2000-02-11 Budget Work Session
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 764
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Retreat on February 11,
2000, at 12:45 p.m. in Room 501 of the New Hanover County Administration Building, 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; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie
F. Harrell.
Staff members present were: Deputy County Manager, Andrew J. Atkinson; Assistant County
Manager, Dave Weaver; Assistant County Manager, Patricia Melvin; Budget Director, Cam Griffin;
Finance Director, Bruce Shell; Human Resources Director, Andre’ Mallette; IT Director, Bill Clontz;
and Public Information Officer, Mark Boyer.
Chairman Caster called the meeting to order.
County Manager O’Neal reported that after discussion with Staff, it was decided to take a
different approach to the budget process. Instead of having a set agenda with backup information,
Staff felt that a facilitator was needed to assist the Board in identifying and focusing on major budget
issues. After contacting the Institute of Government about a qualified facilitator, Mr. Bruce Payne,
Assistant Planning Director of the City of Jacksonville, North Carolina, was recommended to serve
in this capacity.
On behalf of the Board, Chairman Caster welcomed Mr. Payne.
Mr. Payne presented and explained the purpose of a facilitator process. He stressed the
importance of presenting valid information, making free and informed choices, and providing an
internal commitment. He also presented ground rules and after discussion, the Board agreed upon
the following set of rules:
1.Share relevant information.
2.Be specific and where necessary use examples.
3.Focus on interests and not positions.
4.Disagree openly with any member of the group.
5.Agree on what important words mean.
6.Test assumptions and inferences publicly.
7.Stay focused.
8.Make decisions by consensus.
Chairman Caster expressed concern for the Commissioners being able to speak openly as
suggested by the ground rules with the presence of press. After further discussion, the Board agreed
it would be beneficial to hold open conversation with acknowledgment that some issues are too
sensitive to discuss.
Mr. Payne requested the Board to set an agenda for discussion. After a lengthy discussion,
the Board decided to discuss the following items:
1.City/County Consolidation.
2. Overview of the Budget: Projected Revenues & Expenditures and Debt Service and
Management.
3.Communications with the Public.
4.Employee Compensation & Benefits
5.Outside Agencies
6.How can Staff meet the information needs of the Board of County Commissioners.
7.Efficient Operation of County Government.
8.Capital Improvements Program
9.Drainage
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 765
10.Water & Sewer Funding
11.School Funding.
Discussion was held on the following items.
City/County Consolidation:
The County Commissioners are committed to studying consolidation
of the City of Wilmington and County of New Hanover. The Board agreed to schedule a meeting
with the Wilmington City Council to discuss this matter so a decision can be made on whether to
consolidate the governments or combine some services. This is an important issue that is of major
concern to the community.
After a lengthy discussion on Phase II annexation and the impact to the budget, the Board
agreed to discuss consolidation and annexation as these items impact other budget issues.
Overview of the Budget
Budget Director Griffin presented an overview of anticipated revenues, expenditures and debt
service for the upcoming fiscal year:
Projected Revenues
1.Ad valorem revenue is beginning to decrease because growth has slowed down throughout
the community. The rate of increase in ad valorem revenue is projected to be significantly less
than experienced in past years.
2.With no increase in the tax rate, additional ad valorem revenue for FY 2000-2001 is projected
at $1,700,000.
3.The sales tax revenue is flat. Due to Phase I annexation by the City of Wilmington, the
County lost $1, 200,000 in sales tax revenue and when Phase II is approved, the County will
lose $1,400,000. No additional sales tax revenue is projected for FY 2000-2001.
4.With use of the ad valorem methods of distribution for the sales tax and the recent annexation
by the City, the County portion of the sales tax revenue dropped from 73% to 71%.
Projected Expenditures
1.With only a portion of funding requests received, a conservative estimate of additional
expenditures is $10,000,000.
2.The County funds 743 positions for the New Hanover County School System. When salary
increases are approved by the State for teachers and employees, the County has to increase
salaries for county funded positions.
3.The bond debt payment for New Hanover County Schools and Cape Fear Community College
will require an increase of 4.3 cents on the property tax rate.
4.Construction of a new jail will increase the property tax rate by 1.7 cents; however,
approximately $125,000 will be saved monthly by not having to house and transport inmates
to out-of-county jail facilities.
5.Due to mandates, New Hanover County can control roughly 20% of the total budget.
6.A goal of the County is for the undesignated portion of the fund balance to remain at 16.67%
for FY 2000-2001.
