2005-04-28 Budget Work Session
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
BUDGET WORK SESSION, APRIL 28, 2005
BOOK 30
PAGE 297
ASSEMBLY
The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, April 28, 2005, at
2:05 p.rn. in Room 501 at the Administration Building, 320 Chestnut Street, Wilmington, North Carolina.
Members present were: Vice-Chairman William A. Caster; Commissioner Ted Davis, Jr.; Commissioner William
A. Kopp, Jr.; Commissioner Nancy H. Pritchett; County Manager Allen O'Neal; County Attorney Wanda M. Copley; and
Clerk to the Board Sheila 1. Schult.
Chairman Robert G. Greer was absent.
Others present were: Budget Director Cam Griffin; Budget Analyst Donna Seal; Finance Director Bruce Shell;
Assistant County Manager Patricia A. Melvin; Assistant County Manager Dave Weaver; and Sheriff Sidney A. Causey.
Vice-Chairman Caster called the meeting to order and requested County Manager Allen 0 'Neal to make the budget
presentation for FY 2005-2006.
PRESENTATION AND DISCUSSION OF THE FY 2005-2006 BUDGET
County Manager Allen 0 'Neal stated that this budget has been prepared with no tax increase but cautioned that if
the school and community college bond referendums are approved in May, then a tax increase will be needed to pay back the
bond indebtedness. In the recommended budget, the revenue projections are conservative and expenditures are realistic.
Budget Director Griffin began the presentation by informing the Board that based on discussion from the April 14,
2005 work session; changes/additions in the basic information on the current state of the budget are underlined below:
REVENUE:
Ad Valorem Tax - The tax base growth between FY 04-05 and FY 05-06 is expected to be 3.7 percent. The ad
valorem tax base is estimated to be $18.5 billion. Based on this estimate, each penny ofthe tax rate will be worth
$1.8 million.
Transfer in from Capital Projects - An amount of $4.8 million is recommended to be transferred in from capital
projects and will be used to fund a portion of the FY 05-06 debt service.
Sales Tax - As stated in the memo of November 15,2004: sales tax, especially Article 39, is expected to exceed
the amount budgeted in FY 04-05. Article 39 sales tax is allocated based on the point of origin.
. Article 39 - at this time a $2.9 million increase over FY 03-04 actual receipts in the locally generated one-
cent sales tax is projected.
. Article 40 and 42 - at this time a three percent growth in the one-half cent sales taxes from FY 04-05
adopted budget is proiected.
. Article 44 -at this time a three percent growth from the FY 04-05 estimated amount is proiected, (this sales
tax was implemented in July 2003).
Municipal Tax Collection Fees - The proposed rate charged to collect municipal taxes has been decreased from 2
percent to 1.75 percent. This reduces the proiected revenue the County will receive for providing this service by
$105,000.
Fund Balance - It is recommended that a fund balance of $5.1 million be appropriated to balance the FY 05-06
budget. Of this amount. the Commissioners approved $2.1 million for school improvements. The appropriation of
fund balance at this level will not jeopardize the strong financial position ofthe County. Umeserved/undesignated
fund balance grew by $4.4 million between FY 03-04 and FY 04-05. Preliminary projections for FY 04-05
indicate a reduction in fund balance of $2 million. The County will continue to maintain a strong fund balance as
well as its strong bond rating.
EXPENDITURES:
New Hanover County Schools - The preliminary amount recommended for the Schools in FY 05-06 is an increase
of $2.6 million in operating and $1 million in capital outlay for a total increase of $3.6 million. Fund balance of
$800,000 is recommended for appropriation in Fund 125 in FY 05-06. The Board of Education requested an
increase of $5.6 million or 11.2 percent in operating expenses. A $7.2 million request was made for funding the
Schools' capital outlay for FY 05-06. This is an increase of$4.2 million over the FY 04-05 adopted amount for
capital.
Cape F ear Community College - Funding of $5.7 million is recommended for Cape F ear Community College. This
is an increase of $940,000.
The amount recommended for education (including the $2.1 million transfer for school improvements) is 33
percent of General Fund expenditures.
Department of Social Services - An increase of $1.6 million in County funds is recommended for the Department of
Social Services due to projected increases in Medicaid and adoption assistance subsidy. The County cost of
Medicaid is proiected to increase $1.1 million or 14.1 percent from FY 04-05. Based on expenditures-to-date in
FY 04-05, we are recommending slightly less than the state estimate.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
BUDGET WORK SESSION, APRIL 28, 2005
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PAGE 298
Southeastern Center for Mental Health - Funding of $1.6 million remains constant for Southeastern Center for
Mental Health, Developmental Disabilities and Substance Abuse Services.
