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HomeMy WebLinkAbout2022-04-28 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 BUDGET WORK SESSION MEETING, APRIL 28, 2022 PAGE 413 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on Thursday, April 28, 2022 at 2:00 p.m. via in-person and remote in the Harrell Conference Room at the New Hanover County Government Center, 230 Government Center Drive, Wilmington, North Carolina. Members present: Chair Julia Olson-Boseman; Vice-Chair Deb Hays; Commissioner Jonathan Barfield, Jr. (remote); Commissioner Bill Rivenbark; and Commissioner Rob Zapple. Staff present: County Manager Chris Coudriet; Deputy County Attorney Kemp Burpeau; and Clerk to the Board Kymberleigh G. Crowell. Chair Olson-Boseman called the Budget Work Session meeting to order and announced that the purpose of the meeting is to discuss budget priorities for Fiscal Year (FY) 2022-2023. FISCAL YEAR 2022-2023 BUDGET WORK SESSION Chief Financial Officer Lisa Wurtzbacher presented the following information:  New Hanover County Schools (NHCS):  Operating Update – anticipate net add to exceed $18 million:  Salary study implementation + mandatory salary and benefit state raises  Reprioritizing initial budget request to the board based on the salary study implementation plan  Current average daily membership (ADM) rate $3,434, anticipate ADM rate to exceed $4,114  Currently Ranked #9 in County Appropriation, #7 or higher with estimated ADM  Capital Summary - $4,696,000 ($1 million over FY22 allocation):  Repairs and Renovations: $3,533,215  Technology: $564,522  Vehicles: $314,800  Furniture: $283,463 th  Expect official proposal May 4 Ms. Wurtzbacher stated that the figures presented above are based on the Board of Education’s budget work sessions and clarified that the official ask has not yet been made. In response to Board questions regarding items in the NHCS budget, Ms. Wurtzbacher stated that the one-to-one project is being funded through elementary and secondary school emergency relief (ESSER) funds. A brief discussion ensued regarding the NHCS fund balance. County Manager Coudriet stated that for the current fiscal year, FY22, the Board of Education decided to violate its own fund balance policy and went below their minimum balance to give some relief to the County’s budget. County staff is unsure how much, if any, fund balance will be used for FY23. Ms. Wurtzbacher stated that as of June 30, 2021, the NHCS unrestricted fund balance was $11.9 million. Discussion ensued regarding the ADM. The FY23 budget assumes an ADM rate of $3,434 per student. Budget Officer Michelle Daniels stated that the ADM for NHCS only is projected to be 24,532 students. It is projected that there will also be 2,023 students in charter or virtual charter schools for a total student count of 26,555. Traditional charter schools are projected to have 1,942 students, leaving 81 students in the virtual charter school. The ADM rate for virtual charter school students is $790. In February 2022, there were 24,583 students enrolled for NHCS, 1,787 students enrolled at charter schools, and 82 students enrolled in the virtual charter school for a total of 26,452 students.  FY23 Enterprise and Special Revenue Funds:  Environmental Management:  FY23 Budget Estimate: $23.3 million  FY23 Tip Fee Increase – $52/ton (includes $2 state surcharge):  $2 - existing operating and capital expenses + litter program:  Capital Outlay to be financed  $2 - surcharge to reimburse the $3 million to the General Fund in five years  Historical Information on Tip Fee/Ton: Discussion ensued regarding litter. County Manager Coudriet confirmed that if the litter program were put in place, County employees would be tasked to pick up litter. Commissioner Barfield expressed concern about this initiative as it is the state’s responsibility to pick up litter. He feels that once the County takes this over it will then become the County’s responsibility. He suggested requesting the North Carolina Department of Transportation NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 BUDGET WORK SESSION MEETING, APRIL 28, 2022 PAGE 414 (NCDOT) to do its job and pick up the litter as opposed to adding more staff to the County’s budget. County Manager Coudriet stated that if the Board chose not to proceed with the litter program, it would strike about $1 from the tip fee increase. He added that whatever fee the Board sets will be the fee for at least the next two fiscal years. Vice-Chair Hays reported that according to NCDOT Division Engineer Chad Kimes, the NCDOT picks up litter prior to each mowing cycle. For the current fiscal year, NCDOT has planned for five mowing cycles for interstates and primary roads and four mowing cycles for most secondary roads. The program runs from spring until the first frost in the fall. There are also volunteer based spring and fall litter sweeps. Discussion ensued between the Board members regarding mowing and debris pickup correlations. After further discussion, the consensus of the Board was to keep the proposed tip fee at $52/ton for FY23.  