Loading...
2001-05-03 Special Meeting/Budget WS NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28 SPECIAL MEETING AND BUDGET WORK SESSION, MAY 3, 2001 PAGE 560 ASSEMBLY The New Hanover County Board of Commissioners held a Special Meeting on Thursday, May 3, 2001, at 6:15 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; Deputy County Attorney, Kemp Burpeau; and Clerk to the Board, Lucie F. Harrell. Chairman Davis called the meeting to order and stated that the purpose of the Special Session was to reject bids received on the new Jail Project. Motion: Commissioner Caster MOVED, SECONDED by Vice-Chairman Greer, to reject the bids received and proceed with the revised schedule to advertise and re-bid the contracts. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chairman Davis requested an explanation of the misinterpretation over the multi-prime bids. Deputy County Attorney Burpeau explained that the misinterpretation involved a chart used by the State Building Commission outlining procedures to open bids under certain circumstances. The chart was in error and has now been corrected by the State Building Commission; however, Staff followed the first chart which created the need to reject the bids and re-bid the contracts. Vice-Chairman Greer emphasized the importance of constructing a jail that will meet the County’s future space needs without extra frills such as an indoor pistol range and vehicle storage building. Deputy County Manager Atkinson advised that the indoor pistol range had been eliminated because of stringent rules and regulations for operating a facility of this type. The Sheriff now plans to use an outdoor shooting range on Highway 421 North. With the indoor pistol range eliminated, the vehicle storage building has been downscaled to a metal building on a concrete platform, which will be much less expensive. Discussion followed on whether there were other ways to save money on the Jail Project. Deputy County Manager Atkinson explained that the 40 bed dormitory will be bid as an “add” alternate so the cost can be determined and the Commissioners can decide whether to eliminate this facility or move forward with construction. The dormitory space is not a highly secured area and it will be much cheaper to construct. The Carter Goble firm feels that it will be a long time before 648 beds are needed; therefore, inmates can be placed in one of the pods. The Sheriff’s Department is in favor of the dormitory because it provides flexibility in classifying inmates and reduces the number of guards needed at the jail. The second “add” alternate bid is the Work Release Facility. The Judicial System has needed this facility for a long period of time. Currently, there is not enough space to operate a Work Release Program. The Work Release Facility would allow people to work seven days a week and check back into the facility every night. The old jail annex building on Division Drive is currently used for work release offenders on weekends, but the space in the building is severely limited because of its poor condition. In closing, Deputy County Manager Atkinson informed the Board that separate bids would be received on the dormitory and the Work Release Building which will provide an opportunity for the Commissioners to decide to eliminate or move forward with construction of these buildings. ADJOURNMENT Chairman Davis called for a motion to adjourn. NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28 SPECIAL MEETING AND BUDGET WORK SESSION, MAY 3, 2001 PAGE 561 Motion: Commissioner Caster MOVED, SECONDED by Vice-Chairman Greer, to adjourn. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chairman Davis adjourned the meeting at 6:20 P.M. Respectfully submitted, Lucie F. Harrell Clerk to the Board MINUTES OF BUDGET WORK SESSION, MAY 3, 2001 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, May 3, 2001, at 6:25 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; Deputy County Attorney, Kemp Burpeau; and Clerk to the Board, Lucie F. Harrell. Chairman Davis called the meeting to order. County Manager O’Neal advised that Staff was directed to prepare three different scenarios representing a tax increase of 1.8 cents, 4 cents, and 7.6 cents. This information has been presented to the Board, and Staff needs direction on how to prepare the budget. The Recommended FY 2001- 2002 Budget is scheduled to be presented on May 21, 2001 with the Public Hearing being held on June 4, 2001 and final adoption of the budget on June 18, 2001. County Manager O’Neal presented a review of additional information being presented in the budget documents and he offered to answer questions. Chairman Davis asked if there was any material in the packet that was different from the information previously presented. County Manager O’Neal responded that no differences were presented, but the following additional information has been included in the packet: (1) the impact of funding for schools and Cape Fear Community College on future budgets; (2) an explanation of the general fund transfer to schools; and (3) basic information from School Officials regarding their budget