Sheriff's Office - An increase of $3.4 million in County funding is recommended for the Sheriff's Office. The
increase includes the full-year funding of37 positions added for the Detention Center in FY 04-05 - $1.6 million,
16 positions added for the Detention Center inFY 05-06 - $600,000, and funding for the Gang TaskForce, which
includes two positions - $91,319. Also included are increases in health insurance and merit and market
adjustments.
Public Safety Communications Center - An amount of $1.3 million is included for improvements to the Public
Safety Communications Center as part of the move to their new location. Wireline and Wireless funds will be used
to offset eligible costs.
Board of Elections - There is an increase in Elections budget of $248,209 because of the potential for five elections
being held in FY 05-06. Revenue will offset the cost ifthe municipal elections are held without County elections.
The North Carolina General Assembly is still considering what type of voting equipment will be allowable in the
future. According to the State Board of Elections, there may be some state funding available to help with the
purchase of equipment. Adiustments may need to be made in the County Board of Elections budget during FY 05-
06 when more information is available.
Information Technology - A PC replacement program is recommended. This will provide for a more standardized
PC program and will aid in installation, maintenance and repair. Computers will be replaced on a three to four year
cycle. The program will also reduce the per-unit cost through volume discounts. The goal of this program is to
replace all obsolete PC equipment.
Funds in the amount of$ll 0,000 are included to begin the replacement ofthe County telephone systern. The total
cost of the new system is estimated to be $1 million. The savings realized on recurring costs of operating a new
integrated system would repay the cost of implementation within five years. The system will provide for uniformity
in County telephones and allow for such advanced features as unified messaging and automated call distribution
features that are currently unavailable or only available to a select few departments. The purchase will coincide
with the move of the remaining employees from the County Administration Building. The County has been notified
that timely repair will no longer be guaranteed on some of its older phone systems.
All departmental phone costs are included in the Information Technology budget in FY 05-06 for more efficient bill
processmg.
Juvenile Day Treatment Center - County funding in the Juvenile Day Treatment Center will increase $173,000; this
is a result of state funding being phased out. Three positions are being eliminated, but funding cannot be reduced
further if the Center is to operate in a safe and efficient manner.
WAVE - Funding in the amount of$149,964 for the contribution for WAVE transportation has been moved to the
Non-Departmental section of the budget.
Parks - Funds are included for a walking trail at Hugh MacRae Park in the amount of$150,000. Park's capital
expenditures will be eligible for matching funds at a fifty-percent return. Included in an administrative reserve
account in the Non-Departmental division ofthe budget is $500,000 to begin implementation ofthe Park's Master
Plan (following the adoption of the Master Plan).
Museum - Funds in the amount of $150,000 are included to implement part ofthe Museum's Master Plan. This
will include moving the gift shop and creating a new entrance to first floor exhibits.
Property Management - Funds are included to replace windows and the HV AC system at the Historic Courthouse
and automate several HV AC systems. Funds are also included for a generator at the Judicial Annex to keep lift
pumps and security cameras activated during power outages. Also included are funds to expand the parking lot at
the Northeast Branch Library.
Tax - Funds are included to begin the revaluation process.
Fire Services - The Fire Service District budget is balanced with the current tax rate. The ad valorem tax base in
the Fire Service District is estimated to be $7 billion. Based on this estimate, each penny of the tax rate will be
worth $684,000.
Environmental Management - The Environmental Management Fund is balanced with the current tipping fee.
Partial funding for construction of Cell 6C was approved in FY 04-05, with the remainder of $600,000 being
recommended for FY 05-06.
Water and Sewer District - The Water and Sewer District is balanced by budgeting approximately $1 million of
Water and Sewer fund balance.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
BUDGET WORK SESSION, APRIL 28, 2005
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Non-County Agencies - Funding at the FY 04-05 adopted amounts, with a few changes, will be included for Non-
County agencies. Funding applications for FY 05-06 were not sent to Non-County agencies (nor in FY 04-05), as
funding is limited.
. Funds currently budgeted and undistributed in FY 04-05 for General Electric and Verizon will be carried
over to FY 05-06. No additional funds for these companies were budgeted in FY 05-06.
. An increase in the amount of $14,500 is recommended for the New Hanover Soil and Water Conservation
District to fund a portion of a position that was previously federally funded.
. A $5,000 increase is recommended for the Carousel Center.
. Coastal Horizons has requested an additional $98,067 for FY 05-06; the FY 04-05 amount of$44, 133 is
recommended. In addition to funding, DSS and Southeastern Center also contract with Coastal Horizons
for services and the County provides meeting space for the agency. Southeastern Center contracts with
Coastal Horizons for over $1 million in services and DSS contracts for $100,000 on an annual basis.
