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HomeMy WebLinkAbout1997-01-17 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 766 ASSEMBLY The New Hanover County Board of Commissioners held a retreat on Friday, January 17, 1997, at 2:00 P.M. in the Conference Room at the Hampton Inn and Suites, 1989 Eastwood Road, Wilmington, North Carolina. Members present were: Commissioners Buzz Birzenieks; Ted Davis, Jr.; Charles R. Howell; Vice-Chairman William A. Caster; Chairman Robert G. Greer; County Manager, Allen O'Neal; Assistant County Attorney, Kemp Burpeau; and Clerk to the Board, Lucie F. Harrell. Chairman Greer called the meeting to order. County Manager O'Neal commented on the economic outlook for the next fiscal year and stated because of two hurricanes many challenges were facing New Hanover County. He advised that Staff would be making presentations on the key issues and he requested the members of the Board to ask questions or hold discussion at any time during the presentations. In closing, County Manager O'Neal emphasized the importance of direction being given to Staff for preparation of the FY 1997-98 Budget, and he requested the Board to focus on providing that direction by the end of the retreat on Saturday afternoon. REVIEW OF BUDGET PREPARATION PROCESS Budget Director, Cam Griffin, presented the FY 1997-98 Budget Preparation Schedule outlining the required dates for submission of outside agency funding requests and departmental line item budgets with notebooks being distributed to the Board of County Commissioners on March 7, 1997. Department heads will meet with the County Manager and Budget Team to review budget requests during the weeks of March 10-14, 1997, March 17-21, 1997 and March 24-17, 1997. The Commissioners are invited to attend the budget review meetings. A Budget Work Session will be scheduled with the Board of County Commissioners to review the departmental and outside agency budget requests in early April. The School budget should be presented to the County by April 16, 1997, and an informal budget will be forwarded to the Board of County Commissioners on April 28, 1997. The County Manager will present the recommended budget at the Board meeting of May 5, 1997. Budget Work Sessions will be scheduled between May 6- 16, 1997, for review and discussion of the proposed budget. A Public Hearing will be held on the evening of May 19, 1997. The FY 1997-98 Budget will be adopted June 2, 1997. SCHOOL NEEDS Discussion was held on the submission of the School Budget. County Manager O'Neal advised that by State Law, School Districts were not required to submit budgets until May 15, 1997; however, the New Hanover County School District had been most cooperative in the past with submission of its budget by the middle of April. All agencies (including the School District) receiving County funding are provided information on the deadline for submission of budgets. The outside agencies have already been informed that no additional funding should be requested for the next fiscal year. Budget Director, Cam Griffin, presented a statement reflecting the funding for public schools during the last five years and the portion of the two half-cent sales taxes earmarked for school capital outlay. The public schools receive a larger share of the County's budget than any other single program. Local governments are responsible for capital improvements and maintenance of physical plants. The County is required to fund the following items for schools: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 767 (1)Buildings, furniture, and apparatus (2)Garage and maintenance equipment for school buses (3)Liability insurance (4)Maintenance of plant (5)School Sites (6)Proper furnishings for the Superintendent's office (7)Supplies for school buildings, books, and other instructional supplies (8)Water supply and sewage facilities The Board of Education formulates education policy, and the Board of County Commissioners determines the amount of local contributions for public education. If the School District is not satisfied with the local funding allocation, there is a judicial dispute resolution procedure that can be pursued by the School District. Counties must make separate allocations for the current expense and capital outlay funds. If greater control is desired, funds can be further allocated by purpose, function, or project. Counties can allocate capital expenditures by individual capital projects. The Board of County Commissioners can stipulate the amount of flexibility the Board of Education has in modifying expenditures within 10-25 percent. The following General Fund transfers have been made to the School District for the last five years: FY Transfer from Dollar Percentage General Fund Increase Increase FY 1996-97 $28,870,354 $3,993,916 16.1% FY 1995-96 $24,876,438 $2,554,206 11.4% FY 1994-95 $22,322,232 $1,606,567 7.8% FY 1993-94 $20,715,665 $1,445,279 7.5% FY 1992-93 $19,270,386 $2,109,370 12.3% FY 1991-92 $17,161,016 In addition to the General Fund transfer, the schools receive a portion of the two half-cent sales taxes earmarked for school capital outlay as follows: Two 1/2 Cent Sales Tax Contributions to Schools FY 1996-97 $4,122,813 FY 1995-96 $4,138,102 FY 1994-95 $3,796,165 FY 1993-94 $3,423,590 FY 1992-93 $3,009,838 FY 1991-92 $3,060,914 Primary funding pressures on the schools are due to the continued increase in population, which creates a need for more schools, maintenance, and improvements of existing buildings. State regulations are subject to change that could lead to an increase in local spending. A lengthy discussion was held regarding sales tax revenue. Finance Director, Bruce Shell, reported the one-cent sales tax was authorized by the General Assembly in 1971. This tax is allocated by the State according to where it is collected. The State NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 768 distributes these funds quarterly by using the ad valorem method. This formula was chosen by the Board of County Commissioners, and the sales tax is distributed based upon each