request. Commissioner Boseman asked if a tax increase of 7.6 cents would raid the Schools Fund/ fund balance. Budget Director Griffin responded that all three scenarios would raid the Schools Fund/ fund balance. County Manager O’Neal referenced the information presented on school debt service and how this debt will impact schools. He stated that it appears the General Assembly will not allow counties to impose a one-cent local option sales tax which means the only major source of revenue will be the ad valorem property tax. He also referenced the spreadsheet that was e-mailed from N. C. Association of County Commissioners dealing with impact of Medicaid and advised it was frightening to see the share paid by counties since 1985. In the 1985-86 Budget, New Hanover County’s share of Medicaid was $673,000 and the projected cost in FY 2002-2003 is $8 million. This is an expenditure that the Commissioners or Staff cannot control. NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28 SPECIAL MEETING AND BUDGET WORK SESSION, MAY 3, 2001 PAGE 562 Chairman Davis asked if the Board wanted to discuss the budget packet now or digest it over the weekend and make decisions on Monday, May 7, 2001. Commissioner Boseman noted that she would like to give more money to schools even if taxes have to be raised. She also spoke in opposition to the increase in the Sheriff’s budget with continued annexations by the City. Commissioner Boseman asked if the employees could pick up the $400,000 increase in health insurance. County Manager O’Neal responded that this could be accomplished. Budget Director Griffin explained that approximately 25% of County employees did not get any significant benefit from the new Pay and Classification Plan; therefore, the employees will be receiving less money if the monthly insurance premium is increased. Commissioner Boseman asked how much more money could be given to the schools with a tax increase of 10 cents. County Manager O’Neal advised that if taxes were raised by 10 cents he would use the 7.6 cents scenario with the additional .4 cents being used to cushion county government and the additional 2 cents given to the schools. Chairman Davis expressed concern for a tax increase of 10 cents being placed on the backs of the taxpayers when the federal and state governments are not providing funding for mandated programs and services. It appears that the N. C. General Assembly is not in favor of enacting legislation to allow New Hanover County to impose a one-cent local option sales tax that would generate revenue at approximately $18 million per year. He referenced the resolution that had been sent to Mr. Ed Higgins, Chairman of the Board of Education, and stated that no response had been received as of this date. A lengthy discussion followed on the number of bills floating around the General Assembly regarding a one-cent local option sales tax. Commissioner Boseman spoke on sending a letter to the Senators and Representatives asking them to give the people a right to choose how they want to fund education. She expressed concern for this being a vicious circle and stated it was ridiculous to think that education could continue to be funded by the property tax. Further discussion was held on local governments receiving reimbursements for the intangibles and inventory taxes. County Manager O’Neal informed the Board that every scenario presented to the Board includes these reimbursements. He noted if this money is not received, it will have a severe impact on County services and programs. Commissioner Boseman spoke on the need to plan for the FY 2002-2003 Budget and stated that she would not support transferring $2.5 million from the general fund to the Environmental Management Fund because this should be an enterprise fund. With the proposed tax increase for the upcoming budget, a plan should be in place to avoid having to increase the tax rate for FY 2002- 2003. Chairman Davis agreed with the statement made by Commissioner Boseman and stated that a plan must be developed to downsize government to avoid a tax increase in FY 2002-2003. Commissioner Boseman asked whether the County can implement a local program if the N. C. General Assembly does not increase the Homestead exemption to relieve the tax burden on seniors. County Manager O’Neal advised that Dare County had implemented a local program that has not been challenged by the State. He offered to check into the Dare County Program and report back to the Board. NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28 SPECIAL MEETING AND BUDGET WORK SESSION, MAY 3, 2001 PAGE 563 Vice-Chairman Greer expressed concern about the bills in the General Assembly not really addressing the problem faced by many senior citizens living on fixed incomes. For example, there are some older adults that own homes on the beach they have lived in for years. With tax revaluations and continued increases in taxes and insurance, these residents will not be able to remain in their homes unless some form of tax relief is provided. Commissioner Pritchett stressed the importance of looking at what is best for everybody rather than what is