  Medicaid Eligibility (1)  Medicaid finding resulted in questioned costs of $196.09  Internal controls:  Identify significant transaction cycles: obtain understanding; walkthrough key controls  Testing of internal controls: for reliance; for compliance  Journal entries: obtain “data dump”; review unusual transactions  Information technology controls: IT questionnaire; general computer controls  Significant audit areas: receivables and revenue; payroll; debt, landfill, OPEB, and pension obligations  Tested substantively: confirmation; analytics; test of details  Financial Results: General Fund – Budget to Actual:  Revenue beat budget by $6,925,144 NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 463  Expenditures under budget by $13,391,572  In FY2019, the County appropriated the use of $32.7 million of fund balance in its final budget. However, the County only used $9.2 million of total fund balance  County Policy is to maintain an unassigned fund balance in the General Fund of an amount between 18% and 21% of expenditures and other financing uses  Unassigned Fund Balance as a percentage of General Fund Expenditures as of June 30:  2019: 17.0% - the County has two years to restore unassigned fund balance to the minimum requirement  2018: 21.0%  Financial Results: Environmental Management Fund – Budget to Actual:  Revenues beat budget by $2,999,363  Expenditures under budget by $4,596,504  In FY2019, the County appropriated the use of $10.4 million of fund balance in its final budget. However, the County only used $5.3 million of total fund balance.  Financial Results: Capital Assets (thousands): Comparison Capital Assets 2019 2018 Land $48,383 $47,522 Buildings $180,657 $169,384 Other Improvements $63,033 $53,427 Equipment and Vehicles $87,062 $82,033 Construction in progress $22,414 $15,028 TOTAL (Actual) $401,549 $367,394  Financial Results: Long Term Debt (thousands) Comparison Long Term Debt 2019 2018 Installment and GO Bonds (including $446,180 $414,056 premiums and discounts) Compensated Absences $10,382 $8,629 Pensions and OPEB $393,480 $353,938 Landfill Closure Costs $18,758 $13,901 TOTAL (Actual) $868,800 $790,524 In summary, Ms. Adams stated that the County was issued clean opinions, there were no adjusted journal entries as a result of the audit, there are good internal controls, no significant deficiencies or material weaknesses were identified, and there was full cooperation with management. Hearing no further comments, Chair Olson-Boseman thanked Ms. Adams for the report and requested direction from the Board. Motion: Vice-Chair Kusek MOVED, SECONDED by Chair Olson-Boseman, to approve the New Hanover County Comprehensive Annual Financial Report for the fiscal year ended June 30, 2019. Upon vote, the MOTION CARRIED UNANIMOUSLY. WILMINGTON QUICK RESPONSE TEAM UPDATE REPORT Tony McEwen, with the City of Wilmington, thanked the Commissioners for the opportunity to provide an update of the Wilmington Quick Response Team (QRT). He recognized Wilmington Fire Department Captain Chuck Bauer and former Deputy Chief Mitch Cunningham who is now an instructor at Cape Fear Community College. In 2015-2016 following tragic events in the community, in particular the death of Mason Richardson, Mayor Saffo and several others brought together community leaders, medical experts, public safety experts, the District Attorney, and the Sheriff to look at solutions to better improve the health and safety of the community. The Wilmington QRT sought resources from the state and federal levels, and had support of Representatives Ted Davis, Holly Grange, Deb Butler, and former Senator Michael Lee for a state appropriation in the last budget for $500,000 over two years for an opioid overdose QRT in Wilmington. It was also decided the program should expand beyond the city limits and include the County. Regarding QRT funding, Captain Bauer stated he assisted with organizing an oversight committee and developing an RFP. The third party provider is Coastal Horizons as they have the best foundation for this type of work. Meetings are held on a bimonthly basis. He is remiss in not necessarily having someone from the County in attendance and has been in contact with the Sheriff’s department to be involved going forward in order for the success of the program to reach the entire county. Sustainable long-term funding may fall to the city and not the state. Funds are not currently being requested, but a possible city and county partnership is being looked at. Mr. McEwen introduced Kenny House, Coastal Horizons, and Buffy Taylor, Wilmington QRT, to provide the following update:  What QRT does: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 464  The Quick Response Team of Coastal Horizons is made up of three Peer Support Staff and two Licensed Therapists  The Quick Response Team works to assist those who have overdosed, who are at risk of overdose, or who have been affected by their loved one’s drug use by removing barriers and hopefully getting them to engage in treatment  The goal is to intervene, educate, and ultimately, save lives. We go out into the community to connect with survivors and their families one to five days after an overdose. Hopefully, increasing motivation and willingness to participate in treatment.  