1999-04-26 Budget Work Session
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET WORK SESSION, APRIL 26, 1999PAGE 210
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Monday,
April 26, 1999, at 5:00 p.m. in the New Hanover County Administration Building, Room 501, 320
Chestnut Street, Wilmington, North Carolina.
Members present were: Commissioner Buzz Birzenieks; Commissioner Ted Davis, Jr.;
Commissioner Charles R. Howell; Vice-Chairman Robert G. Greer; Chairman William A. Caster;
County Manager, Allen O’Neal; Budget Director, Cam Griffin; and Clerk to the Board, Lucie F.
Harrell.
Chairman Caster called the meeting to order and stated the purpose of the Work Session was
to discuss preparation of the FY 1999-2000 Budget. He informed the Board that last week he met
with City Councilman Charlie Rivenbark to review funding requests submitted to the City and County
by outside agencies to see if there was a duplication of services. After a brief review, there was no
indication that services provided by these agencies were being duplicated. Since the City Council has
not reviewed the requests, another meeting will be held with Councilman Rivenbark to compare these
funding requests at a later date. The Board will be informed of the results.
Chairman Caster also informed the Commissioners that a resolution of support for the funding
campaign of the St. John’s Museum of Art building will be presented to the Board at the first or
second meeting in May 1999.
REPORT ON THE STATUS OF PREPARING THE FY 1999-2000 BUDGET
County Manager O’Neal reported with the existing funding gap, it will be difficult to prepare
a budget with a revenue neutral tax rate of 48 cents. The New Hanover County School System has
presented a 62% increase in its funding request, which does not include debt service. He advised that
as a result of the property revaluation, final adjustments are still being made in the tax base. Under
new property values, a penny on the tax rate will represent $1,519,000. Currently, there is a gap
between revenues and expenditures of 10 cents. With a continued demand for services, some difficult
decisions will have to be made by the Board in providing direction to Staff for preparation of the FY
1999-2000 budget.
The following budget report was presented by Budget Director Griffin.
Debt Service on New Projects for FY 1999-2000:
A.Airlie Gardens$ 516,705
B.Judicial Building (pending)$ 307,515
C.Administration Building (pending)$ 334,745
D.Schools$2,431,065
Increase in Debt Service between FY 1998-99 and FY 1999-2000 for existing projects is
estimated at $1,994,000.
Environmental Management:
The Environmental Management Department is currently losing 120
tons per day representing a revenue lost of $5,520 per day. Action concerning the tip fee must be
taken by the Board to keep haulers from activating transfer stations. The Commissioners will have
to decide if the WASTEC Facility should remain open or if the tip fee should be reduced to keep the
solid waste flow in New Hanover County.
It would be cheaper to dispose of waste by using the landfill, even if the waste has to be carried out
of the county; however, the long term benefits of allowing WASTEC to remain open are as follows:
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Reduce volume of trash by 80%.
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Reduce landfill space required.
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Reduce environmental liabilities.
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Solve the disposal problem.
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Difficulties that would be experienced in de-commissioning WASTEC and terminating
employees.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET WORK SESSION, APRIL 26, 1999PAGE 211
The Board may wish to consider the following options:
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Immediately reduce the tip fee.
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Add user fee or tax as done in Wake County.
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Add surcharge per ton generated as done in Hennepin County, Maine.
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Establish a County-wide Collection System.
A decision on this matter will have to be made in the near future because of the revenue loss on a
daily basis.
Health Insurance:
There will be an estimated $800,000 increase in the County’s cost of health
insurance. This represents a 20% increase.
Fire Service District:
There is an anticipated tax rate increase of 1 to 1.5 cents for the Fire Service
District to replace fund balance that was budgeted in the past and expended to improve fire protection
in the unincorporated county. Included in the budget request is $1,000,000 to pay for fully funded
positions in the Fire Service. The decrease in the District’s ad valorem tax base is offset by the
increase in the tax base due to the revaluation. An additional position is being recommended to assist
with the administration and training of field personnel in the Fire Service District. The impact of the
City’s annexation plan on the volunteer fire departments will continue to be reviewed.
Operating Capital and Foundation Expenses for Airlie Gardens:
The net operating expenses for
FY 1999-2000 are projected at $836,000. The annual contribution to the Airlie Foundation will be
$500,000 for the first three years. The local match for the N. C. Clean Water Management Trust
Fund is $484,000 for the first four years with a $314,000 net increase each year.
Cape Fear Community College:
Preliminary estimates are that Cape Fear Community College will
request $3,024,543 representing an increase of $438,810 over the current fiscal year. The reasons
for the increase are as follows:
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Increase in utilities, contracted services, and insurance for new buildings at a cost of
$298,396.
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Upgrade and repairs to marine pier at a cost of $100,000.
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Renovation, maintenance and improvements to buildings at a cost of $386,500.