Fire Services District:  FY23 Budget Estimate: $19.6 million  FY23 Tax Rate – no change; 7.25 cents:  Base grew $431.2 million  Generates about $337,000 additional revenue  Capital outlay and projects financed In response to Board questions regarding the funding and construction of the new fire station, Ms. Wurtzbacher stated that those funds are in the Capital Improvement Plan (CIP) for FY24. There is also a ladder truck slated for purchase in FY23 and is part of this proposal.  Stormwater Services:  FY23 Budget Estimate: $4.2 million  FY23 Stormwater Fee – $5.65 per ERU per month or ($67.80 annually):  FY22 - $12 annual fee implemented to pay for debt:  American Rescue Plan Act (ARPA) absorbed $3.5 million in expenses  Services initiated in FY21 In response to Board questions, Ms. Wurtzbacher stated that stormwater services crews are working at both the northern and southern ends of the County. County Manager Coudriet added that although FY23 will be the first year at the full cost for citizens, this is the third year of the program. Ms. Daniels confirmed that there were thirteen positions for the department which includes primarily field staff along with engineering and geographic information system (GIS) staff.  Other Funding and Initiatives:  ARPA update:  FY23 Community Building Funding Plan: In response to Board questions about community communication, County Manager Coudriet stated that there is not an app for PCU-Connect. What the Board may be thinking of is text-a-tip, but the apps are not viewed as very trustworthy. The County will have a platform that allows staff to understand what is happening on social media and begin to identify risk and threat. In response to Board questions about the Food Desert Grocery Store, County Manager Coudriet confirmed that the name of it will be the Northside Food Co-op. The funding proposed on the slide is for the design and NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 BUDGET WORK SESSION MEETING, APRIL 28, 2022 PAGE 415 construction of the project. At this point, the operation costs are being worked on, specifically in a way to cashflow a positive and profitable facility on an annual basis. The County is currently working to hire a consultant, and this is part of what that consultant will be assisting with.  FY23 Community Building Escrow Funds - $4.9 million In response to Board questions about the escrow, County Manager Coudriet confirmed that $7.3 million is being utilized for the proposed FY23 budget. Of that, $4.8 million is related to community building and $2.5 million is to absorb the tax rate reduction. In response to Board questions about funding for the boarding school, County Manager Coudriet stated that FY22 funded some design costs with fund balance, but construction starts in FY24. The conversation for construction costs will begin taking place this time next year. Discussion ensued regarding school transportation and summer school. County Manager Coudriet stated that regarding transportation, there has been discussion on placing another trusted adult on school buses. There has also been discussion on whether some of those trusted adults could be Community Resource Coordinators. The details are still being worked out. Regarding summer school, there is an obligation to do summer school. What the Board expressed interest in FY22 was for after school enrichment which is currently operating. WORKFORCE HOUSING UPDATE Planning and Land Use Director Rebekah Roth presented the following information for the Workforce Housing update:  Housing team:  Planning component:  Coordination with Housing Committee and stakeholders  Public Education  Data/Studies  Ordinance Amendments for Affordability Incentives  Housing components of community Plans  Programmatic component:  GapRAPP  Workforce housing services program  Rental housing acquisition and preservation loan program  Rehabilitation loan program (future year)  Public/private partnerships  Leveraging of other programs In response to Board questions regarding collaboration with the County’s nonprofit partners, Ms. Roth stated that all the programs that have been conceived thus far have come out of the workplan that was developed by the Workforce Housing Advisory Committee (WHAC). The Wilmington Area Rebuilding Ministry (WARM) is one of the nonprofit partners that works with WHAC and there is a member on the committee who represents WARM. Staff and WHAC are still working out some of the details about what the programs will look like and WARM may end up collaborating with individual homeowners through the housing services program. As time moves forward, staff will be able to adjust some of the programs to make them more effective since the framework has been put into place. In response to Board questions regarding programs specific to certain repairs as well as water and sewer, Ms. Roth stated that some of what the County will be able to allocate is based on what other funding sources the County may be able to leverage. There is a pot of money that the County currently has in an existing water and sewer NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 BUDGET WORK SESSION MEETING, APRIL 28, 2022 PAGE 416 loan program. She believes there is less than $500,000 in the program but will verify and report back to the Board. There will be limits as to what makes sense in terms of being able to provide that for the applicants. Currently, the program is structured as a loan where people payback the funds over a period at very low interest rates, but it may make more sense to turn it into a grant program once staff works out some of those details. Ms. Roth confirmed that the programs are only for residential.  