Community Partners:  Wilmington Police Department (LEAD – Law Enforcement Assisted Diversion); Wilmington Fire Department; Community Paramedics of NHRMC; NHRMC COST Program; NC Harm Reduction; MedNorth Health Center; TIDES; Cape Fear Clinic; The Good Shepherd; RESET of Coastal Horizons  How and Where QRT Connects to Treatment:  When an overdose survivor is ready for treatment, the Quick Response Team assesses and connects that person to the type of treatment that can be most helpful to them.  We have connected people to treatment providers such as Coastal Horizons, PORT Health Services, Walter B. Jones ADATC, Black Mountain ADATC, RHA, A Helping Hand, Dove’s Nest, and Recovery Ventures, The VA, Healing Transitions, The Harbor, and TROSA.  QRT Is Making a Difference:  The QRT was formed in July of 2018 – in the first fiscal year 2018-19, the QRT made contact with 148 overdose survivors and connected 82% of them (122) to treatment.  Going into the second FY 2019-20, the QRT has made contact with an additional 66 overdose survivors and connected 87% of them (58) to treatment.  We typically see anywhere from 12-17 people entering treatment each month.  We mostly see individuals in the 25-44 age range, and more females on average than males.  202 families over the past 18 months have been provided services In response to Board questions regarding the possible loss of The Harbor, Mr. House stated official notification about this has not yet been received. Resources for detoxification beds and other forms of inpatient treatment have been used there, as well as other short-term needs. Whether it can be maintained or continued, Mr. House stated that would be a question for Trillium, the MCO and their contacts with the state as well as their partnership with RHA who manages that. Mr. McEwen stated additional resources were able to be used during the holidays as the community is at higher risk during that time. The message has been shared that there are resources for those at risk. The program will come to a close at the end of June 2020 since that is when the state funding will end. An additional $250,000 was able to be secured in the most recent budget with the help of Representative Davis taking leadership on this issue. As the budget is still in the process, it is unknown if and when the funds will be received. Commissioner White thanked the Wilmington QRT for the update. He stated that one thing he has learned from experience, his clients, and family is that recovery is for those who want it, not those who need it. Many people need it, but until the moment comes where they want it, it does not matter. It is incredible what the QRT has done. Some in the community may look at efforts like this and not understand what this is about. There is no higher purpose that he sees in government than this type of resource to provide help. He thanked everyone for the work and welcomes a future conversation about it. Mr. Cunningham stated the data is showing the program’s impact of this program and there are successful signs that things are improving. It is working and lives are being saved. Chair Olson-Boseman thanked the Wilmington QRT for the update. CONSIDERATION AND APPROVAL OF CONCURRENT RESOLUTION WITH THE WILMINGTON CITY COUNCIL FOR ENHANCED PUBLIC TRANSPORTATION County Manager Coudriet stated the proposed resolution is consistent with the general action announced at the January 7, 2020 press conference held by the County and the City. It also follows some of the broad policy goals identified by Chair Olson-Boseman and Mayor Saffo. On December 2, 2019, the Board directed staff to work with elected officials from the County and City to begin a process to reboot WAVE Transportation. In partnership with the City of Wilmington, County staff is recommending approval of the resolution directing County and City staff to move forward with developing a modified system of public transportation that is keeping with the following policy aims: 1.A transportation system that is focused on convenience and demand versus general coverage and embraces innovation such as rideshare; 2.A transportation system than can fully meet the paratransit obligations countywide; 3.A transportation system that requires other units of government to equitably share in cost for services to those communities; 4.A transportation system governance body that is in keeping with city and county priorities; 5.A transportation system that is scaled to known and available revenues; and 6.A transportation system that is operationally ready by July 1, 2021. The City Council is scheduled to consider the identical resolution at its Tuesday, January 21, 2020 meeting. The resolution calls for the County and City to appoint a task force of staff to work in detail to bring a revision of an NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 465 interlocal agreement for consideration later in 2020. The Transpro report will be the guide for this, which was first presented in 2018. In response to Board