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Install additional security cameras at a cost of $50,000.
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Two new Maintenance Technician positions including fringe benefits at a cost of $48,426.
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Purchase of two trucks for the Maintenance Department and a 25-passenger vehicle at a cost
of $86,500.
New Hanover County Schools:
The New Hanover County Schools have requested a 62% increase,
not including debt service. No dollar amounts have been established at this time, but the following
items will impact funding for the schools:
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Estimated State salary increase of 6.5% for local employees representing a cost of $650,000.
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Classified step increase at 2% representing a cost of $300,000.
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Projected increase in hospitalization rates at 35% representing a cost of $300,000.
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Establish Capital Outlay Contingency account for OSHA safety recommendations.
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Capital Outlay to support Y2K transition.
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Additional positions needed for Technology Support.
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Continued focus on enhancing the maintenance program.
Impacts of Annexation:
The following County functions will be impacted by annexation:
Sales Tax:
The major impact of annexation will be a decrease in sales tax revenue that will
be received by New Hanover County, the New Hanover County Fire Service District, New
Hanover County Schools, Town of Carolina Beach, Town of Kure Beach, and Town of
Wrightsville Beach. A major question that is being referred to the N. C. Tax Research
Division is to determine if the City’s share of ad valorem tax for the next year will be based
on 12 months or 17 months. The impact on the County’s budget is estimated between
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET WORK SESSION, APRIL 26, 1999PAGE 212
$1,863,000 and $2,610,000 depending on the number of months used in the formula.
Fire Service District:
The Fire Service District will lose more than $460,000 in tax revenues
from Phase I annexation. The revenue losses for Phase II are not known. The District will
have to determine how to manage the loss of revenue in future years. The Fire Commission
is currently examining the loss of revenues and will recommend a budget reduction for those
departments impacted by the annexation.
Other Revenue Sources:
The following items will be impacted by annexation:
Cable TV Franchise Fee: The Cable TV Franchise fee will be reduced by an
estimated $60,000.
Beer and Wine Tax: Beer and wine taxes are distributed on a per capita basis. The
estimated loss of revenue is $38,000 due to a decrease in the non-municipal
population.
Intangibles Tax: The County will be allocated the full hold harmless amount on an
overall basis, but municipalities will be distributed shares annually based on the
changing ad valorem tax percentages. Depending on the number of months used for
the City’s ad valorem tax, this loss could be between $160,000 and $182,000.
New Positions:
County departments requested 48 new positions. After a review by Human
Resources, 38 positions are recommended at a net County cost of $717,762.
County Manager O’Neal noted that four new Deputy positions have been recommended to
provide two Deputies for the Department of Social Services, one Deputy for the Library, and one
Deputy for the Juvenile Justice Building. He stressed the importance of providing safe buildings for
County employees and the general public, particularly at the Department of Social Services where
some clients have become more violent than in the past.
Other Items Included in the Proposed FY 1999-2000 Budget:
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Storage/Garage Facility for Property Management$ 80,000
(Funding to be carried over from the current year)
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Automation Process for Register of Deeds Office$272,903
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Assertive Community Treatment Team$231,000
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Local Government Access Channel$ 50,000
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Take Home Cruiser Program - Sheriff’s Department$279,152
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Administrative Reserve in Fire Service District$182,244
to fund initial cost of future projects including the
potential move of the Federal Point Station
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Uniforms will be provided to County paid firefighters
in lieu of leasing uniforms. A few dollars will be saved.
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Vehicles will be purchased for the Fire Inspectors in lieu of reimbursing
the employees for mileage.
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Cancellation of HAZ/MAT and Rescue Services with the City of Wilmington
totaling $45,000. These functions will be provided in-house.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET WORK SESSION, APRIL 26, 1999PAGE 213
Items Not Included in the FY 1999-2000 Budget
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Funding for three positions in the Sheriff’s Department$115,630
(These positions were funded by grants received for the
Domestic Violence Grant and Gang Task Force Grant.)
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Expansion of Castle Hayne Nutrition Site to 5 days per week$ 12,046
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Funding for filming meetings of County Commissioners$100,000
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Juvenile Justice funds are not included. Revenues and expenditures for grant-funded
programs should balance. There may be additional costs as Juvenile Justice Reform is fully
implemented.
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The Courthouse security system is being included as part of the new building.
Budget Director Griffin presented a list reflecting the current budget gap of $14,549,925
(representing 9.6 cents on the tax rate) between expenditures and revenues. A list was also presented
on funding recommendations of the Human Services Allocation Advisory Committee. Budget
Director Griffin advised that funding requests have not been received in the past from the following
agencies:
Inter-City Options:
A funding request was received in the amount of $10,000 to assist with housing
in the inter-city.
N. C. Aquarium at Fort Fisher:
A funding request was received in the amount of $75,000 to assist
with expanding this facility.