local government's prior year property tax levy in correlation to each other; therefore, the tax levies for New Hanover County, the City of Wilmington, Carolina Beach, Kure Beach, and Wrightsville Beach are totaled with each government receiving a distribution of available sales tax based on its levy as a percentage of the total. New Hanover County is required to allocate a portion of the one-cent sales tax to the Fire Service District using the ad valorem approach. The one-cent sales tax is unrestricted and can be used for any government activity. The two half-cent sales taxes were authorized by the General Assembly in 1983 and 1986. These taxes are allocated by the State based on the County's population as a percentage of the State population. This formula of distribution has been detrimental to New Hanover County since the County collects more sales tax revenue than is returned by the State. The two half-cent sales taxes are restricted in that 30% of the 1983 tax and 40% of the 1986 tax are earmarked for public schools capital outlay. The remaining 70% and 60% are unrestricted and can be used at the discretion of the Board of County Commissioners. When the Water and Sewer District was established, the Board of County Commissioners made a commitment to transfer the unrestricted portion of the half-cent sales tax to the Water and Sewer Fund. This enabled the County to develop the existing sewer system and pay the annual debt service on the $46 million sewer bond issue that was passed in 1984. With a few exceptions, the County Commissioners have adhered to this commitment. The following chart was presented showing the growth in the sales tax over the past five years reflecting the additional revenue from the one-cent tax over the two half-cent taxes: As of June 30 1992 1993 1994 1995 1996 (Millon Dollars) One Cent $9.6 $10.0 $11.5 $13.0 $14.1 Two 1/2 Cent $6.3 $ 6.9 $ 7.8 $ 8.7 $ 9.5 Discussion was held on the fund balance. Chairman Greer explained the undesignated fund balance serves as a savings account for the County. As it builds, the County can use a portion of the balance to assist with capital projects. For example, a portion of the fund balance was used to construct the Airport. Maintaining an adequate undesignated fund balance is sound fiscal management and a key factor considered by bond rating agencies. Commissioner Birzenieks asked what would be a healthy fund balance? Budget Director Griffin responded the County maintains a sufficient fund balance to operate the County government for two months. Currently, the County has an unrestricted undesignated fund balance of $17.8 million, which is quite good. After further discussion, it was agreed to move forward with a school bond referendum. CAPE FEAR COMMUNITY COLLEGE NEEDS Budget Director Griffin presented the projected capital expansion plan for Cape Fear Community College for FY 1997-FY 2003 reflecting the tax rate pennies that will be required to support the plan: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 769 (1)Construct a 16,000 square foot maintenance building during FY 1997-98 at an estimated cost of $400,000 to $500,000 representing 1/2 cent on the tax rate. (2)Acquire property for additional campuses during FY 1998-1999 and FY 1999-2001 at an estimated cost of $5 million representing five cents on the tax rate. (3)Expansion of the downtown campus from FY 1997-1998 to FY 2001- 2002 at an estimated cost of $15-16 million representing 15 1/2 cents on the tax rate. The purchases would be equivalent to nine city blocks, and the projected cost could increase due to possible environmental cleanup at two locations. (4)Schedule a $25-30 million bond referendum during FY 2001-2002 or FY 2002-2003. The referendum would provide funds for constructing approximately 200,000 square feet of instructional space at the downtown and/or outlying campuses. (5)When the current construction expansion is completed, current operating costs will increase approximately $643,000 in FY 1998-99 representing seven-tenths of 1 cent on the tax rate. Also, operating expenses will increase annually based upon inflation and additional buildings being constructed or acquired. The following five-year summary of the increase in County contributions to Cape Fear Community College for operating expenses was presented. It was noted that contributions had more than doubled during the five-year period. Contributions to Cape Fear Community College for Operating Expenses FY Amount Increase %Increase FY 1996-97 $2,017,214 $517,214 34% FY 1995-96 $1,500,000 $298,605 25% FY 1994-95 $2,101,395 $198,204 20% FY 1993-94 $1,003,191 $ 50,000 5% FY 1992-93 $ 953,191 County Manager O'Neal commented on the excellent job performed by the Cape Fear Community College Administrative Staff in utilizing their current space and advised this was one reason the County had supported the expansion projects. Discussion was held on the increase in the number of students that attend Cape Fear Community College to receive a GED. Chairman Greer commented on the stigma associated with vocational education, and he stressed the importance of the School System recognizing the need to offer students vocational training. He suggested the possibility of the School System and Cape Fear Community College working jointly to develop a vocational training center that can be used by both institutions. Cape Fear Community College would operate the center, which should assist with removing the stigma from pursuing a vocational trade. Commissioner Birzenieks agreed with Chairman Greer and stated with the Work First Welfare Reform program recently implemented in North Carolina, more jobs will be needed in New Hanover County. He advised that Cape Fear Community College had an excellent record in reviewing the needs of area businesses and developing programs to train people to fill jobs. Commissioner Howell agreed and stated he felt Cape Fear Community College should place more emphasis on vocational NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 770 education, which was a primary focus in the past when