Program timeline (FY22):  Workforce Housing Services Program – DRAFT Initial Request for Proposal (RFP) Criteria (Round 1):  Number of new units  Target area median income (AMI)  Shovel-readiness  Period of affordability  Developer experience  For-sale or rental product  Mixture of price-points  Leverage ratio  Amount of funding requested per workforce/affordable unit  Program timeline (FY23):  Program timeline (FY24):  FY23 Housing Work Plan: In response to Board questions, Ms. Roth confirmed that there will be a diverse mix of housing and price points. Discussion ensued regarding the evaluation at the end of the process. The housing services RFP program is the new primary program that will be launched in FY23. Staff will manage the initial launch to allow the County to evaluate whether the types of projects proposed were the ones anticipated by staff. If anything needs to be changed before getting to the next round of RFPs, that will be one of the natural evaluation points. The end of the fiscal year is when staff will determine if the RFP program is structured correctly or whether the County needs to consider some NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 BUDGET WORK SESSION MEETING, APRIL 28, 2022 PAGE 417 additional programming instead of what is currently in the framework. The reporting preference for this is up to the Board, but it would make sense to provide some indication of how the money is going to be allocated over the coming year. In response to Board questions regarding City of Wilmington (City) collaboration, Ms. Roth stated that this presentation has not been provided to the City Council, but if they are interested, staff can reach out to them. In the past, the County has requested that the City allocate some of its budget that is set aside for affordable housing to this effort. With WHAC being a joint task force, the County and the City can collaborate, cooperate, and streamline a great program. Ms. Roth stated that might be something to think about in terms of some of the criteria for the RFP. If there is the ability to capitalize on existing City programs, that might be helpful. The acquisition/preservation program is envisioned to be able to allow citizens to use the City's down payment assistance and housing ownership pool (HOP) programs to purchase homes. She believes there is some natural synergy that is being built in, but staff has not prepared a joint presentation of how that works. WRAP UP DISCUSSION Ms. Wurtzbacher summarized the key points from the presentation:  Summary:  New Hanover County Schools: $18 million request taking ADM to $4,114  Environmental Management: $4 tip fee increase, $52/ton  Fire Services District Fund: no change in the 7.25 cents tax rate  Stormwater Services: full fee imposed: $5.65 per ERU per month  ARPA: $3.8 million reallocated to General Fund  Community Building: $4.9 million in escrow planned for FY23  Workforce Housing: $3 million for initial roll-out of housing services program  Proposed tax rate of 46 cents In response to Board questions on the NHCS Board of Education’s potential funding request, the County staff position remains as it was, and County Manager Coudriet reiterated that staff did not intend to change their recommendation irrespective of what is requested. Staff does believe that it is probably a little more appropriate to meet NHCS closer on the capital side as the cost of capital projects is only going to increase, but $3,434 is what the budget will recommend based on 26,555 students. In response to Board questions regarding the school construction projects for Pine Valley Elementary, Mary C. Williams, and RiverLights Elementary, County Manager Coudriet stated that staff is waiting for NHCS to find out about the grant award that it applied for. None of the cost for the three schools is proposed in the next year. The funding request for Cape Fear Community College was briefly discussed. Ms. Wurtzbacher reported that the request for the next fiscal year is $13,494,742; $11.4 million for operating and $2.1 million for capital. Debt service for CFCC is $10,368,000 which is not part of the ask. County Manager Coudriet and Ms. Wurtzbacher concluded the presentation providing an overview of the next steps as follows:  Board Member Briefs: May 2 to May 6  Manager’s Recommendation – May 16:  Includes Non-county Agency Funding Committee Recommendation  Public Hearing: June 6  Budget Adoption: June 20 A brief discussion was held regarding the proposed board member briefs versus the Board meeting as a body. County Manager Coudriet stated that staff is available to meet should any Commissioner desire to do so. ADJOURNMENT There being no further business, Chair Olson-Boseman thanked staff for the presentation and adjourned the meeting at 3:46 p.m. Respectfully submitted, Kymberleigh G. Crowell Clerk to the Board Please note that the above minutes are not a verbatim of the New Hanover County Board of Commissioners meeting.