Capital Improvement Program - Capital requests for FY 05-06 were all valuable projects, though no funding is
recommended because of budgetary constraints.
Employees -There is a significant increase projected in the cost of health insurance for County employees;
negotiations are ongoing concerning the contract for health insurance. There is a slight increase in dental insurance,
which will be absorbed in the existing budget. An amount of$165,000 is included for a wellness program for
County employees, the program is recommended to help reduce the cost of medical insurance. There is funding
included for a 2 percent market increase and 2 percent merit increase for deserving employees.
There are 42 new positions recommended for FY 05-06. Ofthese positions 38 are recommended in the General
Fund.
The General Fund positions are as follows:
. One additional Administrative Support Assistant is recommended to support the efficient operation of the
Engineering department.
. One additional Fiscal Support Technician is recommended in the Legal Department to improve the collection
efforts of the County. No County funds are required for this position; the additional revenue collected will
offset the cost.
. Two positions are recommended for the Library to provide automation support.
. Eight additional positions are recommended for Inspections due to increased building activity in the County;
these positions will be funded by revenue from inspection fees.
. Sixteen additional positions are recommended for the Detention Center to support efficient operations.
. Two positions are recommended for the Gang Task Force - there is an offset of$52,000 in funding from the
Schools for these positions.
. Three additional Economic Case Workers are recommended in DSS to assist with the increasing caseload of
the department. These positions will receive 50 percent of their funding from federal funds.
. One additional Pretrial Release Coordinator is recommended to help reduce the inmate population at the new
Detention Center.
. One additional Custodian is recommended for Property Management to assist with maintenance of County
facilities.
. One Telecommunicator for Public Safety Communication is recommended to meet critical service needs.
. Two Parks positions are recommended to keep the increasing acreage in the County park system up to
standards and support efficient operations of the Parks Department.
The Water and Sewer Fund positions are as follows:
. Three positions are recommended in the Water and Sewer District to meet critical service needs. Five Fiscal
Support positions were approved by the Commissioners April 18, 2005, and are included.
The Fire Services District Fund positions are as follows:
. One Administrative Support Specialist is recommended in Fire Services to assist with the efficient operation of
the department.
GENERAL BUDGET INFORMATION:
. Increase to Port, Waterway and Beach Commission in the amount of $2,000.
. Increase to Soil and Water Conservation District to replace federally funded positions in the amount of $14,500.
. An increase in funding of $5,000 is recommended for The Carousel Center.
. Funds are not budgeted for General Electric in the amount of $250,000; Verizon in the amount of $215,000 in
unspent funds will be carried over from FY 04-05.
. Funds will be consolidated in Information Technology for phones, leading to greater efficiency.
. Funds in the amount of $1 09,876 are included for debt service on a new $1 million phone systern.
. A program to consolidate the replacement of computers is included. This will lead to greater consistency in
computers, better price per unit, and will take a comprehensive approach to computer management in the amount of
$300,000.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS
BUDGET WORK SESSION, APRIL 28, 2005
BOOK 30
PAGE 300
. County funding has increased in the Juvenile Day Treatment Center program due to loss of a grant in the amount of
$173,000.
. Funds are included to expand the parking lot at the NE Branch Library in the amount of $1 00,000.
. Funds are included for a water-monitoring contract with UNCW in the amount of $60,000.
. Funds in the amount of $5,000 are included for the Watershed Management Advisory Board (this board replaced
the Tidal Creeks Watershed Management Advisory Board).
. Contribution to WAVE in the amount of$149,964 is budgeted in non-departmental.
. The funding arrangement with the Airlie Foundation is recommended to change. In FY 04-05 the Foundation
funded one Administrative Support Technician and one Environmental Educator position. In FY 05-06, the Airlie
Foundation will fund the temporary Ticket Agents and the Administrative Support Technician; the Environmental
Educator is recommended to be funded by the General Fund.
After a question and answer period and brief discussion, the consensus ofthe Board is to further review the draft
budget and bring back specific recommendations and changes to the next budget work session to be held on May 12, 2005,
immediately following the staff meeting at 5 :00 p.rn.
Budget Director Griffin presented a tentative Budget Calendar for FY 05-06:
May 12 - Budget to Board at Staff Meeting with possible work session.
May 16 - Board Meeting - County Manager presents recommended budget
June 6 - Board Meeting - public hearing on budget
June 20 - Board Meeting - Adopt FY 05-06 budget
Hearing no further comments, Vice-Chairman Caster adjourned the meeting at 3 :20 p.rn.
Respectfully submitted,
Sheila 1. Schult
Clerk to the Board