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HomeMy WebLinkAbout1992-05-21 Budget Work SessionMINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 1 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, June 21, 1992, at 9:00 A.M. in the 1st Floor Assembly Room of the New Hanover County Administration Building, 320 Chestnut Street, Wilmington, N. C. Members present were: Commissioners Jonathan Barfield, Sr.; Fred Retchin; William H. Sutton, Vice-Chairman Robert G. Greer; Chairman E. L. Mathews, Jr.; County Manager, Allen O'Neal; and Clerk to the Board, Lucie F. Harrell. Chairman Mathews called the Work Session to order. REVIEW OF BUDGET PREPARATION AND DOWNSIZING PROCESS County Manager 0' Neal reported on the budget preparation process and the time involved with preparing and implementing the downsizing plan. Appreciation was expressed to staff and the department heads for the cooperative manner in which they responded. The budget process actually started in October, 1991 with implementation of the downsizing plan which allowed staff to prepare a budget with no property tax increase or increase in the tipping fee at the Landfill. The human services programs had the largest increase in budget requests. The Department of Social Services' budget will require 12% more County dollars to fund the Medicaid and AFDC programs. At the present time, over 10% of the population in New Hanover County is receiving food stamps. The County Manager and Management Team will continue to closely monitor the filling of vacancies as they occur in order to maintain the reduced number of positions. with the present level of employees, the County is able to effectively provide County services; however, in FY 1993-94, departments will not be able to further reduce employees and continue to provide a satisfactory level of service. In preparation of the 1993-94 budget, either programs will have to be eliminated or taxes raised if County services are to be properly administered. Should the economy turn upward, this may not be necessary. The Commissioners requested staff to carefully examine expenditures during FY 1992-93 and cut back whenever possible in order to operate County government as cost-effective as possible. County Manager O'Neal commented on the findings of the Strategic Planning Team and stated a presentation will be presented identifying the needs of the community as recommended by the citizens. Schools, transportation, elderly issues, and environmental issues are among items that have been identified. The Strategic Planning Team will present a report in late September, at which time, the Board and staff can begin to focus on the needs for FY 1993-94 Budget. The Commissioners expressed appreciation for an excellent job in preparing the budget. Vice-Chairman Greer complimented staff for fitting spending into the budget rather than fitting the budget into spending. Emphasis was again placed on continuing the downsizing process and offering services as economically as possible. REPORT ON ADDITIONAL BUDGET REQUESTS RECEIVED AFTER THE BUDGET DEADLINE Budget Director, Cam McAbee, presented a list of budget requests received after the budget preparation deadline and programs that may require additional funding during FY 1992-93: -Veterans Council: $20,000 request for additional office assistance in the State District Office located on Market " . . Street for processlng clalms for New Hanover County veterans. j .--- /' I I I I I ~ , I l MINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 2 -Association of Retarded citizens: $5,400 funding request for job skills training program for retarded citizens. -CBA agencies that did not receive funding recommendations may appear before the Commissioners at the Budget Public Hearing scheduled for June 1, 1992, at 6:30 P.M. -Jail Needs: Due to the jail expansion, the following' positions have been requested by the Sheriff: 10 deputies; 1 cook; and I utility worker. The total cost for funding these positions is $321,529, which has not been included in the recommended FY 1992-93 Budget. r ~'- ~- ,/ r\_ - -Nutrition Program: Estimates for this program were conservative; therefore, if donations and contributions are not received as anticipated, additional funding will be required during the fiscal year. -Human Services Programs: The funds to be received from the state and federal government will not be known until October; therefore, some additional funds may be required. -Animal Control Facility and Cape Fear Community College: These agencies will appear before the Board for future funding to begin capital projects. The FY 1992-93 Budget includes an amount of $300,000 as initial funding for a Capital Improvement Program. commissioner Sutton and Commissioner Retchin commented on discussion in Raleigh about a billion dollar bond issue for capital improvements to schools, including community colleges and universities, and recommended waiting to see what will transpire at the State level before appropriating capital improvements funds at the local level. Further discussion was held on selecting a site for expansion of Cape Fear Community College. It was agreed by the Board to continue to work with Cape Fear Community College on a site location. o APPROVAL OF FUNDING REQUEST