2001-04-16 Work Session - Budget
NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28
BUDGET WORK SESSION, APRIL16, 2001 PAGE 554
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Monday,
April 16, 2001, at 1:30 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 Work Session to order.
County Manager O’Neal advised that as the budget process moves forward, he wanted to be
sure the press was aware of the steps taken by Staff to reduce the budget so the public can understand
the challenges facing the Board with adoption of the FY 2001-2002 Budget. He presented and
discussed the following items:
1.Staff has reviewed every departmental budget, the public seeing a reduction in services. This
approach should not be taken in multiple years because the quality of services will begin to
decline.
2.No increase is budgeted for schools except for expenses incurred with the opening of new
schools. There is no increase in funding to Cape Fear Community College or the
Southeastern Center, and funding has been reduced by 25% to outside agencies.
3.County-wide training and travel have been cut by 50%, the Holiday Reception for employees
has been eliminated and the Employee Appreciation Day budget has been reduced to $20,000.
Overtime has decreased, the Library book budget has been cut by 25%, the County match to
the Wilmington Partnership to Cease Firearm Violence grant has been eliminated, and no
funds are budgeted for capital improvements to County Parks.
The major expenses in the FY 2001-2002 Budget are as follows:
Debt Service/General Fund$ 4,414,521
General Fund Transfer to Schools(New Schools only) 3,488,421
Full Year Implementation of Pay and Classification Plan 3,371,517
Department of Social Services-Medicaid 1,857,572
Medical and Dental Insurance 400,000
Veterans Park - Additional Positions 168,413
Veterans Park - Operating 283,840
TOTAL$13,984,284
The Debt Service/General Fund increase is totally comprised of installment debt which has
accumulated over the years, such as the jail expansion, courthouse, expanded judicial building,
expanded Library, and expanded parks system. These projects have been undertaken to provide
services needed by the public.
Due to recent changes in Medicaid regulations, the Department of Social Services has
estimated an additional cost that will have to be funded by the County.
The medical insurance will only increase by 5.8%.
Six instead of the twelve requested grounds maintenance worker positions are being
recommended for the Parks Department to maintain school ground areas and ballfields at Veterans
Park.
Changes in revenue at the current tax rate are not sufficient to balance the budget shortfall.
The major changes are as follows:
NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28
BUDGET WORK SESSION, APRIL16, 2001 PAGE 555
Increase in Ad Valorem Taxes (Current Tax Rate)$2,690,100
Decrease in Sales Taxes* - 401,531
Decrease in DSS Revenue (Since not an Electing County) - 600,000
Total Loss$1,688,569
*The decrease in the sales tax is caused by two factors: (1) a slowdown in the economy; and
(2) annexation. The decrease in revenue cannot be blamed totally on annexation.
The current gap in funding is about $12.4 million which represents approximately 7.6 cents
on the tax rate. With more unfunded federal and state mandates, the elected officials should urge the
N. C. General Assembly to enact legislation to allow local governments to implement a one-cent
point-of-origin local option sales tax to assist with funding mandated programs and educational needs.
Chairman Davis referenced the joint meeting with the Board of Education held on April 10,
2001, and stated the schools will be presenting a bare bones budget with an increase of $15,729,106
over last year’s request. This means that in order to fully fund the school budget the property tax rate
will have to be increased over 12 cents.
Commissioner Caster asked if the $11 million capital outlay included bond indebtedness.
Budget Director Griffin responded that debt service was not included in the capital outlay funding.
County Manager O’Neal advised that after numerous conversations with the Superintendent
of Schools it appears the school operating budget has been cut to a bare minimum.
A lengthy discussion followed on providing direction to Staff so a recommended budget can
be prepared. County Manager O’Neal stressed the importance of understanding that if the tax rate
is not increased by 7.6 cents, services and programs will have to be cut.
Commissioner Boseman requested Staff to provide statements showing the approved funding
to each County Department in FY 2000-2001 and recommended funding to each County Department
for FY 2001-2002 so she could compare figures. County Manager O’Neal responded that he would
be glad to provide that information.
Further discussion was held on funding for outside agencies. County Manager O’Neal
advised that funding these agencies could be handled in two ways: (1) allow the funding to remain
the same as last year; or (2) reduce funding gradually for a period of years. This will be a difficult
decision for the Board because many of these agencies provide needed services. He also noted that
another difficult decision for the Board would be whether to continue to provide funding to the beach
communities which has been a long standing tradition for the past 20 years. When Revenue Sharing
was available, the County began making contributions to the beach communities as a gesture for
public use of the beaches.
Commissioner Pritchett pointed out that the County had already made a contribution to
Carolina Beach by not requiring the Town to pay its portion of the beach renourishment project.
A lengthy discussion followed on how to further reduce the County Budget. Vice-Chairman
Greer suggested requiring each employee to take two days off without pay.
Commissioner Pritchett expressed concern for some employees living from hand to mouth and
stated that two days off without pay could be difficult for them to handle.
After further discussion, the Board requested County Manager O’Neal to provide information
on the amount of money that can be saved during the next fiscal year if all County employees are
required to take two days without pay.
County Manager O’Neal responded that he would be glad to prepare the information
requested and stated some departments could reduce the hours of operation. For example, the
Library could close the Main Branch on Sunday for a year representing a savings of $16,000; opening
NEW HANOVER COUNTY BOARD OF COMMISSIONERSBOOK 28
BUDGET WORK SESSION, APRIL16, 2001 PAGE 556
the Carolina Beach Branch Library one hour later and closing on Saturday would save approximately
$7,700; closing the Myrtle Grove Branch Library at 6:00 P.M. instead of 9:00 P.M. would save
approximately $7,000; closing the Northeast Regional Library at 6:00 P.M. instead of 9:00 P.M.
would save approximately $14,000; and closing all branch libraries on Friday would save $57,000.
If these figures are added together, the total savings would be approximately $101,700; however, this
would significantly impact the Library System.
After a lengthy discussion on providing direction to Staff, Chairman Davis asked if the Board
would like for the County Manager to prepare a recommendation with a tax increase less than 7.6
cents.
The Board requested the County Manager and Staff to prepare two budgets, one with a tax
increase of 1.8 cents and the other with a tax increase of 4 cents.
County Manager O’Neal asked when the Board would like this information to be presented.
The Board agreed to meet on Monday, April 23, 2001 at 5:30 P.M.
ADJOURNMENT
Chairman Davis called for a motion to adjourn.
Motion:
Commissioner Caster MOVED, SECONDED by Commissioner Pritchett, to adjourn. Upon
vote, the MOTION CARRIED UNANIMOUSLY.
Chairman Davis adjourned the meeting a 3:45 P.M.
Respectfully submitted,
Lucie F. Harrell
Clerk to the Board