A lengthy discussion followed on unfunded mandates. Commissioner Birzenieks stressed the
importance of informing the public that only 20% of the budget can be controlled by the Board
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 766
of County Commissioners. He expressed concern for continually increasing the property tax rate as
the only source for additional revenue, and he requested the Board to approach the N. C. General
Assembly about authorizing a local option sales tax to relieve local governments.
General discussion was held on services provided by the County that are not required by the
General Statutes. Some of these services are Aging, Water and Sewer, Human Relations, Human
Services Transportation System, New Hanover County Library, Cape Fear Museum, Parks
Department, Veterans Services, and outside agencies. After further discussion, the Board concluded
that the services mentioned had greatly enhanced the quality of life and had been instrumental in
promoting and maintaining economic growth.
County Manager O’Neal advised that if the Board decides to approve the budget with no
increase in taxes other than to pay bond debt service, a policy should be established to eliminate
specific programs instead of cutting a small percentage across-the-board.
Discussion followed on the availability of revenue to fund capital improvement projects.
Budget Director Griffin explained that currently there is a 6.5 cents gap not including the jail or
capital projects. This, in addition to increase in debt service, represents increases of $3,400,000 for
schools, $254,796 for the Southeastern Center, and $547,866 for Cape Fear Community College.
The estimated value of one cent on the tax rate is $1,548,400. She informed the Board that growth
has slowed down and the sales tax revenue will not increase because of annexation.
The Board agreed to request the N. C. General Assembly to authorize a local option sales tax
as an additional revenue source, and if necessary, cut specific County programs instead of small
percentage cuts across-the-board to balance the upcoming budget.
Communications With the Public
General discussion was held on what can be done to better communicate with the public. The
Commissioners expressed frustration about the misinformation throughout the community and the
need to better educate the citizens.
The following items were discussed by Staff and the Board:
Broadcasting Meetings:
1.The estimated cost for broadcasting meetings is $100,000.
After discussion of numerous requests from the public to broadcast meetings and the fact that
television is used more than any other media, the Board requested Staff to prepare cost
figures and details on broadcasting meetings for consideration in the FY 2000-2001 budget.
New Hanover County Web Site:
2. Agendas, action agendas, public notices, road petitions,
applications for appointments to boards and committees, and schedule of regular meetings are
now on the County web site.
After discussion of future uses for the web site, the Board requested Staff to include the
County web page address on all printed materials, letterheads, brochures, appointment cards,
etc.
Inserts in Newspaper:
3. Glossy annual reports in the local paper are expensive and draw
criticism from the general public. The large annexation ads placed in the paper last year did
not provide the County with much feedback.
In concluding this topic, discussion was also held on the possibility of scheduling a weekly
program providing an open net where the Commissioners can receive calls and answer questions from
the public on key issues.
Employee Compensation and Benefits
General discussion was held on the Pay and Classification Study that will be presented to the
Board in March 2000. In order to provide a 2.5 percent salary increase, the total cost will be
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 767
$1,000,000. Commissioner Birzenieks advised that reviewing the Pay and Classification Study will
be a major topic that will require a special work session. The components of the study are as follows:
(1) bringing various jobs into a proper perspective and relationship; (2) compensation based on the
proper perspective and relationship plus external factors in the market place; (3) internal equities; (4)
compression issues; (5) recruitment and retention; and (6) employee morale.
After further discussion, the following points were discussed:
1.Governments and organizations are becoming flatter and the cost of technology has allowed
decision-making to occur on a broader range. Persons in positions must adjust to the change
and upgrade their skills so a quick and accurate response can be provided to the public.
2.In the past, reclassification of positions was based on the position, not the person. The
current trend is pay for the skills provided by the person. This will reduce the number of
classifications based on skills of employees in jobs to increase the salary ranges to pay persons
for skills and knowledge acquired on the job. The County must be competitive in salaries and
benefits in order to attract qualified applicants and retain competent employees. Over 20%
of persons hired last year started considerably above the minimum pay grade which does not
provide much time before these employees are at the top of the pay grade.
3.The turnover rate for New Hanover County is 15%.
4.The efficiency of the pay plan needs to be increased.
5.New Hanover County wants to be an employer of choice.
A lengthy discussion followed on the turnover rate. Commissioner Birzenieks requested the
total cost of recruiting, training, and hiring a new employee to replace the loss of a valued employee.
He emphasized the importance of maintaining employee morale and stated this should be a key goal.
Vice-Chairman Greer stated that he felt the Board should decide on what amount of money
should be allocated for salaries and benefits so that Staff will know how to prepare the budget.