questions about the need for a sustainable revenue stream, County Manager Coudriet stated paragraph six of the resolution is intended to speak to that. Hearing no further comments, Chair Olson-Boseman requested direction from the Board. Motion: Commissioner Barfield MOVED, SECONDED by Commissioner White, to adopt the concurrent resolution of the Wilmington City Council and the Board of Commissioners of New Hanover County for enhanced public transportation. Upon vote, the MOTION CARRIED UNANIMOUSLY. A copy of the resolution is hereby incorporated as part of the minutes and is contained in Exhibit Book XLII, 2.3. SELECTION OF DEVELOPER TEAM AND APPROVAL OF MEMORANDUM OF UNDERSTANDING FOR GOVERNMENT CENTER REDEVELOPMENT PROJECT Property Management Director Sara Warmuth provided an overview of the Government Center redevelopment project and stated that the Board is being asked to consider selection of a development team and approve a memorandum of understanding (MOU) for the project. New Hanover County issued a Request for Qualifications (RFQ) on August 30, 2019 for the redevelopment of the Government Center located at 230 Government Center Drive, Wilmington, North Carolina to include a facility for county offices and private development suitable for the site that will generate additional tax revenue for the county while maintaining critical functions of county government. Two firms submitted Statements of Qualifications in response to the RFQ. The firms, Vermilion Campbell of Chicago, Illinois and GHK Cape Fear/FD Stonewater of Wilmington, North Carolina were evaluated. Both firms sufficiently demonstrated their development team’s qualifications, extensive experience in this type of development, financial capacity to take on the project, and availability to meet the County’s timeline. Both teams were invited for interviews and to make presentations before the County’s evaluation team, which was made up of senior staff from various departments. Both firms further proved their capability to provide quality services for the redevelopment project. The evaluation team reached a unanimous consensus that, although both firms could perform the requested services, GHK Cape Fear/FD Stonewater proved to better understand the needs of the County. They are also more familiar with the local commercial market needed to support the project due to their local presence in the community. Therefore, the evaluation team recommends GHK Cape Fear/FD Stonewater as the preferred developer to enter into a non-binding memorandum of understanding (MOU) regarding the programming needs of this project, with the understanding that if terms cannot be negotiated through this process, the County will terminate negotiations and move to the second firm, Vermilion Campbell, and begin negotiations. During the programming phase, the County will collaborate with the development team to complete a program assessment, formulate a development and management structure including the proposed funding structure of the project, and begin preliminary design work for the project. It is expected that contract negotiations would take place following a final program assessment and plan.  The Government Center Redevelopment Project:  Consider approval of Memorandum of Understanding (MOU)  The Government Center: Parcel A = 6.06 acres, 45,181 sq. ft. facility; Parcel B = 4.39 acres, 31,736 sq. ft. facility; Parcel C = 4.56 acres, 59,737 sq. ft. facility:  Total = 15.01 acres, 136,654 sq. ft. under roof  Site Conditions:  Located in Federal Opportunity Zone  Permitted Uses by Agreement  Parking Easements  Completed Steps:  August 12, 2019 - Resolution of Critical Need adopted  August 30, 2019 - RFQ advertised  October 22, 2019 - Submittals due  November/December 2019 – Evaluation of Proposals  RFQ Process:  Two firms submitted statements of qualifications:  Vermilion Campbell  GHK Cape Fear/FD Stonewater  Both qualified, experienced, and capable to perform the requested services  Both firms were invited for interviews and presentations  Evaluation team recommends GHK Cape Fear/FD Stonewater  Requested Action:  Board authorization to enter into Memorandum of Understanding (MOU) with GHK Cape Fear/FD Stonewater:  Complete predevelopment activities  Developer has exclusive negotiation rights NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 466  Term: January 22, 2020 – June 1, 2020  Next Steps:  MOU Tasks  June/July – Update to Board  TBD – Public Hearing  TBD – Board approval of Developer Agreement In response to Board questions, Ms. Warmuth stated the Government Center project would replicate what was done for Social Services. The goal is to keep services at the site through construction and move into the new facility before anything is done with the existing site. It is believed the site is large enough to accomplish the goals. In response to Board questions about the parcel Ten Pin Bowling Alley is located on, Ms. Warmuth stated there are two parcels not included in the project as they are separate and individually owned. The developer team has already had several meetings with Ten Pin Alley and details will be worked through