best for certain individuals. She suggested educating senior citizens on programs offered by banks allowing them to borrow against a paid mortgage which will be repaid upon transfer of the property or at death. This process allows the banks to manage the problem instead of the County. Vice-Chairman Greer advised that unfortunately local governments have only one major funding source which is the ad valorem property tax. If the County raises the tax rate by 10 cents, people will automatically think that the County is spending too much money without understanding that a majority of services and programs are unfunded mandates controlled by federal and state regulations. If the state and federal governments do not provide funding for mandated programs or allow local governments to enact other funding sources, there is going to be a tax revolt throughout the country. County Manager O’Neal agreed with the statement made by Vice-Chairman Greer and stated that Staff has gone through every County Department and made cuts. Without reimbursements from the State for inventory and intangibles taxes, services and programs provided by the County will be severely cut. Discussion was held on funding for outside agencies. County Manager O’Neal advised that these agencies could be funded at the current level or at a reduced percentage. All outside agencies have been informed about the budget constraints and understand that funding could be reduced. After discussing whether some of the outside agencies should receive any funding, Vice- Chairman Greer suggested a review of these agencies as a goal for the upcoming year. County Manager O’Neal advised that some of the outside agencies are extensions of what the County does in different ways, such as the Committee of 100, which recruits industry and businesses to the area that significantly increase the tax base. Another agency is the Council of Governments which focuses on regionalism which is beneficial to the entire area. In many cases, funding these agencies is an investment in the future. Discussion was held on the impact of the mental health bill being discussed by the General Assembly. County Manager O’Neal advised that passage of this bill will shift the cost of mental health issues to the local level of government. This is a classic example of the State placing the responsibility on the local level instead of dealing with the problem on the state level. Chairman Davis requested direction from the Board in establishing a tax rate for the FY 2001- 2002 Budget. Vice-Chairman Greer advised that he felt the Commissioners were elected to serve the citizens and meet the obligations of the County which means that the Board will have to approve a sizeable tax increase. He stated that he would not be opposed to a tax increase of 7.6 cents with employees being required to take two days off without pay and Staff continuing to look for ways to provide more funding to the schools. County Manager O’Neal advised that the only way to generate more revenue with a tax increase of 7.6 cents is to require employees to take two days off without pay or increase the medical insurance premium for the employees. He expressed concern for either option being difficult on some employees. NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28 SPECIAL MEETING AND BUDGET WORK SESSION, MAY 3, 2001 PAGE 564 Commissioner Caster stated that he would consider increasing the tax rate by 1.8 cents because when looking at the total budget over the last several years, the tax base has greatly increased, the budget has continued to grow, and the citizens cannot continue to bear property tax increases year after year. Commissioner Boseman stated that she would like to give more money to the schools which will require a tax increase; however, she had not decided on a figure. Commissioner Pritchett pointed out that the budget for FY 2002-2003 will present more challenges than this year’s budget; therefore, in order to protect the Fund Balance to maintain current bond ratings, the Board should sufficiently increase the tax rate to avoid a huge tax increase for FY 2002-2003. She stated that she would not vote on a tax rate that will raid the Fund Balance. Chairman Davis stated that he was in favor of increase the tax rate by 1.8 cents because many of the citizens, particularly the elderly on fixed incomes, cannot bear the additional tax burden. In concluding the meeting, Chairman Davis advised that tax increases of 1.8 cents, 4 cents, 7.6 cents, and 10 cents have been mentioned and the Board has generally agreed that the budget should not be balanced by removing money from the Fund Balance to make up for the shortfall. He also reminded the members of the Board that a decision will have to be made on the tax rate before Staff can prepare the budget. County Manager O’Neal advised that he would proceed with preparing a recommended budget that can be discussed and amended. ADJOURNMENT Chairman Davis expressed appreciation to the Commissioners and Staff for attending the Work Session and he adjourned the meeting at 7:40 P.M. Respectfully submitted, Lucie F. Harrell Clerk to the Board