Commissioner Birzenieks agreed and stated to bring the system into balance will cost money
but the turnover rate will be reduced. The Board needs to know how much money is saved by
reducing the turnover rate.
After further discussion, the Board requested Staff to: (1) prepare a detailed analysis of why
the turnover rate is 15% and the total cost for this turnover; and (2) the cost of bringing the entire
classification system into balance.
Funding for Outside Agencies:
General discussion was held on funding outside agencies. Commissioner Birzenieks spoke
on the need to justify funding an agency by asking the following questions:
1.What good work does your organization provide from a social perspective that
enhances the quality of life in New Hanover County?
2.How does your organization save money for the taxpayers? Proof of this savings
should be provided as part of the budget review process.
3.What does your organization do to enhance revenues that come from the citizens of
New Hanover County?
Commissioner Birzenieks requested the Commissioners to consider these three questions
when the outside agencies appear before the Board for funding.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 768
Deputy County Manager Atkinson noted that all outside agencies are required to present
performance measures, which should provide information on how the agency saves money for the
taxpayers.
Budget Director Griffin advised that performance measures have not been required for all
outside agencies because of the following reasons: (1) many of the agencies are too small to have
enough personnel to train in how to complete performance measures; and (2) a significant amount
of time will be required by Staff to monitor the validity of the performance measures.
Further discussion was held on the following points:
1.Outside agencies are subjected to the review of the Human Services Allocation Advisory
Committee. This Committee gives numerous hours in determining which agency should
receive funding.
2.Outside agencies create a small budget impact but require an inordinate amount of Staff time.
In concluding this section, the Board agreed to continue to review outside agency funding
requests through the Human Services Allocation Advisory Board with inclusion of the three questions
presented by Commissioner Birzenieks into the process.
Discussion of How Staff Can Meet Information Needs of the Board of County Commissioners
A lengthy discussion was held on meeting the information needs of the Board. The following
points were presented:
1.Concern was expressed by the Commissioners about the tremendous amount of information
received between e-mail, faxes, and in-house mail boxes with a repeat of many documents.
It was agreed that when information is faxed to the Commissioners, a hard copy should not
be placed in office mail boxes.
2.The Finance Director was requested to provide a quarterly financial summary on the financial
status of the county explaining the strong areas and points of concern. If any exceptions
occur, the Board should be alerted.
3.Authorization to hire a Clerk to the Board Trainee/or recorder position to reduce the
workload on the Clerk. The new position should be in place no later than January 1, 2001,
with a training period of at least one year. Further discussion was held on contracting out the
minutes, and the Clerk was requested to check into how other counties have contracted out
this service.
4.Eliminate large Blue Budget Notebooks to each County Commissioner and place one large
Notebook with outside agencies in the Governing Body Office for review by the
Commissioners and general public.
Chairman Caster asked if anyone would like to discuss crime as part of the budget.
Commissioner Birzenieks recommended scheduling a work session to discuss crime in the
community instead of including this item as part of the retreat.
The Board agreed not to include crime as part of the agenda for the retreat.
MEETING RECESSED
Mr. Payne requested the Board to advise him on how the facilitation process was working.
He asked if he was intervening too much, sufficiently challenging the Board, or not allowing the
Board to discuss issues they want to discuss.
Commissioner Birzenieks commended Mr. Payne for the manner in which he had kept the
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 769
group on the subject being discussed. He advised that in the past the Board had tended to veer away
from topics of conservation and the retreat has ended with very little direction given to the Budget
Director for preparing the fiscal year budget.
After further discussion of major issues being addressed at the meeting tomorrow and the
need to provide direction to Staff and the Budget Department, Commissioner Birzenieks requested
the Board to decide if the Commissioners do not want a tax increase other than 4.5 cents for debt
service, or if they want to allow Staff to bring back a recommended budget. He stressed the
importance of providing some direction to Staff.
After further discussion, the Board agreed that specific direction should be provided to Staff.
ASSEMBLY
The New Hanover County Board of Commissioners reconvened to the Budget Retreat session
on Saturday, February 12, 2000, at 8:30 a.m. in Room 501 of the County Administration Building,
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; County Attorney, Wanda M. Copley; and Clerk to the Board, Lucie
F. Harrell.
Staff members present were: Deputy County Manager, Andrew J. Atkinson; Assistant County
Manager, Dave Weaver; Assistant County Manager, Patricia Melvin; Budget Director, Cam Griffin;
Finance Director, Bruce Shell; Human Resources Director, Andre’ Mallette; IT Director, Bill Clontz;
and Public Information Officer, Mark Boyer.
