2023-05-15 Regular Meeting
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 767
ASSEMBLY
The New Hanover County Board of Commissioners met May 15, 2023, at 9:00 a.m. in Regular Session in the
Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington, North Carolina.
Members present: Chair Bill Rivenbark; Vice-Chair LeAnn Pierce; Commissioner Jonathan Barfield, Jr.;
Commissioner Dane Scalise; and Commissioner Rob Zapple.
Staff present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; and Clerk to the Board
Kymberleigh G. Crowell.
INVOCATION AND PLEDGE OF ALLEGIANCE
Pastor Eddie Eaton, Wrightsboro Baptist Church provided the invocation and Commissioner Barfield led the
audience in the Pledge of Allegiance to the Flag.
APPROVAL OF CONSENT AGENDA
Chair Rivenbark requested a motion to approve the Consent Agenda as presented.
Commissioner Barfield stated that he would make the motion to approve the Consent Agenda as presented
and direct staff to look at rebidding the audit services contract next year.
Hearing no further discussion, Chair Rivenbark asked for direction from the Board.
MOTION: Commissioner Barfield MOVED, SECONDED by Commissioner Zapple to approve the Consent Agenda as
presented and directed staff to look at rebidding the audit services contract next year. Upon vote, the MOTION
CARRIED UNANIMOUSLY.
CONSENT AGENDA
Approval of Minutes – Governing Body
The Commissioners approved the minutes of the Budget Work Session and Agenda Review held on April
27, 2023.
Approval of the Contract Renewal for Audit Services with Cherry Bekaert LLP for Fiscal Year 2022-2023 – Finance
The Commissioners approved the contract renewal for audit services with Cherry Bekaert LLP for Fiscal Year
2022-2023.
Adoption of Budget Amendments - Budget
The Commissioners adopted the following budget amendments amending the annual budget ordinance for
the fiscal year ending June 30, 2022:
Environmental Management 23-062
CFCC Health Program Expansion 23-064
ARPA Funds 23-065, 23-066
Bid Deposits 23-067
Sheriff's Office 23-068, 069, 070, 071
Copies of the budget amendments are hereby incorporated as part of the minutes and contained in Exhibit
Book XLIX, Page 10.1.
REGULAR ITEMS OF BUSINESS
PRESENTATION OF SERVICE AWARDS AND INTRODUCTION OF NEW EMPLOYEES
County Manager Coudriet recognized the following employee receiving a retirement award:
Corporal Larry Daley, Sheriff’s Office, retiring with 14 years of service
Chair Rivenbark presented the retirement award to Corporal Daley and the Commissioners expressed
appreciation and thanked him for his years of dedicated service.
County Manager Coudriet requested the following employees to step forward to receive service awards:
Five Years: James Barnes, Parks and Gardens
Ten Years: Shannon Vaughn, Library
Twenty Years: Karen Graham, Health and Human Services (HHS) – Administration
Twenty-Five Years: Erica Price-Pollock, HHS – Social Services
Thirty Years: Kelly Redenbaugh, HHS – Social Services
Chair Rivenbark presented a service award to each person and the Commissioners expressed appreciation
and thanked each one for their years of dedicated service.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 768
County Manager Coudriet requested the following new employees to stand and be introduced:
Alexandria Berry, HHS – Social Services
Renae Floyd, Port City United
Beth Lankford, HHS - Social Services
Mark Mitchell, Tax
The Commissioners welcomed the employees to County Government and wished them success in their
new positions.
CONSIDERATION AND ADOPTION OF 2023 OLDER AMERICANS MONTH PROCLAMATION
Chair Rivenbark read the proclamation into the record, recognizing May 2023 as “Older Americans Month”
in New Hanover County.
Hearing no further discussion, Chair Rivenbark asked for direction from the Board.
Motion: Commissioner Barfield MOVED, SECONDED by Commissioner Zapple to adopt the proclamation recognizing
May 2023 as “Older Americans Month” in New Hanover County. Upon vote, the MOTION CARRIED UNANIMOUSLY.
Senior Resource Center Director Amber Smith expressed appreciation to the Board for adopting the
proclamation.
A copy of the proclamation is hereby incorporated as part of the minutes and contained in Exhibit Book
XLIX, Page 10.2.
PUBLIC HEARING AND APPROVAL OF A DEVELOPMENT AGREEMENT FOR THE REDEVELOPMENT OF THE
WILMINGTON CITY BLOCK BOUNDED BY CHESTNUT STREET, GRACE STREET, SECOND STREET, AND NORTH THIRD
STREET
Chair Rivenbark opened the public hearing by stating that the Board will consider the approval of a
proposed development agreement with Cape Fear Development Partners, LLC, for the construction of a civic and
arts facility including a library component and a museum component of approximately one (1) acre and an improved
parking deck, together with proposed conveyance of a County property located within the Grace Street block for
mixed-use development pursuant to North Carolina Session Law 2017-86 and North Carolina General Statute (NCGS)
160D – 1315. Cape Fear Development Partners, LLC, will manage the construction of both the public and private
facilities. The private development may include residential and mixed use, will enhance tax value, and is estimated
to be at least $30,125,838 in construction costs. Construction of the library and museum components is estimated
at $60,524,860. The project is expressly subject to all regulatory financing approvals. The Board will now hear the
staff presentation on the proposed development agreement.