the College was a technical institute. County Manager O'Neal commented on State restrictions regarding the number of students that can be accepted for the GED program at community colleges and reported a joint vocational center would probably require a change in the N. C. General Statutes. After further discussion of job preparedness for students who do not want to attend college, the Board agreed to prepare a resolution requesting the Board of Education and Cape Fear Community College Board of Trustees to consider implementing programs to coordinate technical and vocational education. The Legal Department was requested to check into the General Statutes to be sure that school boards and community colleges can offer joint programs. DISCUSSION OF DEBT SERVICE Budget Director Griffin presented a schedule and chart showing the debt service and impact on the property tax rate for a $100 million bond issue. County Manager O'Neal pointed out that each fiscal year a certain amount of dollars must be budgeted for the debt service. Discussion was held on the bond debt now incurred by New Hanover County. Deputy County Manager, Andrew J. Atkinson, reported the County's bond indebtedness was a little high compared to other counties throughout the State; however, on a national level, the County falls within the average range. Budget Director Griffin commented on the two hurricanes and reported the growth in the tax base could be eliminated. She requested the Commissioners to consider this factor when preparing the FY 1997-98 Budget. Chairman Greer asked if the crews in the Tax Department were placing values on homes, and if the County would gain, retain, or suffer a loss on the tax base? County Manager O'Neal responded that crews from the Tax Department were appraising values in the beach communities. He advised that Staff has been directed to take a conservative posture until more information had been gathered by the Tax Department. It appears that 25 to 30 homes cannot be replaced on Figure 8 Island because of water and sewer problems. Discussion was held on the lack of growth in the industrial sector. County Manager O'Neal advised that continued growth in the residential sector in lieu of commercial growth had created increased demands on the infrastructure. Vice-Chairman Caster suggested that Staff prepare another schedule listing each bond issue individually showing the years of repayment, the highest and lowest periods of debt service, and the decreases and increases in tax pennies needed to pay the debt service. Discussion was held on the New Hanover County tax rate. Commissioner Howell reminded the Board that North Carolina has one of the lowest tax rates in the country. He stated New Hanover County ranks among the top ten counties in population and has one of the lowest tax rates in the State. He emphasized the importance of everyone understanding there is no free lunch. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 771 After further discussion, the Board agreed to request Staff to prepare a list of each individual bond issue showing the years of repayment, the highest and lowest period of debt service, and the annual impact on the tax rate. PRESENTATION ON GROWTH, DEVELOPMENT AND PLANNING Planning Director Hayes presented figures on the population growth in New Hanover County and stated the County must decide on how to pay for this success. The population is estimated at 144,000, which has placed a huge burden on the County in meeting infrastructure needs. Tables and charts of subdivision activity from 1981-1996 were presented. In 1996, more final plat lots were approved and recorded even though two hurricanes were experienced in the area. The activity is moving forward and the figures do not indicate that construction will slow down. In 1996, the County signed off on 5,060 preliminary lots which may or may not be developed within the next year. The County has an opportunity to require certain levels of drainage, water and sewer, and recreational services in these new subdivisions. Standards and regulations addressing the infrastructure needs should be required in the preliminary approval of property. In the past, no infrastructure requirements were in place for new development. The lack of infrastructure regulations has created the problems being experienced with water, sewer, and drainage. A lengthy discussion followed on the need to place a time frame on when construction should begin on preliminary approved subdivisions. Currently, there are approved subdivisions with little or no construction activity for the past five or six years. This allows the property to be developed under the old standards. Planning Director Hayes recommended amending the Subdivision Ordinance to clearly state that if activity ceases at any time for a period of two years, the project will have to be re-approved. After further discussion, the Board agreed that the Subdivision Ordinance should be amended to place a time restriction on preliminary lot approvals. Discussion was held on affordable housing. Commissioner Howell reported affordable housing was a thing of the past in New Hanover County because of the cost of land. He advised that many people were moving to Pender and Brunswick counties to construct homes because they were cheaper. Further discussion was held on the lack of land in New Hanover County. Planning Director Hayes reported more requests will be received for high density projects; therefore, the Board will have to decide on what type of density development should occur. The location for high density projects will be essential because this will determine if the project has coordinated water and sewer services, roads, and schools. In order to control these projects, a design criteria will have to be established and the Board will have to control the number of high density projects. Commissioner Davis asked how this type of growth can be managed? Planning Director Hayes responded that continued growth was fine, but it should be related to the services in place. He referenced the report prepared by the