2003-05-29 Budget Work Session
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 29
BUDGET WORK SESSION, MAY 29, 2003PAGE 620
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, May 29, 2003,
at 5:00 p.m. in Room 501 of the County Administration Building, 320 Chestnut Street, Wilmington, North Carolina.
Members present were: Chairman Ted Davis, Jr.;Vice-Chairman Robert G. Greer; Commissioner Julia
Boseman; Commissioner William A. Caster; Commissioner Nancy H. Pritchett; County Manager, Allen O’Neal; and
Clerk to the Board, Lucie F. Harrell.
County Attorney Copley was absent.
Chairman Davis called the meeting to order and requested County Manager O’Neal to begin the presentation.
DISCUSSION OF FY 2003-2004 BUDGET FOR THE NEW HANOVER COUNTY FIRE SERVICE DISTRICT
County Manager O’Neal introduced Mr. James M. Coughlin, Chairman of the Board of Fire Commissioners
and Chief Donnie Hall, New Hanover County Fire Services Administrator. He advised that the proposed FY 2003-
2004 Fire District Budget included a tax increase of two cents raising the current tax from five cents to seven cents.
He requested Chief Hall to explain the reason for increasing the tax rate and comment on the need to improve the ISO
rating in all Fire Stations to reduce insurance premiums for the homeowners living in the unincorporated county.
Chief Hall spoke on the importance of reducing fire ratings and reported that residents living in the Myrtle
Grove and Castle Hayne Fire Districts will save a significant amount of money when paying their homeowners
insurance premiums since the State has reduced the fire ratings from a Class 9 to Class 5. He advised that fire hydrants
are important when the State inspects a fire district, but hydrants are not required for a district to receive a good rating.
For example, when the Myrtle Grove Fire Station received a reduction in its rating from a Class 9 to Class 5, the Fire
Station used a rating response method based on fire hydrants since there are more hydrants in this densely populated
district. When the Castle Hayne Fire Department received its rating reduction from a Class 9 to Class 5, the rating
response method used was water tankers because this district is less populated. Residents living in the Castle Hayne
Fire District should save approximately $1 million per year in homeowner insurance premiums. Residents living in
the Myrtle Grove Fire District will save significantly more than Castle Hayne because of density, commercial
development and hydrant distribution. Each property owner will save approximately $200 to $250 per year based on
each $100,000 of property insured.
Chief Hall presented the following items that could be accomplished if the tax rate is increased by two cents:
Equipment Replacement-VHF Pagers
•The last major purchase was 15 years ago
•Many existing pagers are obsolete
•Parts are not available for repair
•Phase in replacement program over the next 3-5 years
•Yearly cost approximately $22,000
Equipment Replacement-Automatic External Defribillator (AED) Enhancements
•Original purchase over four years ago
•Cardiac Survivability Rate - 26.1%
•Multiple calls and system demands
•Nine units required at $31,500
Career Staffing-Federal Point & Wrightsboro
•Meet timetables for Insurance Rating Inspections
•Reduce response times/Improve customer service
•Provide consistency at each Station
•Cost of $673,000
Hydrant Support Countywide
•Initiate program to fund hydrant installations
•Immediate insurance savings to property owners
•No funding source exists for installation of fire hydrants
•Request $20,000 each year
Vehicle Replacement Program
•Formulated schedule for Countywide vehicle replacement/retirement
•Yearly contributions of up to $350,000
•Reduce annual debt service to help maintain the tax rate
•2-3 years to get fully funded
Future Goals
•Continue with consolidated Countywide purchasing
•Future use of manpower and equipment from Winter Park and Seagate Fire Stations
•Reduce annual debt service to help maintain the tax rate
•Unification of the County Fire District
In closing, Chief Hall requested the Board to approve the tax increase of two cents to allow the New Hanover
Fire Service to have the necessary career personnel and equipment to upgrade the fire ratings for all districts to provide
equal fire protection to the citizens living in the unincorporated county.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 29
BUDGET WORK SESSION, MAY 29, 2003PAGE 621
Mr. Monty Coughlin reported that for three years in a row, there was no money to replace aging equipment.
Since the fire fleet dates back to the 1980s, the equipment needs to be replaced. If funding for a vehicle replacement
program is established, it will allow the Fire District to set aside money and build a cash reserve to purchase the
equipment without incurring debt. He requested the Board of County Commissioners to approve the tax increase of two
cents to meet the needs of the Fire Service, particularly the replacement of self-contained breathing apparatus to avoid
failures when firefighters are responding to fires.