Assistant County Manager Lisa Wurtzbacher and Chief Financial Officer Eric Credle presented the following
information on the request:
Project Grace Development Agreement:
Project history:
2017: Market and site analysis conducted
2018: Request for proposals for redevelopment
2019-2021: Development team reviewed site alternatives
March 2021: Memorandum of Understanding (MOU) with Zimmer Development
Summer 2021 – Spring 2022: Discovery, schematic design, and construction documents
Fall 2022: Financing not approved
Fall 2022: Zimmer withdrew, and County purchased design plans
Winter 2023: Cape Fear Development review of plans and project
Project Schematics:
Approximately 94,000 gross* square feet of new, purpose-built, modern facility:
A space that brings the library and museum together to enhance the visitor’s experience:
Library space will include spaces for adults, children, teens, and local history
Museum space will include an immersive theater, several galleries, space for a
changing gallery
Shared space will include multi-purpose rooms and an outdoor terrace
*Gross square footage to include the entire building footprint inclusive of areas such as
the loading dock and bay
Proposed Development Agreement:
Construction of public and private components to be managed by Cape Fear Development
Preliminary museum/library budget of $60,524,860:
Excludes direct purchases such as furniture and exhibits
Includes developer fee of 3.5%
Includes parking deck improvements
Final budget to be approved by the Board in July 2023
Sale of south parcel to developer:
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 769
Greater of $3.5 million or appraised value
Sale after completion of museum/library facility
South parcel development:
Will include mixed-use development
If residential is included, at least 5% of units would be workforce housing for at least 10
years
Private investment of no less than $30,125,838
Construction commences within 24 months of the sale of the south parcel
Parking would be shared, and a parking agreement would be negotiated between the parties
Development agreement is contingent on County’s financing approval
Project Budget:
*This cost does not include direct purchases to be made by the County such as fixtures, furniture,
and equipment (FF&E), special inspections, and exhibit design and fabrication. These costs are
currently being developed/finalized and will be included in the July presentation on the final
development agreement.
Estimated Debt Impact:
Annual debt service on $60,524,861 over 20 years at 3.48% = $4,225,791:
Based on June 30, 2023 estimates, including the previously approved debt issuance that is in
process
Financial Analysis:
* Only assumes land sale for $3.5 million + property taxes on $30.1 million private investment at
current tax rate, with 3% annual growth in value. There is potential for room occupancy taxes,
sales taxes, and parking space rentals.
Project Grace Comparison:
* Project cost increase is due primarily to inflation, as the project scope is substantially the same
Timeline and Next Steps:
Revise designs and bid project: now through June 2023
Request Board of Commissioners approval of final budget and financing application: July 2023
Request Local Government Commission approval: September 2023
Construction begins: October 2023
Mr. Credle responded to questions as to if the delay caused by the Local Government Commission’s (LGC)
recent denial cost the County $4.5 million that he thinks when comparing the two scenarios the total cash outlay is
$4.5 million higher than last time and inflation has become very high over the last couple of years.
In response to questions about the difference between an MOU and a developer agreement, Ms.
Wurtzbacher stated that it is just a difference in the wording, but the components are the same.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 770
Discussion ensued about the parking deck. Ms. Wurtzbacher stated that the wording and structure for the
parking deck will be ready for the Board to review in July, but staff may not be able to provide the final number of
spaces at that time. County Manager Coudriet asked the Board what is being looked for with the parking spaces as
staff has previously shared with the Board the number of spaces that were in use before the special use permit for
the reservation of spaces was taken out. He further noted that as it relates to the project cost, those were estimates
under Zimmer Development, but there were delays built into that which would have driven up the original top line
number higher. There is no delta to argue, because the Zimmer Development numbers were the best estimate at
the time that the County was before the LGC. As the project proceeds, as it is, the County will end up spending less
money out of its own coffers but generating the same amount of return. That was the expectation when the County
went into it with Zimmer Development that then borrowing the money would be more expensive to the County, but
there was a guarantee of revenue. He does not want the Board to become myopically focused on those two numbers
as that was an estimate at the last point of the bid and those numbers were continuing to go up. By the time the
County was before the LGC, interest rates were raised at least four times. Those numbers are predated but it would
be helpful if staff understood what the Board is looking for in parking and how it would be different perhaps, than
what Zimmer Development had for residential and public purposes as well. He explained that by restriping, 40 spaces
could be recaptured which would bring the total number of spaces to 660. Vice-Chair Pierce stated that she feels the
development agreement language is very vague on if the developer would lease spots at market rate from the
County as others have done. She feels that is important to have that language spelled out in the contract and to
know which deck levels would be dedicated to the library and the museum for the public.