as the development continues. Regarding if there is an option to purchase the Ten Pin Alley parcel, Ms. Warmuth stated it is still early in the process, but it seems possible a solution could be worked out that could benefit them and the County. Regarding the location of the new Emergency Operations Center, it would still be on the same site. Hearing no further comments, Chair Olson-Boseman requested direction from the Board. Motion: Chair Olson-Boseman MOVED, SECONDED by Vice-Chair Kusek, to approve the recommendation of GHK Cape Fear/FD Stonewater, LLC as the developer for the Government Redevelopment Project and approve staff to execute the Memorandum of Understanding. Upon vote, the MOTION CARRIED UNANIMOUSLY. REPORT ON NEW HANOVER COUNTY LEADERS VISIT TO APPLE, INC. Commissioner White presented an update regarding the visit to Apple, Inc. and stated it was a remarkable experience. Some of the questions that led to the meeting were how does the world’s largest technology company view the future of education, what are the technical challenges facing children in our local schools, and how do we better connect jobs and education in the workforce. The meeting opened with a 32-year veteran of Apple who discussed collaboration in the field extensively, followed by another presenter of Apple’s executive team who was formerly a middle school teacher and administrator. Other presenters included a seven-year veteran of the education development department, the assistant director of advanced technology, an executive of the education development team overseeing the ConnectED initiative in Birmingham Alabama, and the director of the higher education department for universities and community colleges for 11 states on the east coast. The last presenter happened to be a resident of Wilmington. Several comments made at the meeting stood out. Chancellor Sartarelli th stated UNCW ranks 8 place in US News and World Report for its leadership and advances in education. President Morton commented on the challenges facing community colleges as they use curriculum software at a time when the education consumer is aware of what is referred to as “digital downgrades.” Other comments made were about the need for better education with workforce needs and job creation, deficiencies in what students learn in the real world, and bridging the gap with technology in the classroom. The topics during the meetings centered around common themes related to informational literacy. Most literacy challenges faced are informational, access to technology, how to use it to improve the quality of life, and many are deprived of the opportunity of learning. Apple products are unique in the technology world because it begins with the end user in mind. Steve Jobs’ vision was to create and build products with the end user first. This example was used to discuss how does a government remove friction from the processes. It can be applied to the education process as well. There were presentations on augmented reality machine learning and how it is being implemented, which is more relevant to the community college. Another presentation was about the education forum in Birmingham, Alabama. The presenter said education will not evolve organically, it must be cultivated. The idea of high school was initiated about 120 years ago and the question is whether that is still the model it needs to be and how does that impact decisions that are made on the local level. The next steps will be to continue the conversation of how to improve the access and quality of technology in the lives of people that are seeking to learn. PUBLIC COMMENT ON NON-AGENDA ITEMS Chair Olson-Boseman reported that no one signed up to speak on non-agenda items. ADDITIONAL AGENDA ITEMS OF BUSINESS County Manager Coudriet stated in regards to the point earlier about the need for The Harbor in the community, based on a quick research during the meeting, it appears there has been a lease extension with RHA, the operator of The Harbor. The lease is currently from NHRMC and it is possible, but he is not positive, it is for 18 months. Commissioner Zapple stated the process with NHRMC is complicated as discussed earlier, and it deserves a healthy skepticism. He stated he does not tell lies nor spreads false rumors and will continue to ask the hard questions that are brought to him by the community. Commissioner Barfield stated it was a great week celebrating the life and legacy of Dr. Martin Luther King, Jr., ending with a parade yesterday. He thanked Deborah Dicks Maxwell and Hollis Briggs and those in the community that worked hard to put together the celebration. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 REGULAR MEETING, JANUARY 21, 2020 PAGE 467 ADJOURNMENT There being no further business, Chair Olson-Boseman adjourned the meeting at 11:55 a.m. Respectfully submitted, Kymberleigh G. Crowell Clerk to the Board Please note that the above minutes are not a verbatim record of the New Hanover County Board of Commissioners meeting. The entire proceedings are available for review and checkout at all New Hanover County Libraries and online at www.nhcgov.com.