FOR THE VETERANS COUNCIL Commissioner Barfield recommended funding $20,000 for office personnel to assist with processing benefits for New Hanover County veterans. Emphasis was placed on the fact that the program should be funded by the federal government and state; however, funds are not available, and in order to properly administer benefits to County veterans additional personnel is needed in the District Office, which serves six counties. A lengthy discussion was held on another county incorporating the administration of veterans benefits into the Department of Social Services. A distinction was made between veterans and persons receiving public assistance with a separate entrance and designated parking lot for veterans. One employee has been cross- trained to administer public assistance and veterans benefits. It is anticipated that this employee will spend 75% of the work week administering veterans benefits and 25% administering DSS benefits. It is not uncommon for veterans to need public assistance. Before implementation of this program, veterans were well informed about the plan and are anxious for the program to be implemented July 1, 1992. The Commissioners may wish to observe the success of the program in October before funding a position in the local District Office. /~ ',,- J Motion: After discussion of the District Office being willing to administer benefits for our veterans, Commissioner Barfield MOVED, SECONDED by Commissioner Sutton to approve funding in the amount of $20,000 to the District Office contingent upon these funds being utilized to render services to New Hanover County Veterans. Upon vote, the MOTION CARRIED AS FOLLOWS: .'. ..; , . .' ~ MINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 3 Voting Aye: Commissioner Barfield Commissioner Retchin commissioner Sutton Chairman Mathews Voting Nay: Vice-Chairman Greer Vice-Chairman Greer stated, for the record, he cannot support this motion since a District Office is located in Wilmington and the administration of the program is the responsibility of the state and federal government. He expressed concern for reducing funding for the meals program and stated if additional funds are going to be approved in the budget, he would prefer they be used to feed hungry people. DISCUSSION OF FUNDING REQUEST BY THE ASSOCIATION OF RETARDED CITIZENS Discussion was held on the funding request. Budget Director, Cam McAbee, stated the program is an intense one-on-one program designed to assist retarded persons with learning job skills. The agency was funded last year, but was not recommended this year due to the budget request being late. The program is in desperate need of funds. Discussion was held on allowing this agency to contract with the Southeastern Center. Commissioner Barfield stated this type program is necessary, but the program should be coordinated through the Southeastern Center where needs can be identified and applications can be made for grants to assist with funding of the program. It was generally agreed that this agency should approach the Southeastern Center for funding assistance. PERSONNEL COSTS AND ASSOCIATED MATTERS Director of Human Resources, Andre' Mallette, presented the major changes in the new Pay and Classification Plan implemented April 1, 1992. No merit increments were incorporated into the FY 1992-93 Budget, and no additional costs were incurred by the County for the new dental plan and Blue Cross Blue Shield medical plan. Funds have been incorporated into the budget for Blue Cross Blue Shield to cover the 6-month deductible period since the company is on the calendar year. Discussion was held on the provider number issued to the County by Blue Cross Blue Shield. Director of Finance, Andrew J. Atkinson, stated usage of the provider number will be implemented July 1, 1992, and will greatly increase the County's collection rate for EMS services. with the assistance of the County's Paralegal and her Assistant, the County's collection rate has already increased from 42% to 50%. Appreciation was expressed to Commissioner Sutton for his assistance in obtaining the provider number. Discussion was held on implementation of the new Human Resources computer program. Commissioner Retchin inquired as to whether the computer system will be more cost effective and if electronic transfer be available? Director Atkinson stated the system will provide more information and greatly assist the Health Department and Department of Social Services in accounting for the man hours utilized for the various state and federal grants, which will free up time for employees in these departments. The first payroll will be produced on the new system June 4, 1992, and electronic transfer will be available later in the year. Discussion was held on no merit increments being incorporated into the FY 1992-93 Budget. Commissioner Sutton stressed the importance providing merit increments to employees performing above ~ // ! MINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 4 average and stated the Board must not make a habit of removing merit increments for high performing employees. He strongly recommended that the County employees be informed that the Board will not cut out merit increments in future budgets and stated if new County