Ad Hoc Urban Planning and Growth Committee, which states that the premises of good planning is contingent upon sufficient infrastructure and public facilities being in place to serve the proposed development. Discussion was held on the tremendous amount of commercial development and big box retail centers being opened within the next NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 772 eighteen months. An Office Depot and Target store are under construction, with each structure containing 300,000 square feet of retail space. Planning Director Hayes reported with continued growth in both the residential and commercial sector, the County has not been able to provide the necessary infrastructure. As the County continues to develop with higher density and an increased demand for services, the Board will have to decide on the type of services to provide. He stated these services cannot be provided at one time; however, services can be prioritized over a five to ten year period with future development occurring as these services are in place. A lengthy discussion was held on acceptance of roads by the North Carolina Department of Transportation (NCDOT). Commissioner Howell stressed the importance of working with NCDOT to identify the future location of major corridors so developers will know how to plan for these roads in future building projects. He commented on the cost of land in New Hanover County and inquired as to whether the County could become involved with purchasing future rights-of-way with the State reimbursing the County at a later date. Further discussion was held on the importance of road stubs when designing subdivisions. Commissioner Howell stated a developer should be required to include road stubs in the preliminary plan for a subdivision and stated these stubs should be accepted by the NCDOT. After further discussion, the Board agreed to seek legislation to allow the County to acquire rights-of-way with reimbursement from the State, seek legislation for acceptance of road stubs, and require developers to use road stubs when submitting preliminary plans for subdivisions. In closing, it was generally concluded that basic infrastructure needs should be in place as development occurs in an area. DISCUSSION OF SEWER CAPACITY AND WATER USE County Engineer, Wyatt Blanchard, presented a map showing the location of water and sewer systems owned by New Hanover County. He advised that extending water and sewer lines to an existing subdivision was much more costly than installing dry lines during construction. Discussion was held on the infiltration problems that occur in the sewer lines. Chairman Greer expressed concern for not knowing where infiltration problems exist and asked why the District was not using plugs and blowing smoke into the lines to identify the problem areas? County Engineer Blanchard responded that this type of testing was used to identify inflow problems, not infiltration problems. County Engineer Blanchard presented the following reports on water and sewer capacity: WASTEWATER TREATMENT PLANTS Southside Wastewater Treatment Plant Allocations Design Flow 12 MGD City 5.25 MGD County 5.25 MGD Wrightsville Beach 1.5 MGD Current Average Estimated Utilized Flow as of 1/1/97 NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 773 Utilized Flow Available Flow City 3.0 MGD 2.25 MGD County 4.3 MGD 0.95 MGD Wrightsville Beach 0.68 MGD 0.82 MGD Inflow/Infiltration 1.42 MGD Total 9.40 MGD 2.6 MGD The average flow presently going into the Southside Wastewater Treatment Plant is 9.4 MGD. Based on 360 GPD per residential unit and a total remaining capacity, 2.6 MGD would accommodate 7,222 units. Based on 360 GPD per residential unit, 0.95 MGD of County capacity would accommodate 2,638 units which is enough capacity for approximately 17 months using recent growth figures. Presently, approximately 60,000 residential units exist in the entire County. At a 7.5% growth for 18 months, approximately 4,575 units will be added. Approximately 2/3 of these units will be permitted in the Southside Wastewater Treatment Plant service area. A significant, but undetermined number of permitted units have not been constructed, which will relieve building pressures. Northside Wastewater Treatment Plant Capacity 8 MGD Utilized Flow Available Flow City &NHC 5.5 MGD 2.5 MGD 2.5 MGD will yield 6,944 units based on 360 gal/unit. COUNTY OWNED & OPERATED TREATMENT PLANTS Monterey Heights WWTP : Capacity 0.05 MGD Utilized Flow Available Flow 0.05 MGD 0.0 Walnut Hills WWTP: Capacity 0.10 MGD Utilized Flow Available Flow 0.10 MGD 0.0 Churchill Estates WWTP: Capacity 0.042 MGD Utilized Flow Available Flow 0.042 MGD 0.0 NorthChase WWTP : Capacity 0.20 MGD NPDES Permit 1.0 MGD Utilized Flow Available Flow 0.16 0.0 Vision Software WWTP : Capacity 0.040 MGD Utilized Flow Available Flow 600 GPD 39,400 GPD NEW HANOVER COUNTY WATER SYSTEMS 421 Water System Water Source - 3 wells Tank - 10,000 gallons elevated Available Capacity - Limited Airport Water System Water Source - City of Wilmington Tank - City Elevated Tank Available Capacity - As needed Monterey Heights Water System Water Source - 2 wells Tanks - 2 Hydropneumatic Available Capacity - None NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 774 Walnut Hills Water System Water Source - 2 wells Tanks - 2 Hydropneumatic Available Capacity - None Apple Valley Water System Water Source - 2 Wells Tanks - 2 Hydropneumatic Available Capacity - 130 houses Runnymeade Water system Water Source - 2 wells Tank - 2 Hydropneumatic Available Capacity - None Murrayville System (Including NorthChase) Water Source - 7 wells Tank - 2 elevated - 850,000 gallons Available Capacity - 100,000 gallons West Bay Water System Water Source - 2 wells Tank - 2 Hydropneumatic Available Capacity - None County Haven Water System Water Source - 2 wells Tank - 2 Hydropneumatic Available Capacity - None Prince George Water Systems Water Source - 2 wells Tank - 2 Hydropneumatic Available Capacity - None Status of Water and Sewer District Projects Northside Wastewater Treatment Plant On Hold