Chairman Caster called the meeting to order and requested Mr. Payne to begin with discussion
of capital improvements.
CAPITAL IMPROVEMENT PROJECTS
Discussion was held on the fact that consolidation will directly affect capital improvement
projects, particularly new space, such as a new Administration Building. County Manager O’Neal
expressed concern for the unacceptable working conditions in the Annex Building and stated the
building needed to be demolished.
Construction Needs:
Consolidation of City and County Governments:
1. Consolidation will directly affect capital
improvement projects, particularly the new administration building.
Annex Building:
2. After hearing from the County Manager regarding the unacceptable
working conditions in the Annex Building, the Board agreed that this issue would have to be
addressed.
Future Use of Existing Law Enforcement Building:
3. Architects have informed Staff that
converting the old jail into office space would be extremely expensive. When the new jail is
constructed, 60 cells will be used as holding cells for prisoners with court appearances, the
Emergency Operations Center will be expanded, and a few administrative offices will be
provided.
General discussion was held on completely closing down the existing jail facility. Vice-
Chairman Greer spoke on constructing a new jail to provide enough jail cells and
administrative space for the Sheriff and stated it now appears that the County will be
operating two jail facilities. County Manager O’Neal explained that cells on the first floor are
needed to hold prisoners with court appearances, and he stated it was never the intent of
Staff to close the existing Law Enforcement Building.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 770
Comprehensive Capital Improvements Plan:
4. After discussion of the millions of dollars in
capital projects, the Board agreed to prioritize the capital projects and develop a list so the
public can be informed. This type of plan will assist the County in maintaining its excellent
bond ratings.
Projects Underway:
New Jail:
1. Discussion was held on the monthly cost of transporting and housing prisoners in
out-of-county facilities and the cost that could be involved with lawsuits if the jail
overcrowding is not addressed. The Board agreed that construction of a new jail should be
the number one priority.
Further discussion was held on the estimated cost of the new jail at $34,550,000, which will
affect the property tax rate at $0.65 cents during FY 2001-2002.
Northeast Branch Library:
2. This project is underway and the debt service will be $0.02 for
FY 2000-2001 and $0.04 for FY 2001-2002 and gradually decreasing to $0.03 in FY 2003-
2004 and FY 2004-2005.
Judicial Building Expansion:
3. This project is underway and construction will begin when
the City Council approves parking requirements. The debt service will be $0.64 in FY 2001-
2002; $0.62 in FY 2002-2003; $0.60 in FY 2003-2004; and $0.58 in FY 2004-2005.
Discussion followed on the need to provide adequate parking spaces for the expansion, which
will require construction of a parking deck or some other alternative.
Veterans Park:
4. This project is underway. The debt service will be $0.24 in FY 2001-2002;
$0.23 in FY 2002-2003; $0.22 in FY 2003-2004; and $0.22 in FY 2004-2005.
Soccer Complex:
5. This project is underway and debt service will be $0.14 for FY 2000-2001
and $0.27 for FY 2001-2002; $0.26 in FY 2002-2003; $0.25 in FY 2003-2004; and $0.24 FY
2004-2005.
New Bond Issues:
Open Space Bond Issue:
1. If the bond referendum is approved by the voters on May 2,
2000, the debt service will be $0.24 for FY 2000-2001 and $1.24 in FY 2001-2002.
Natatorium:
2. If an $8,000,000 natatorium bond referendum is placed on the November ballot
and is approved by the voters, the debt service will be $0.21 in FY 2001-2002; $0.41 in FY
2002-2003; $0.40 in FY 2003-2004 and $0.38 in FY 2004-2005.
Future Capital Projects:
1.Administrative Building: A lengthy discussion was held on replacing the existing Annex
Building and including the parking deck required for the Judicial Expansion. Further
discussion was held on whether a private concern could build a parking deck and what would
be the most cost-effective solution for parking.
General discussion occurred on the proposed plan to use the Library site to construct a new
Administration Building that will include enough space to house employees in the Annex
Building, construct a parking deck to accommodate library parking on the first level, provide
parking spaces for the Judicial Expansion as required by City regulations; and provide parking
for county employees. If this plan is approved, the Library Advisory Board is to be included
in the planning process for design of the site. The existing Annex Building would be
demolished and the existing County Administration Building could be rented, sold, or
demolished. The Board decided that use of the County Administration Building could be
determined at a later date.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 771
A lengthy discussion followed on the commitment made by the Board for development of
soccer fields. The Board agreed to the following items: (1) if the Open Space referendum is approved
by the voters, the Soccer Complex could be funded from the bond proceeds; (2) continue to develop
soccer fields on the North Campus of Cape Fear Community College regardless of whether the bond
issue is approved.