Discussion was held on the amount of funding recommended for the Port, Waterway, and
Beach Commission. Chairman Caster commented on discussing this item at a prior meeting and said
he thought the Board had agreed to increase the funding to $5,000 to pay for expenses involved with
lobbying efforts.
Budget Director Griffin said that she would be glad to change the funding to $5,000;
however, the funding request received from the Port, Waterway, and Beach Commission was in the
amount of $1,350.
Discussion was held on funding for the Film Commission. Vice-Chairman Greer advised that
the Film Commission has requested $80,000 from both the City and County. It appears the City has
reduced its funding request which could become a problem for the Film Commission.
County Manager O’Neal commented on the need to protect the film industry, which has been
economically beneficial to the entire area, and he stated as the budget process progresses, he will keep
the Board informed on the needs of the Film Commission.
A lengthy discussion was held on continued funding for the Cape Fear Coast Line and
Convention Center. County Manager O’Neal explained that the project was funded from an Urban
Development Action Grant (UDAG), which is no longer available through HUD. The project was
developed under a public/private partnership whereby the local government and a private business
came together to stimulate the local economy in an urban area. The City and County committed to
a certain amount of funding for a number of years. This is why $50,000 has been included in the FY
1999-2000.
County Manager O’Neal advised that information had been received this morning from City
Manager Gornto regarding the possibility of the Coast Line Inn being sold. He informed the Board
that he would keep them informed of any further developments.
Vice-Chairman Greer asked how long the County would be obligated to pay the $50,000
funding appropriation.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET WORK SESSION, APRIL 26, 1999PAGE 214
Finance Director Shell responded he was not sure about the number of years, but he thought
it was a 3-year lease agreement. He advised that he would check into this matter and report back to
the Board.
Commissioner Howell commented on Cape Fear Resource Conservation and Development,
Inc. submitting a funding request of $3,000 with a funding recommendation of $1,325, and he asked
if the Human Services Allocation Advisory Board was aware that federal funding has been
significantly reduced for this agency. He requested the Board to consider the funding request
submitted since this agency has been involved with obtaining funding to perform the dredging of
Futch Creek and stabilization of the shoreline along Snow’s Cut.
Commissioner Birzenieks noted that most of the outside agencies do good work and provide
many needed services to the community; however, these organizations should be saving money for
New Hanover County. He used Elderhaus as an example of where the services provided keep the
elderly out of nursing homes and save thousands of dollars in Medicaid costs paid by the Department
of Social Services. He requested the Budget Director to comment on the amount of money spent by
New Hanover County on Medicaid costs.
Budget Director Griffin responded that New Hanover County spent $4,344,000 last year for
Medicaid. She said as the aging population grows and new groups become eligible for Medicaid, this
figure will increase.
A lengthy discussion followed on mandated programs and the lack of state and federal funding
to carry out the programs. It was generally agreed that local governments cannot continue to absorb
these costs. Commissioner Howell requested a list of unfunded state and federal mandates so that
he could forward a copy to Senator Ballantine.
Budget Director Griffin advised she would be glad to furnish the Board a list.
Chairman Caster stated that he was opposed to funding the Friends of Public Radio and the
Friends of Felines.
A lengthy discussion was held on funding needs for the schools. Concern was expressed by
Staff and the Commissioners about the percentage of increase. Commissioner Birzenieks stressed
the importance of funding supplements and salary increases for the teachers in order to remain
competitive. He said without good teachers, New Hanover County will not have quality schools.
A lengthy discussion followed on adopting a revenue neutral budget at a tax rate of 48 cents.
County Manager O’Neal informed the Board that hours had been spent by Staff in trying to reduce
the budgets for each department. He said in order to adopt a budget with a 48 cent tax rate,
programs will have to be cut. The Board of County Commissioners will have to decide what services
and programs should be eliminated.
After further discussion, the Board directed Staff to provide the following items and schedule
another Budget Work Session on May 3, 1999:
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List of unfunded state and federal mandates.
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List of services provided by outside agencies reflecting the amount of County funding and the
amount of money each agency saves New Hanover County.
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Figures showing the amount of money appropriated to New Hanover County Schools for
maintenance.
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List of money in reserve for unforeseen expenses.
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List of programs that can be eliminated.
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List of bond debt service, including costs associated with capital projects.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET WORK SESSION, APRIL 26, 1999PAGE 215
Chairman Caster requested Staff to thoroughly review the figures presented to see if the
budget can be cut so the property tax will not have to be increased more than 2.6 cents to pay the
debt service for the school and Cape Fear Community College bonds.
ADJOURNMENT
Motion:
Commissioner Birzenieks MOVED, SECONDED by Vice-Chairman Greer to adjourn.
Upon vote, the MOTION CARRIED UNANIMOUSLY.
Chairman Caster adjourned the meeting at 7:31 p.m.
Respectfully submitted,
Lucie F. Harrell
Clerk to the Board