Chief Hall stated that the presentation was completed and he offered to answer questions.
Commissioner Caster requested a figure on the cost of additional career personnel for the Federal Point and
Wrightsboro Fire Departments.
Chief Hall responded that $673,000 would allow the necessary career personnel to be placed in both fire
departments. He noted that when he attended a meeting at the Federal Point Fire Station to demonstrate the new facility
and services, Presidents of area Homeowners Associations wanted to know when Federal Point Fire Station would receive
a paid 24-hour staff. There was a great deal of concern about people in the unincorporated county paying the same
amount of fire tax without receiving equal services in all districts.
Further discussion was held on the amount of revenue generated by a one cent tax increase. Budget Director
Griffin informed the Board that $625,730 of revenue would be generated.
Chairman Davis reported that the fire tax was increased one cent in 1999-2000, one-half cent in 2000-2001,
and one cent in 2001-2002. No increase was approved in 2002-2003, and the Fire Service is now requesting an increase
of two cents raising the current tax rate from five cents to seven cents. He suggested increasing the fire tax by only one
cent.
Commissioner Pritchett objected and stated that postponing equipment needs, particularly the breathing
equipment, is not only dangerous to the firefighters but will delay long overdue needs. The additional revenue is needed
to place career personnel in all fire stations and provide the firefighters with the necessary equipment to respond more
quickly. She urged the Commissioners to favorably consider the tax increase of two cents as recommended and requested
by the Board of Fire Commissioners.
After further discussion, Commissioner Caster asked what the dollar figure was for the self- contained breathing
equipment.
Fire Administrator Hall responded that $300,000 was needed to purchase the breathing apparatus.
After a lengthy discussion on the need to establish a reserve to purchase equipment (particularly the self-
contained breathing apparatus) and place career personnel in all fire stations, Chairman Davis requested direction from
the Board.
Commissioner Caster advised that he was concerned about the City of Wilmington continuing to annex and not
knowing the outcome of the issues involved with the Winter Park Fire and Seagate Fire Stations. He stated that it would
be difficult for him to support a tax rate of two cents at this time.
Commissioner Pritchett again reiterated the importance of providing sufficient funding to provide equal fire
protection to all citizens living in the unincorporated county.
After hearing no further comments, Chairman Davis expressed appreciation to Chief Hall and Mr. Coughlin
for the budget presentation.
DISCUSSION OF FY 2003-2004 BUDGET FOR NEW HANOVER COUNTY
Chairman Davis requested County Manager O’Neal and Budget Director Cam Griffin to present the proposed
County budget for FY 2003-2004.
County Manager O’Neal reported that Staff has been directed to use the same procedures and same amount of
funding for non-county agencies as recommended in the FY 2002-2003 budget. He presented the recommended funding
for these agencies and the following discussion was held on providing additional funding to the following agencies:
Cape Fear Council of Governments: Commissioner Caster suggested providing additional funding to the Council of
Governments since the County pays annual dues to the N. C. Association of County Commissioners, National
Association of Counties, and Institute of Government based upon a per capita formula. He commented on the progress
being made by the Council of Governments in addressing issues on a regional basis and suggested increasing the
recommended funding by $10,457 for total funding in the amount of $32,300, which is New Hanover County’s per capita
share.
New Hanover Soil and Water Conservation District: Commissioner Caster advised that this agency is involved with the
purchase of land for conservation purposes and works with the Tidal Creeks Advisory Board, Airlie Gardens, and the
Cape Fear River Watch to educate the public about the need to protect our natural resources. The Soil and Water District
also works with the County and other agencies on stormwater projects. He requested the Board to consider funding this
agency $10,000 since no funding was recommended in the FY 2003-2004 budget.
Carousel Center: Commissioner Pritchett spoke on the many services provided by the Carousel Center and stated that
findings from medical examinations of abused children are now being used as evidence by the Court System. She
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 29
BUDGET WORK SESSION, MAY 29, 2003PAGE 622
suggested increasing the recommended funding to this agency by $10,000.