Ogden Interceptor Design Northside Interceptor Selection of Engineers Motts Creek River Road Interceptor Final Design Hidden Lakes Mobile Home Park Under construction Brandywine ExtensionDesign by Staff Horndale Drive ExtensionDesign by Staff Timber Creek Force MainDesign by Staff Kirkland Sewer ExtensionUnder Construction Wrightsboro Water System Design East Side Airport Water ExtensionDesign by Staff A lengthy discussion was held on the additional sewer capacity that will be received by the County with the joint City/County construction of the Northside Wastewater Treatment Plant. County Manager O'Neal reported with continued growth, completion of this plant will provide adequate sewer capacity for two years before an expansion will be needed at Southside Wastewater Treatment Plant. Discussion was held on the need to review increasing water and sewer hook-up fees and the monthly impact fee for water. Finance Director, Bruce Shell, reported impact fees were placed in an escrow account to be used for construction of future water and sewer projects. The $7 million accumulated for the Northside Wastewater Treatment Plant was collected from impact fees. After discussion, the Board agreed to request Staff to prepare a recommendation for increasing the monthly impact fee for water and review the current water and sewer hook-up fees being charged. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 775 DISCUSSION OF DRAINAGE Assistant County Manager, Dave Weaver, presented a chart explaining the rate and volume of water discharge; the definition of a storm as to frequency and interval, and the difference between retention and detention. A chart was presented showing the volume of water discharge on a developed site compared to a natural site. Discussion was held on the frequency of storm intervals over 10 years, 25 years, and 100 years. Assistant County Manager Weaver explained that the possibility of a severe storm occurring during ten years was much less than over 25 or 100 years. He advised there are conflicting goals in controlling drainage, whether to remove water from the site or retain water on the site. In order to avoid pollutant loading, the first inch of stormwater runoff must be controlled. The Planning Board developed revisions to the drainage regulations to require retention sufficient to control the first one inch of stormwater runoff with the use of on-site drainage systems based upon a 25-year storm event runoff from all impervious surfaces by percolation into the soil, evaporation, transpiration, or other methods of treatment acceptable to the County Engineering Department. Discharge of runoff from impervious surfaces into natural water bodies would be prohibited, and the discharge rate would be based upon a 25-year storm with the volume discharge rate based upon a 10-year storm. Discussion followed on the use and maintenance of retention ponds. Chairman Greer commented on retention ponds becoming contaminated with the water running back into the groundwater and asked if this method was really beneficial? Assistant County Manager Weaver responded when water runs into the ground from a retention pond, phosphate is stopped by soil particles and the nitrates slowly drain into a ditch which does not create the growth of alga. Commissioner Birzenieks asked if controlling the first inch of stormwater runoff would prevent pollutants from going to other properties. Assistant County Manager Weaver responded retention of the first inch of stormwater was critical in preventing pollutants from going into the ground and onto other properties. He advised the best method of retaining the first inch of stormwater runoff was through vegetated swales or retention ponds. Discussion followed on the number of required parking spaces for commercial development. Vice-Chairman Caster expressed concern for the number of parking spaces required for the square footage of a commercial building and recommended a review of the parking requirements in the Zoning Ordinance. Discussion was held on developing a drainage plan for New Hanover County and funding options for design, construction and operation of a managed stormwater system. Assistant County Manager Weaver presented the following funding options: Create a County Drainage District Watershed-by-Watershed 1.Develop a drainage plan for each watershed through establishment of an advisory board. 2.Establish a 5-cent tax rate for the first year, if necessary, to help fund the initial work in the watershed. 3.After the first year, establish a tax rate of 1 to 2 cents for maintenance and debt service in the watershed. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 776 4.Charge an impact fee for new development in the watershed. Create County-wide Utility Department Funded by a Drainage District 1.The County utility would perform planning, facility development, and maintenance. 2.The County utility would establish and collect impact fees through the building permit process. The Board would have to decide whether to charge a drainage fee or drainage tax. The following pros and cons were presented for each payment option: Utility Fee Tax Non-deductible for tax purposes Deductible Difficult to collect and administer Relatively easy unless tied to another utility bill to collect and (e.g. water, sewer, or trash) administer Chairman Greer spoke in opposition of hiring a firm at this time to develop a County drainage plan because funding resources were not available. He commented on other County needs, such as expanding the water and sewer, and recommended approaching this problem with one watershed at a time. Commissioner Davis agreed and stated the County has other needs that must be met. Commissioner Howell commented on drainage problems occurring during bad storms and stated, in his opinion, some flooding will always occur because of soils and the high water table in New Hanover County. He recommended developing a plan to identify areas experiencing flooding and septic tank failures with money being spent to expand the sewer system and clean out and maintain ditches