Further discussion was held on the commitment by the Board to develop soccer fields. The
Clerk to the Board was requested to review the minutes of the Board to determine the level of
commitment.
In concluding this section, the Board agreed that the jail, administration building and parking
deck were linked and should be planned and constructed as a single project. The Board also agreed
that a Capital Improvement Program Ordinance should be finalized and submitted to the Board for
consideration at the upcoming meeting.
BREAK
Chairman Caster called a break at 2:00 p.m. until 2:15 p.m.
DRAINAGE
Assistant County Manager Weaver presented an overview of the following drainage options:
1.A Drainage Program could be established and supported through the General Fund.
2.Watershed Districts could be created and residents would be taxed by the District.
3.Develop a Utility Enterprise Program whereby the County could treat drainage and storm
water as a utility. The City of Wilmington has a storm water utility.
4.In the future, EPA Phase II Storm Water Regulations will affect New Hanover County.
Storm water will be permitted through the NPDES system, which is similar to Sewer
Discharge Permits. The major requirement will be to map all storm water drainage in New
Hanover County. This will take a considerable amount of time.
Under any program, the miles of ditches will have to be identified, which will be time
consuming.
5.The County could investigate a joint program with the City of Wilmington. Annexation or
consolidation will affect any County drainage program.
In concluding this section the Board agreed that the County should continue to clean out
ditches as being done in the Runnymeade Subdivision, work on developing drainage regulations that
will reduce the generation of future storm water; develop financing options, examine treating drainage
as a utility; and wait until the Drainage Work Session has been held on March 2, 2000 before
rendering any further decisions.
WATER AND SEWER
The following items were discussed.
1.The Middle Sound System is in the design phase.
2.Progress is being made by the City and County in expanding the Northside Wastewater
Treatment Plant.
3.The Castle Hayne Collection System is under design.
4.Financing of the Water and Sewer District is in place.
In concluding this section the Board commented on being satisfied with how water and sewer
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 772
projects were prioritized and felt this priority list should be included in the Capital Improvement
Programs Ordinance.
SCHOOL FUNDING
A lengthy discussion was held on school funding and the continued increase in County funding
for schools. The following items were discussed:
1.The percentage of the County budget is steadily increasing. With the County funding 743
school positions, the costs continue to increase.
2.The County Commissioners have requested the Board of Education to prioritize their needs.
During the last budget year, the Board of Education informed the board that all items
requested were needed; however, the manner in which school budgets are being presented is
much better than in previous years.
3.The State and local funding responsibilities for schools have become blurred. Local
government continues to receive mandates with no funding. These responsibilities need to
be clarified.
4.The relationship between the Board of County Commissioners and the Board of Education
is good.
A lengthy discussion was held regarding the amount of space per student, cost per student
and pay for teachers. The Board requested Staff to provide the following information to assist the
Board in evaluating the upcoming school budget request:
1.Amount of space required per student in New Hanover County Schools.
2.Actual cost per student.
3.Teacher pay and other comparative information on the positions funded by New Hanover
County.
Other Issues:
Transportation:
1. Chairman Caster reported that discussion is being held on the possibility of
the Wilmington Transit Authority and New Hanover Human Services Transportation pooling
their efforts. As this issue is pursued, the Board will be informed.
Courts and Criminal Justice System:
2. The County has been generous in its contributions
to the courts and criminal justice system. These contributions have improved the efficiency
of the court operations; however, the Structured Sentencing and Juvenile Programs have cost
a great deal of money.
In concluding the retreat, Chairman Caster expressed appreciation to Mr. Payne for his
services and stated he felt a great deal of progress had been made in discussion of major issues. He
noted that more Budget Work Sessions would have to be held, but he felt the retreat had been a
successful starting point.
Chairman Caster also expressed appreciation to Staff for the work given to prepare for the
retreat.
ADJOURNMENT
Chairman Caster called for a motion to adjourn.
Motion:
Vice-Chairman Greer MOVED, SECONDED by Commissioner Howell to adjourn. Upon
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 27
MINUTES OF BUDGET RETREAT, FEBRUARY 11 & 12, 2000PAGE 773
vote, the MOTION CARRIED UNANIMOUSLY.
Chairman Caster adjourned the meeting at 2:30 p.m.
Respectfully submitted,
Lucie F. Harrell
Clerk to the Board