Port, Waterway and Beach Commission: Commissioner Caster commented on the responsibilities of the Commission
and stated that lobbying for beach renourishment projects was essential to New Hanover County. He advised that when
members of the Port, Waterway and Beach Commission visit the Congressional delegation in Washington, D. C., to
lobby for funding, money is needed to
pay for their expenses. He requested the Board to consider funding this agency $3,000 since no funding was
recommended in the FY 2003-2004 budget.
Elderhaus, Inc.: Discussion was held on additional funding for Elderhaus, Inc. Commissioner Pritchett advised that
when the Board decided to provide additional funding to this agency during the year, the Director was informed that this
was a one-time funding appropriation; therefore, she could not support additional funding for Elderhaus, Inc.
Opening Libraries on Friday: Commissioner Pritchett requested the Board to consider additional funding in the amount
of $60,000 to open all libraries on Friday.
Funding for New Hanover County Schools: Chairman Davis requested the Board to consider funding the New Hanover
County Schools an additional $1,000,000. He advised that the Schools submitted a budget request of $70,255,510, and
County Manager has recommended funding in the amount of $67,682,652 representing a difference of $2,572,858.
These figures include a transfer of $1,000,000 from Fund 125 (the Schools Fund Fund Balance). He requested Budget
Director Griffin to explain how the money was accumulated in Fund 125.
Budget Director Griffin explained that Fund 125 has accumulated over the years from the interest earned on
monies used to pay the bond debt service for the Schools.
In further discussion, Chairman Davis explained that included in the recommended budget is $1,000,000
appropriated from the General Fund Balance that has not been designated for any specific purpose. He requested the
Board to consider using this $1,00,000 to reduce the funding difference of the Schools from $2,572,858 to $1,572,858.
A lengthy discussion was held on use of the County’s fund balance in the recommended FY 2003-2004 budget.
Finance Director Shell advised that removing the $1,000,000 from the fund balance would not jeopardize the financial
condition of the County.
Funding for Airlie Gardens: Chairman Davis commented on recommended funding of $200,000 for Airlie Gardens and
asked if the Board was in favor of this appropriation. He advised that he would like to inform the Airlie Gardens
Foundation Board if the recommended funding is not going to be approved. He also reminded the Board that last year
the funding appropriation was reduced and stated that he felt this amount should be approved for FY 2003-2004.
Commissioner Boseman informed Chairman Davis that she could not support a funding appropriation of
$200,000 to Airlie Gardens.
Salary Increase for County Employees: County Manager O’Neal presented a list of salary increases and bonuses given
to employees during the past three years by the City of Wilmington, Town of Wrightsville Beach, Town of Carolina
Beach, Town of Kure Beach, Pender County, Columbus County, Brunswick County, Cape Fear Community College and
Council of Governments. He stated that New Hanover County employees have not received a salary increase for the past
two years, and he urged the Board to approve the proposed market adjustment of 3% and merit increase of 2% to County
employees based upon performance.
Other Budget Items:
Medicaid Reimbursement: Discussion was held on the amount of money to be received by New Hanover County for
Medicaid reimbursement. Budget Director Griffin reported that the Department of Social Services was in the process
of trying to calculate the exact amount and stated that once the information is received, the Board will be informed.
Discussion of Cabarrus County et al v. Secretary of Revenue Regarding State Reimbursements to Counties: Discussion
was held on the status of the lawsuit filed against the State for reimbursement of inventory and intangibles taxes to
counties. County Attorney Copley advised that she would contact the law firm of Boyce & Isley, PLLC and request
Attorney Dan Boyce to submit a status report.
Chairman Davis asked if any member had any other comments.
Hearing no comments, Chairman Davis expressed appreciation to Staff for the work given to prepare the
recommended budget during a difficult economic period, and he requested the Board to schedule another Budget Work
Session to provide final direction to Staff.
After discussion, the Board decided to hold another Budget Work Session on Thursday, June 12, 2003, at 5:00
p.m. in Room 501 of the County Administration Building. The County Manager and Budget Director were requested
to prepare information regarding the additional funding so further discussion and review of budget requests could be
held.
County Manager O’Neal advised that he would be glad to submit a budget with the additional funding discussed.
He expressed appreciation to the Board for taking time to discuss the recommended budget.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 29
BUDGET WORK SESSION, MAY 29, 2003PAGE 623
ADJOURNMENT
Chairman Davis adjourned the meeting at 7:00 p.m.
Respectfully submitted,
Lucie F. Harrell
Clerk to the Board