in lieu of a costly county-wide drainage plan. Consensus: After a lengthy discussion on developing a drainage plan, it was the consensus of the Board to schedule a Work Session to discuss drainage regulations and other alternatives. MEETING CONVENED FROM REGULAR SESSION UNTIL FEBRUARY 17, 1997 Chairman Greer convened the meeting from Regular Session at 6:00 P.M. Chairman Greer reconvened the meeting to Regular Session on Saturday, February 17, 1996, 8:30 A.M. Members present were: Commissioners Buzz Birzenieks; Ted Davis, Jr.; Charles R. Howell; Vice-Chairman William A. Caster; Chairman Robert G. Greer; County Manager, Allen O'Neal; Assistant County Attorney, Kemp Burpeau; and Clerk to the Board, Lucie F. Harrell. PRESENTATION OF CAPITAL IMPROVEMENT PROGRAM Budget Director Griffin commented on the need to establish a Capital Improvement Program to meet the County's capital projects and infrastructure needs in a well-planned manner. The financial impacts on the budget could then be anticipated and financial options planned. In the past, funds budgeted for capital projects were the first to be reduced during the budget balancing process. One primary factor to take into consideration is that completion of new capital projects will increase the County's operating budget because each project requires its own operating budget as well as support from administrative and maintenance departments that eventually increase the County's support staff. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 777 A list of requested capital projects for FY 1997-98 was presented with a total requests of $174 million. PRESENTATION ON SPACE NEEDS County Manager O'Neal presented the following space needs: Judicial Building (1)The District Attorney is converting copy rooms into office space for the new Assistant District Attorneys. Also, funding is expected within the next six months for five additional employees. If a grant is awarded to set up a domestic violence unit, an additional three positions will be added. The County is responsible for providing space for the judicial process and there is no space left in the Judicial Building. (2)The Clerk of Court is out of space. During the past year, Staff has worked with the Clerk of Court to establish efficient office layouts, which no longer address the space needs. (3)The temporary holding cell has no bathroom facilities which has created problems for the bailiffs, property management, and the courts. Sheriff/Law Enforcement Center (1)A separate facility is needed for female prisoners. This would increase the number of jail cells for male prisoners by 16-20 cells. (2)The Patrol Division is housed at the Airport, but the Sheriff would rather have this division in the downtown area. (3)The Vice Unit is located in the Judicial Building. If this unit was relocated, space would be available for the District Attorney and Clerk of Court. (4)The Sheriff has converted storage rooms into offices. Officers must leave at the end of shifts to provide space for the officers coming on duty. Law Library (Judicial Building) (1)The judges and lawyers are opposed to relocating the Law Library from the Judicial Building. (2)With automation, the space needed for operation of the Law Library could be reduced by approximately 40%. Board of Elections Figures were presented on the 80% increase in voter registration during the past ten years. The Board of Elections has run out of space. A lengthy discussion was held on finding space in the downtown area with the possible use of old and vacant buildings. Commissioner Birzenieks recommended developing a current Master Space Plan so many of these needs can be addressed. DISCUSSION OF AD VALOREM TAX Budget Director Griffin reported the ad valorem tax was a tax on real property and vehicles based on the value of property as a marketable item. Real property includes land, buildings, and items permanently affixed to the land or buildings. The market value of the land is established by a County appraisal. State law requires revaluation of property every eight years; NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 778 however, the County elected to conduct appraisals every six years. More frequent valuations help to provide the needed resources to meet service and infrastructure demands in a fast growth area. Because of Hurricanes Bertha and Fran, difficulty has been experienced in establishing and supporting property values. This resulted in postponing the revaluation scheduled for 1997. The 1999 appraisal will meet the State requirement, but cannot be postponed. Due to storm damage, the Tax Administrator is assuming there will be no increase in the tax base. It is expected that the storm damage decrease will be offset by normal growth. More definite information will be available prior to the meeting of the Board of Equalization and Review in late April. The lack of growth in the tax base creates an estimated loss of $2,275,560 in ad valorem taxes for FY 1997-98. The estimated loss is based on an average of 5% growth per year over the past five years with no increase in the tax rate. It would be necessary to raise taxes 2.6 cents to generate this revenue using the current tax base. Ad valorem taxes are 52% of the general fund revenue. DISCUSSION OF USER FEES Budget Director Griffin reported user fees are charged to those who benefit from government services or use government facilities. Public fees differ from private sector fees in that the full cost of service is not always covered, nor are services always voluntarily consumed. User fees are not a large producer of revenue. Many services provided by the County have a public benefit that either cannot be tied to individual users, or the users cannot pay for the service. The following County Departments charge fees for public services: Tax Department: Municipalities are charged for collection of ad valorem and room occupancy taxes. The FY 1996-97 budgeted amount for services is $395,000. Board of Elections: The department charges to conduct elections for municipalities, if the County is having an