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2005-11-03 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, NOVEMBER 3, 2005 BOOK 30 PAGE 440 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, November 3, 2005, at 3:35 p.rn. in Room 501 at the Administration Building, 320 Chestnut Street, Wilmington, North Carolina. Members present were: Chairman Robert G. Greer; Vice-Chairman William A. Caster; Commissioner Ted Davis, Jr.; Commissioner William A. Kopp, Jr.; Commissioner Nancy H. Pritchett; Interim County Manager Dave Weaver; Deputy County Attorney Kemp Burpeau and Clerk to the Board Sheila 1. Schult. Others present were: Budget Director Cam Griffin; Senior Budget Analyst Norma Troutman; Budget Analyst Donna Seal; Finance Director Bruce Shell; Assistant County Manager Patricia A. Melvin; Sheriff Sidney A. Causey and Public Information Officer Mark Boyer. Chairman Greer called the meeting to order and asked Interim County Manager Dave Weaver to begin the presentation. PRESENTATION AND DISCUSSION OF THE FY 2006-2007 BUDGET Interim County Manager Dave Weaver reported that the purpose of the preliminary budget planning session was to report major issues in the current FY 05-06 budget to the Commissioners and to look ahead to issues that will be faced in the FY 06-07 budget. Staff is looking forward to working with the Commissioners on the budget process and ready to supply any information requested to help in that process. He requested Finance Director Bruce Shell to give a brief overview of the County's financial health. Finance Director Bruce Shell reported that the County remains financially strong. The results ofthe audit are not official but the preliminary audit review shows an increase in fund balance in the amount of $1. 9 million. This amount puts the County above the goal of 16.67% of expenditures in umestricted fund balance and approximately $8 million above that goal. The County enters into this budget process with the ability, if necessary, to use fund balance to support the effort. After a brief question and answer time Budget Director Griffin presented the following issues in the FY 05-06 Budget: . The cost of energy may have an impact on the budget. There have been significant increases in the cost of fuel since the budget was adopted. . The Sheriff's Office is concerned with the rate at which the Detention Center is spending overtime funds. . Elections may have to purchase voting equipment in FY 05-06 if the State Board of Elections makes a decision on the equipment to be purchased. There is a possibility that there might be some grant funding available to help with this purchase. . The Department of Social Services has a large number of eligible individuals on the day care waiting list. As pointed out in the FY 05-06 budget, there is a $3 million shortfall in state day care funding between the FY 04-05 amended amount and the FY 05-06 adopted amount. . Property Management staff continues to be stretched by the increase in the number of County buildings that require cleaning and maintenance. The windows at the old courthouse are scheduled for replacement with metallic framed windows, this project may exceed the budgeted amount. . The Commissioners' office may get a new employee in January 2006. . The Airport may request funding from the County for asbestos removal or total demolition of the old terminal building at the airport. Budget Director Griffin stated that each year since FY 00-01 during the budget process, Staffhas expressed concern about funding expanded facilities at a minimum level. It has been pointed out that the static funding could not be continued into the future if citizens were to receive the same services they demand. The FY 05-06 budget was approved with a tax rate less than the FY 01-02 tax rate. The County has been fortunate in having growth in the tax base and sales tax to allow the budgets to be balanced without a tax increase and still have an expansion in services and funding for public safety and education. Based on a preliminary review of projected expenditures and revenues for FY 05-06, it does not appear that the FY 06-07 budget can be balanced with a constant tax rate unless there is a decision made to cut some services and hold other services static including public safety and education. The increase in the cost of energy and resulting increases in other projects will also impact County departments in FY 06-07. North Carolina counties are required to provide certain servIces and the areas of the budget where the Commissioners have complete latitude in funding are limited. The following are specific budget issues for FY 06-07: . Increase in cost of health insurance for County employees. . Gang Task Force expansion. . Vehicle replacement program for County vehicles. . Increased funding for Medicaid. . Day care waiting list. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION, NOVEMBER 3, 2005 BOOK 30 PAGE 441 . Cape Fear Community College funding mechanism for the $2.5 million contribution for additional classroom space that was approved by the Commissioners on September 19,2005. . Sheriff's Office has expressed a need for 20-25 replacement vehicles and additional funding for overtime in the detention center. . There may be an increase in insurance premiums due to monetary losses as claims are coming in from the recent storms. . Funds will have to be budgeted for incentive payments anticipated for distribution in FY 06-07. . A northern schools/parks campus is being considered. The County would be responsible for funding the park acquisition, development and maintenance. . Southeastern Center may need additional funding for Crisis Center, Detox Center and Psychiatric Services as well as additional funding demands of unfunded mandates imposed by the state. . The Department of Aging currently has a waiting list for home-delivered meals. . Emergency Management has expressed a need to begin a program to install permanent generators in emergency shelters and has requested a full-time position to manage the day -to-day issues associated with the 800 MHz radio systern. . There may be an increase in the operating expenses when Anderson Elementary School is opened in FY 06-07 while housing the Carolina Beach Elementary School staff. Significant increases in staffmg will be required in FY 06-07 when the school will open in its own district. It is estimated that the Board of Education debt service will increase $2.3 million between FY 05-06 and FY 06-07. Payment on voter- approved debt related to the bond referendum passed in FY 04-05 will increase $3 million. . There will be a significant financial impact if the County decides to expand a comprehensive approach to drainage. . Debt service payments in the General Fund not related to education are anticipated to increase $600,000 between FY 05-06 and FY 06-07. . InFY 05-06 an amount of$4.8 million was transferred in from capital projects and used to fund a portion of the FY 05-06 debt service; this money is not available in FY 06-07. Increases in sales tax and ad valorem tax base will not be sufficient to fund the total projected increase in expenditures. Budget Director Griffin presented the County's Programmatic Goals, capital improvement projects currently in progress, requested capital improvements and capital projects and the proposed budget calendar for FY 06-07. She stated that staff looks forward to working with the Commissioners during the remainder of the budget process and requested that she be notified of any specific information that would assist in that process. Hearing no further comments, Chairman Greer adjourned the meeting at 4:40 p.rn. Respectfully submitted, Sheila 1. Schult Clerk to the Board