dollars are received, he would like to see a merit percentage included in the budget. Further discussion was held on the fact that only 40% of County employees received an increase under the new plan with the remaining 60% not being eligible for an increase in the next fiscal year. The County Manager was directed to properly inform department heads that due to the cost involved with implementing the new pay plan, which developed a fair market salary for all positions, no merit increments were included in next year's budget; however, if additional funds should become available during FY 1992-93, Staff is to prepare recommendations for implementing the merit program. BREAK Chairman Mathews recessed the meeting for a break from 10:30 A.M. to 11:45 A.M. DISCUSSION OF WASTE-TO-ENERGY FACILITY (WTE) County Manager O'Neal reported that the N. C. State Employees' Retirement System does not feel that the creation of the WTE non- profit corporation is closely enough related to local government to allow those employees to continue to be members of the State Retirement System. The Attorney General's office has also informed the County that the non-profit corporation would be so closely related to local government that no waiver of purchasing constraints could be authorized. In view of these decisions, the WTE Advisory Committee has recommended an alternate organizational structure for operation of the WTE Facility as follows: -The name of the WTE Advisory Committee will be changed to the WTE Advisory Commission and will continue to serve in an advisory/advocacy capacity. -A resolution or ordinance defining the responsibilities of the WTE Advisory Commission would be prepared by the Commission and approved by the Board of County Commissioners. -A close working relationship will be maintained between the general manager and the WTE Advisory Commission at all times. The WTE Advisory Commission continues the search for a well qualified general manager. -The WTE Advisory Commission will also work with all other environmental programs. -The Director of Environmental Management will continue to operate the Landfill and Recycling Program with a staff of two environmental technicians to address the many environmental issues. -The new structure will provide for a close working relationship between the WTE Facility and the Landfill. commissioner Sutton requested the Commissioners to allow the WTE Advisory Board to continue to function in an advisory capacity as outlined. Emphasis was placed on County employees not losing their retirement benefits and the fact that, in the future, if this type of management structure becomes unsatisfactory, enabling legislation can be obtained for the facility to become an authori ty. Further discussion was held on development of a regional solid waste facility. It was generally agreed that in the future an authority will be developed as needs arise. Discussion was held on the importance of hiring a qualified general manager and plant engineer. The WTE Advisory Committee I l (\ \~~ o o . . . ~ MINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 5 voted on May 20, 1992, to begin the process of hiring a plant engineer. commissioner Barfield strongly objected to an organizational structure that will not allow the general manager to delegate duties to the environmental manager and stated this type of structure will not work. Vice-Chairman Greer expressed the following concerns: (1) informing the citizens that construction of the WTE Facility would save the taxpayers money, which has not happened; and (2) the increase in the department's 1992-93 budget for operation of the facility, particularly with the hiring of another group of employees, plus the present Environmental Management staff and employees. He strongly objected to hiring more personnel in the environmental section when they will have less responsibility once the general manager is hired. Assistant County Manager Weaver commented on environmental issues becoming more demanding with removal of underground storage tanks, air pollution emissions, groundwater contamination, shellfish contamination, etc. and stated adequate staff is needed to address these issues. He stated eventually the WTE Facility and Landfill will become an authority where a general manager will oversee the entire operation. A lengthy discussion was held on the operational cost and the need to perform the necessary maintenance of the WTE Facility. It was generally agreed that when the general manager and engineer are employed, many of the these problems will be resolved and daily maintenance will be performed properly. Another problem contributing to maintenance of the facility is the dry ash system which was placed in the first facility and continually creates dust during the burning process. staff is currently investigating a modification of this system for conversion to a wet ash system. Emphasis was placed on the fact that maintenance cost will always be a significant part of the WTE budget, and it is hoped that a proactive rather than reactive maintenance program will defray this cost. Discussion was held on the tipping fee. Commissioner Retchin stated other counties are charging a $30 tipping fee without lined landfills or incinerators. commissioner sutton