election at the same time. Register of Deeds: This office charges for many of its services. The fees and tax on real property transfers are greater than the department's expenditures. In most cases, the fees are set by the State. The FY 1996-97 budgeted amount for services is $1,846,320. Sheriff's Department: This department charges a number of fees for services provided, most of which are regulated by the State. The FY 1996-97 budgeted amount for services is $1,150,738. Emergency Medical Services: This department charges for medical services and transportation of individuals by ambulance. A decision was made that the fees should not be set high enough to cover the entire cost of the service. The FY 1996-97 budgeted amount for services is $997,000. These fees are difficult to collect. Inspections Department: This department charges for all services rendered. The fees cover the full cost of the department's operation. The FY 1996-97 budgeted amount for services is $2,507,054. Planning Department: This department charges for processing NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 779 applications. The FY 1996-97 budgeted amount for services is $15,000. Health Department: This department charges for services on the ability of patients to pay with fees differing among the following programs: Environmental Health $236,000 Animal Control $307,850 Laboratory $ 3,000 Epidemiology $ 49,000 TB Health $ 12,000 Personal Health $ 5,000 Family Planning $ 65,423 Jail Health $ 3,000 Department of Social Services: This department charges clients who are not eligible for Aid to Families with Dependent Children for child support enforcement. A minimal fee is also charged when a non-county resident is placed in a DSS Receiving Home. Discussion was held on the mandated programs for Social Services. Staff was requested to provide information on the mandated federal programs. Department of Aging: This department is limited in charging fees for programs where Older American Act funding is used. The department does solicit donations for most programs. The FY 1996- 97 budgeted amount is $21,000. Human Services Transportation System: This department charges a fee for transportation. The FY 1996-97 budgeted amount for services is $13,000. New Hanover County Library: This department charges out-of-county residents for library cards, replacement fees for lost cards, and overdue charges on books and videos. The FY 1996-97 budgeted amount for services is $120,000. The Cape Fear Museum: This department charges an entrance fee as well as fees for special programs and camps. The FY 1996-97 budgeted amount for services is $30,000. Commissioner Birzenieks inquired as to whether the County lost revenue on the emergency medical services, and if so, had consideration been given to transferring this service to the New Hanover Regional Medical Center? Budget Director Griffin responded the annual cost of the service was approximately $2 million with fees collected in the amount of $997,000. County Manager O'Neal informed the Board that consideration had been given to transferring the emergency medical services to the hospital, which in his opinion, was an option to explore. Commissioner Birzenieks agreed. Deputy County Manager, Andrew J. Atkinson, advised that discussion had been held in the past with the Medical Center and the hospital requested reimbursement for indigent patients. Discussion was held on the fees charged for the ambulance service. Commissioner Davis asked if the hospital could raise the fee if the service was transferred? Deputy County Manager Atkinson responded the hospital could increase the fee and stated, in his opinion, it would be an advantage to the County for the Medical Center to bill for the service. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 780 Further discussion was held on the services provided by Medical Transportation Specialists, Inc. Deputy County Manager Atkinson advised this company had a five-year franchise with the County to provide ambulance services for non-emergency calls. He reported the service was provided with the County subsidizing indigent costs. Chairman Greer recommended reviewing the franchise with Medical Transportation Specialists, Inc. when it expires. After further discussion, the Board agreed to review transferring Emergency Medical Services to New Hanover Regional Medical Center, and review the franchise with Medical Transportation Specialists, Inc. for the provision of non-emergency ambulance service when the agreement expires. Vice-Chairman Caster expressed concern for the 911 Surcharge being applied to more than one business phone. He recommended checking into the enabling legislation to see if this procedure can be changed. After discussion, the Board agreed to review the manner in which the 911 Surcharge is applied to business phones. DISCUSSION OF IMPACT FEES Assistant County Manager Weaver presented a future Capital Needs Assessments Study for New Hanover County Parks. According to the study, the amount of park land is acceptable, but there is a lack of park facilities and open green space. In order to provide these needs, the County should consider establishing a park impact fee. Discussion was held on establishing a school impact fee. County Manager O'Neal reported that Orange County had a school impact fee; however, North Carolina requires that specific enabling legislation be adopted before fees can be levied for school construction. The legislation adopted by Orange County contained the following stipulations: (1)The calculation of fees must be in proportion to the public facility needed because of new development. (2)There must be an accountability of fees collected. (3)Revenue must be expended by a certain deadline to benefit the development project for which it was collected. After discussion, the Board agreed to consider implementing a park impact fee. Drinking Water Impact Fee : Assistant County Manager Weaver reported a drinking water impact fee will be presented on the next agenda for the Board of County Commissioners. Land Transfer Tax: Legislation is already in place for New Hanover County to charge a land transfer tax. Discussion was held on the different revenue sources presented. Commissioner Birzenieks requested the County Manager to choose which revenue option he would use. County Manager O'Neal advised that he would select the land transfer tax because other coastal counties, such as Dare County, had implemented a land transfer tax that had produced a sizeable amount of revenue without experiencing a decrease in growth. After further discussion, the Board agreed to review the options for implementing a land transfer fee. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 781 DISCUSSION OF COUNTY SOLID WASTE COLLECTION SYSTEM Assistant County Manager Weaver reported the establishment of a solid waste collection system would eliminate the need to transfer $3 million from the general fund to the Environmental Management fund. Staff is convinced that a mandatory trash collection system would eliminate illegal dumping and provide for a full range of collection services at economical collection rates. Currently, a tip fee of $50 per ton is needed to allow WASTEC to break even with its costs. If the current $32 tip fee was increased to $50 without a mandatory trash collection system in place, haulers would carry the trash out of New Hanover County. Implementation of a mandatory trash system would incorporate the true disposal cost into a collection with people paying for the generation of trash in lieu of the County subsidizing the disposal cost. Discussion was held on the cost of residential collection per household. Assistant County Manager Weaver responded the resident should receive additional services at the same rate being paid to private haulers. Chairman Greer spoke in opposition to establishing a mandatory trash collection system to provide revenue for the incinerator. He advised that burning trash instead of using a landfill was twice as costly. As the incinerator ages, large expensive pieces of equipment will have to be purchased and more stringent, costly environmental regulations will be enacted by the federal government. He requested the Board to consider the possibility of closing the incinerator and charging $35 per ton to haul trash to the landfill in Sampson County. Commissioner Birzenieks stated from a economical point of view, the WASTEC Facility should be closed. He asked if consideration had been given to mothball the facility for future use? County Manager O'Neal stated this procedure could be done; however, it would be too costly to reopen the facility. County Manager O'Neal stressed the importance of everyone understanding that New Hanover County was in control of its density with waste disposal because of the incinerator. He stated if trash was hauled to the landfill in Sampson County and this landfill ran out of space in the future, what would happen to the County? Chairman Greer stated this item could be discussed all afternoon and announced the agenda had been completed. He asked if any member of the Board would like to present an additional item. Commissioner Birzenieks commented on the importance of having satisfied County employees and recommended conducting an Employee Climate Survey. After discussion of the need to perform this type of survey, it was agreed to request Staff to research this matter. Vice-Chairman Caster spoke in opposition to adding additional services and programs each budget year. He requested Staff to provide a list of existing services and programs being administered by the County that are not required under State Statutes with a copy of the budgets for the past two years. County Manager O'Neal responded that he would be glad to provide a list as requested. Discussion was held on the number of items that need to be addressed and the Board agreed to schedule a budget Work Session within the next two weeks. Chairman Greer recapped the following items for Staff to pursue: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25 BUDGET PLANNING RETREAT, JANUARY 17-18, 1997PAGE 782 (1)Promote a local school bond issue. (2)Request staff to prepare a list of each individual bond issue showing the years of repayment, the highest and lowest period of debt service, and the decreases and increases in tax pennies needed to pay the debt service. (3)Prepare a resolution requesting Cape Fear Community College and the New Hanover County School System to work jointly to provide technical and vocational education, including co- location of the facilities. Direct the Legal Department to check into the State Statutes governing the joint development of programs between the two entities. (4)Amend the Subdivision Ordinance to place a time limit on preliminary lot approvals. (5)Increase the monthly impact fee for water. (6)Review water and sewer hook-up charges. (7)Seek enabling legislation for the County to purchase rights- of-way with reimbursement from the State and request NCDOT to accept road stubs in subdivisions. (8)Schedule a Work Session to discuss drainage. (9)Establish a Parks Fee. (10)Review enabling legislation on the 911 Surcharge regarding the application of the fee on business phones. (11)Review options for implementing a land transfer tax. (12)Research transferring Emergency Medical Services to New Hanover Regional Medical Center. (13)Request staff to prepare a recommendation for performing an employee Climate Survey out-of-house. (14)List of services that do not have to be provided by the County, such as the Museum, Library, Human Services Transportation Services, Department of Aging, etc. with a report on the budgets of these departments for the last two years. (15) Review federal mandates for Social Services (16)Review a County-wide solid waste collection system. (17)Review parking regulations on the number of parking spaces required for commercial businesses. (18)Review the pros and cons of charging a fee or tax for implementing a drainage program and/or watershed plan. ADJOURNMENT Chairman Greer adjourned the meeting at 4:10 P.M. Respectfully submitted, Lucie F. Harrell Clerk to the Board