2002-06-13 Budget Work Session
NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 29
BUDGET WORK SESSION, JUNE 13, 2002 PAGE 235
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, June 13, 2002,
at 5:00 p.m. in Room 501 of the New Hanover 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; County
Attorney, Wanda M. Copley; and Clerk to the Board, Lucie F. Harrell.
Chairman Davis called the meeting to order and stated that the purpose of the meeting is to discuss the
recommended FY 2002-2003 Budget.
County Manager O’Neal referenced the information packet presented to the Board and advised that the major
concern was not knowing if the State will withhold $4.5 million in local reimbursements for intangible and inventory
taxes. The other concern is the lack of funding for non-county agencies that have been funded in the past. If State
reimbursements are not received, the Schools Fund Balance can be used to replace this shortfall. Use of this fund will
not reduce the amount of funding from New Hanover County to the schools. The Board can also consider a combination
of using the Schools Fund Balance and other revenue to replace State reimbursements or consider increasing the property
tax rate.
Further discussion was held on the composition of the Schools Fund Balance. Budget Director Griffin explained
that money budgeted for school capital projects that was not spent has been set aside in an account for a number of years.
The current balance of this fund is approximately $5.9 million. This account is considered a savings account reserved
for the schools. She stressed the importance of the County Commissioners and public understanding that using this fund
will not reduce the amount of money appropriated to the schools in the recommended FY 2002-2003 Budget.
Commissioner Boseman asked if any money from this fund had ever been disbursed to the schools.
County Manager O’Neal responded that two years ago, $700,000 to $1,000,000 was used to purchase computers
for the schools during the middle of the year and to bring schools into compliance with the Fire Safety Code.
Discussion followed on implementing a ½ cent sales tax and the amount of revenue that would be generated
within a year. Budget Director Griffin reported that if the Board decides to implement a point-of-origin ½ cent local
sales tax, the estimated revenue generated would be $8 million. If the County implements a ½ cent sales tax as proposed
by the State, it would be a point-of-origin tax based on population. The estimated revenue received by the County will
be $5.8 million with the other half shared with the municipalities.
A lengthy discussion followed on the issue of no funding recommended for non-county agencies. County
Manager O’Neal advised that the proposed FY 2002-2003 budget has been prepared in an unusually conservative
manner; however, only $1 million has been budgeted for Medicaid which will probably not be sufficient for the next
fiscal year. With the budget shortfall and the possibility of not receiving $4.5 million in State reimbursements or State
matches for entitlement programs, there is no revenue left to provide funding to non-county agencies. This has been an
agonizing budget process for Staff. With elimination of 100 or more positions and money cut from every single
department in County government, the only course left is to consider exercising the following options, increasing the
property tax rate or implementing a local option ½ cent sales tax effective July 1, 2003:
1.Eliminate County participation and funding for the Cooperative Extension
2.Eliminate televising Board meetings
3.Eliminate proposed increases to Cape Fear Community College and the Southeastern Center
4.Reduce the contingency from $350,000 to $300,000
5.Eliminate contributions to DARE and other programs
6.Eliminate funding to the Airlie Foundation
7.Cut the following non-mandated departments: Airlie Gardens
Aging except for Nutrition and Administration
Parks
Library
Human Relations
Museum
Veterans Services
If these actions are taken, a total of $7,129,599 would be saved and there would be sufficient revenue to cover
the $4.5 million that probably will be withheld by the State.
Further discussion was held on the need to preserve the fund balance to protect the County’s bond ratings.
County Manager O’Neal advised that no money from the fund balance has been used in preparing the FY 2002-2003
budget. He stressed the importance of keeping a strong fund balance to maintain the current bond ratings and stated that
a decrease will result in higher interest rates when the County borrows money.
Chairman Davis stated that he could not vote to increase the property tax and noted that complaints are received
daily from elderly citizens who are afraid of losing their homes if the property tax and values of their homes continue
to increase.
Commissioner Caster agreed with Chairman Davis.
NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 29
BUDGET WORK SESSION, JUNE 13, 2002 PAGE 236
After a lengthy discussion of increasing the property tax rate by 1.7 cents to pay for school obligation bonds and
using the School Fund Balance to replace State reimbursements if the money is not received, the Board directed Staff
to present a budget with no increase in the property tax rate and no funding for non-county agencies.
After further discussion of the additional ½ cent sales tax authorized by the General Assembly to become
effective July 1, 2003, the Board directed the County Manager to place this item on the June 17, 2002, agenda for further
discussion and consideration.
ADJOURNMENT
Chairman Davis called for a motion to adjourn the Work Session.
Motion:
Commissioner Caster MOVED, SECONDED by Commissioner Boseman, to adjourn. Upon vote, the MOTION
CARRIED UNANIMOUSLY.
Chairman Davis adjourned the Work Session at 6:35 p.m.
Respectfully submitted,
Lucie F. Harrell
Clerk to the Board