stated the actual operating cost is $27 per ton, which is very competitive; however, energy sales must be generated in order to provide this rate. He reminded the Board that a decision was made to operate the plant during construction which was very costly as far as energy sales and other expenditures; however, this does not mean that the system will not produce enough revenue to sustain itself. Assistant County Manager, Dave Weaver, reported less than one- half of the counties throughout the state have solid waste-to- energy facilities set up as a private enterprise fund; therefore, these facilities are supplemented by general fund monies. It was generally agreed that New Hanover County is far ahead of other counties in addressing the solid waste problem which will assist greatly in the mandated reduction of the waste stream by 1993. Discussion was held on accepting trash from other sources. County Manager O'Neal stated before accepting trash from other sources, the plant must be fully operational. Once operational, and the County's capacity needs are projected, Staff will investigate contracting with other counties to accept trash during certain months of the year. ~ (~ I MINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 6 Discussion of Funds Remaining from the WTE Expansion Bond Issue Assistant County Manager, Dave Weaver, commented on approximately one million dollars left from the bond issue and stated these bonds will be sold in July. Monies received will be used for the following items: (1) $250,000 for change orders on the expansion project; (2) $84,000 for the air compressor installation; (3) $120,000 for correction of drainage and erosion problems on the plant site; (4) $150,000 for conversion of the dry ash system to a wet ash system; (5) $65,000 for installation of computer network system; and (6) funds for upgrading the testing equipment and ventilation system. Construction of Cell #4 in the Landfill will cost $200,000 for design and approximately $1,000,000 for construction. It is hoped that monies can be saved in the construction cost with the new bulldozer purchased last year. Discussion was held on EPA regulations and the possibility of a new requirement that will require the use of clay when installing the landfill cells, which will be quite expensive. () Discussion of Recycling Program Discussion was held on the proposed curbside recycling program. Vice-Chairman Greer requested an explanation of why this expenditure has increased 1/4 of a million dollars for the next budget year. Assistant County Manager Weaver reported after review by staff, it was decided to establish a curbside recycling program which will require five permanent employees, plus a temporary helper. Curbside may not be as c~st-effective as desired, but the program will promote an awareness of recycling. Discussion was held on the small tonnage being collected by the City with their residential curbside program, which is not cost effective and has reduced the waste stream by only 3%. Commissioner Retchin stated the only way to have a cost-effective program is to involve commercial haulers plus developing a commercial recycling program. n Discussion was held on the 25% reduction of the waste stream by 1993 as mandated by SB 111. Assistant County Manager Weaver stated additional permanent unmanned drop-off sites will not accomplish this mandate; however, development of a construction and demolition debris recycling program plus a commercial recycling program would greatly reduce the waste stream. The funds budgeted for curbside recycling could be used for design of such programs. Finance Director Atkinson requested allowing these funds to remain in the budget with various alternatives being prepared and presented for development of other programs. Consensus: After further discussion, it was the consensus of the Board to move forward immediately wi~h establishing more permanent unmanned recycling drop-off sites and eliminate the proposed curbside recycling program. Funds appropriated in the proposed budget are to be placed in an administrative reserve account for development of other recycling programs. Vice-Chairman Greer expressed concern for usage of the 1/2 cent sales tax, which has been earmarked for construction of the sewer system, and recommended reducing the budget instead of utilizing this funding source. (:J BREAK Chairman Mathews called a break from 12:05 P.M. until 12:15 P.M. DISCUSSION OF CAPITAL PROJECTS Deputy County Manager, Mary Gornto, stated no 'new capital projects are planned for the next fiscal year; however, $300,000 is included in the recommended budget to begin a capital project if desired by the Board. Assisting Cape Fear Community College in l ~ ~,. ,. MINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 7 addressing a site location or beginning the construction of a new Animal Control Center are examples of how these funds can be used. The following report was presented: Future Capital Projects: . -Construction of a branch library on Military Cut-Off Road. Due to expiration of the lease at College Square, consideration must be given to relocating this branch library until a facility can be constructed on Military Cut-Off Road. The Library Advisory Board has discussed the possibility of leasing space in the Plaza East Mall, and if agreed upon, this proposal will be presented to the County Commissioners at a regular meeting. -Myrtle Grove Branch Library: The construction contract has been awarded, and it is anticipated that the branch library should be operational the latter part of FY 1992-93. Only one position will be required and filled at that time. -Jail Expansion: The Sheriff has requested additional deputy positions due to the expansion. If approved, these positions will impact on the recommended budget. -Airport Burnpit: The burnpit clean-up is on-going with $200,000 included in the recommended FY 1992-93 Budget. -Museum and Senior Center Expansions: Both projects have been completed with additional operational costs projected; however, additional funds may be needed before the end of the fiscal year. . -Parks & Recreation Bond Referendum: Planning and engineering contracts have been awarded for development of two parks with construction to be completed by the end of the fiscal year. No funds have been included in the recommended budget for the operation of the parks. In the future, there will be additional costs for these facilities. -Wrightsboro Rehabilitation Project: This project is on-going with no funding impact on the budget since staff time is being utilized. -Urban Park: No funds are included in the recommended budget for development of the Urban Park. The Committee is in the process of trying to raise funds for development of the park with contributions of $15,000 received as of this date. Discussion was held on the demolition of st. James Inn and the possibility of using the old brick in development of the Urban Park. Deputy County Manager Gornto stated, unfortunately, the brick cannot be cleaned properly due to the type and quality of the brick. DISCUSSION OF FUND BALANCE Finance Director, Andrew J. Atkinson, presented the following definitions and information on the fund balance: . -Fund Balance: The difference between fund assets and fund liabilities. This fund is not all cash. -Reserve Fund Balance: That portion of fund balance that is not available for appropriation. Items such as encumbrances, and items reserved by state statute. -Appropriated Fund Balance: The appropriated fund balance in any fund shall not exceed the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts, as those figures stand at the close of the fiscal year next preceding the budget year. ~ ( I l MINUTES OF BUDGET WORK SESSION, MAY 21, 1992 PAGE 8 -Goal for Unreserved Fund Balance: The stated goal has been to maintain an amount equal to two months average expenditures of next year's budget as unreserved fund balance. -Budget Fund 110 represents the General Fund. -Budget Fund 120 represents the 1/2 cent sales tax. A lengthy discussion was held on the fund balance and the need to achieve the goal for the Unreserved Fund Balance. Director Atkinson stated the fund balance should not be used for operational expenditures that occur year after year, but for projects, such as completion of the Airport. Emphasis was placed on maintaining and building this fund. () BUDGET HEARINGS SCHEDULED FOR MAY 22, 1992, WORK SESSION County Manager O'Neal presented the following list of agencies that will be appearing before the Board for discussion of budget requests and recommendations: New Hanover County Schools Department of Social Services Cape Fear Community College Health Department Sheriff's Department Airport DISCUSSION OF SB 440 AND SB 452 County Manager O'Neal presented information on SB 440 and SB 452 stating the Chamber of Commerce, N. C. Association of County Commissioners, and N. C. League of Municipalities are in favor of the proposed bills which support economic development financing. Due to the nature of the bills and time needed to thoroughly review the information presented, it was decided that this item can be discussed at the Budget Work Session scheduled for May 22, 1992, or at the regular meeting of June 1, 1992. r:) DISCUSSION OF CERTIFIED FINANCIAL STATEMENT REQUIREMENT WHEN AWARDING CONTRACTS Deputy County Manager Gornto stated discussion with the Executive Director of the Wilmington/New Hanover County Insurance Advisory Committee, a company would be required to provide three years of financial statements on the operation of the company with compilations being acceptable. In order to be sure a company has financial stability, staff recommends replacing the required Certified Financial Statement with an audit, compilation, or a ,review as performed by a certified Public Accounting firm. Finance Director Atkinson stressed the importance of knowing a company is financially stable before awarding the contracts. commissioner Sutton recommended requiring the company to provide a certified letter from the insurance company stating a performance bond can be obtained if the bid is awarded. Consensus: After further discussion, it was the consensus of the Board to request staff to check with the Wilmington/Insurance Advisory Committee to see if a certified letter can be obtained from the insurance company stating that a performance bond can be obtained if the bid is awarded. r\ ~~ ADJOURNMENT Chairman Mathews adjourned the meeting at 1:45 P.M. ~JZ:d' Lucie F. Harrell Clerk to the Board