Discussion ensued about improvements that are planned for the parking deck. Ms. Wurtzbacher stated in
addition to the striping, as the library and museum facility will be built on the other side, the parking deck will be a
bit more enclosed. Chief Facilities Officer Sara Warmuth stated that because the new building will be butted up
against the existing deck, essentially it will be enclosing what is now an open-air deck. There are code requirements
that will have to be met to ensure proper airflow in the deck. Additionally, some alternatives will bid to see if it
makes sense financially to have some doorways and ramps connecting the two buildings as their floorplates are not
going to fully line up. Ultimately the existing deck, depending on what is constructed on the south side could be
enclosed, which she feels is a benefit because it would be nice to have beautiful buildings wrapped around it. There
also would be security cameras with access control installed, which is a standard put into all the County projects.
Mike Brown representing Cape Fear Development Partners, LLC (CFDP) in response to questions about plans
for disadvantaged business enterprise (DBE) participation, stated he would defer to Bryan Thomas with Monteith
Construction to explain the DBE outreach as part of the bid process. Mr. Thomas stated that Monteith Construction
has a robust diversity, equity, and inclusion program that is adhered to when bidding the projects. The goal is 20%
participation. There will be outreach programs that are done within the community like what his company did at
UNCW with three other general contractors for the projects that they are bidding on that facility. The same
guidelines would also be used for this type of project. It is a mission for Monteith Construction as a team and as a
company for minority participation across the board.
Regarding the sequence of events, Ms. Wurtzbacher confirmed that the County had an original project
concept, went to LGC and the LGC gave the County notes on some things that it thought could be improved, which
the County took to heart. The County purchased the plans and CFDP took the initiative to contact the County about
the project. As to what CFDP did after they took that initiative to let the County know they were interested and as
to why the County took CFDP seriously when they expressed that initiative to the County, Ms. Wurtzbacher stated
that CFDP reviewed the plans and worked with the County on what type of value engineering items were available
to reduce the project costs. She explained that value engineering is determining what items that can be taken out
of the project costs while giving the County the project it wants. Also, CFDP looked at the private side in terms of
what type of development would be on the private side and whether it would work for them. Those things were
happening simultaneously. The County has not paid anything to CFDP for those pieces of due diligence. She further
confirmed that the same opportunity to take the initiative was available to others in the community, but it was CFDP
that ultimately provided that initiative. County Manager Coudriet stated that at the outset of the process, the County
also went through a Request for Qualifications (RFQ) that led to the original proposal. There was an organized
process when the County bought the plans and the Board was very clear in communicating that if someone had an
interest, they were to come forward and staff made that explicitly known. There was not an RFP, but the County has
been very publicly deliberate, because that is not how these types of projects are done by statute. There was an
extensive solicitation process that ultimately led to the vision that is before the Board. The bidding of the project,
the public purposes, will be a public process. It is an open-book process, just as if the County were the bidder on the
work itself. Ms. Wurtzbacher further stated that one of the things that the developer also did was to look at the
current library to see if it could be renovated and if it was a feasible option.
In response to questions about whether a hotel built on the property would be considered part of the
convention center district and receive the room occupancy tax (ROT) funds, Ms. Wurtzbacher confirmed that was
correct. Regarding additional questions about other companies, businesses, and organizations stepping forward to
look at the project, she reiterated that the only one to do so was CFDP.
Discussion ensued about the guaranteed maximum price (GMP). Ms. Wurtzbacher confirmed that the
current estimate of the GMP is $60.5 million but reiterated that it will be rebid, and final plans will come forward to
the County. CFDP has committed to the County that it will not be more than $60.5 million. Commissioner Barfield
stated that the County is aware of the benefits it will receive from CFDP being involved in the project based on the
purpose-built government center recently constructed by CFDP. The new building will not only enhance the
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 771
streetscape but also blend with the ongoing downtown redevelopment. Due to the significant investments being
made downtown by Cape Fear Community College, the City of Wilmington, the County's refurbishment of 320
Chestnut Street, the Live Oak Pavilion project, and the riverwalk extension, the projects collectively are contributing
to an improved quality of life for both residents and visitors. He, along with Chair Rivenbark, grew up in the
community and has witnessed firsthand the transformative changes taking place in downtown Wilmington. He
explained the positive impact of libraries on the community and their versatility and provided a history of how the
library branches came to be what they are today in terms of success in the community. He commended the
community's strong commitment to libraries and noted the popularity of events like Storytime, particularly at the
purpose-built Pine Valley library. He emphasized the distinction between purpose-built libraries and renovated ones,
expressing his preference for the former. He drew parallels between the new government center and the proposed
project, envisioning it as another component of the ongoing downtown revitalization efforts. He believed that the
project, with its event spaces and terraces, would attract visitors and become a noteworthy downtown destination.
He also compared this potential project to the development of the Coastline Convention Center, which was the sole
event venue for a long time until the construction of a more upscale convention center expanded opportunities for
residents. He expressed excitement about the forthcoming redevelopment of Chestnut Street, including new
residences which will provide additional rooftops and create favorable conditions for items such as a downtown
grocery store, like those in Raleigh and Charlotte, such as the embedded Harris Teeter in downtown Charlotte. He
expressed his support for the project and his eagerness to witness its positive impact on the community.
Further discussion ensued about the project design. Mr. Brown explained that the plan is to still use the
solar panels as part of the canopy. He noted a recent law change from a public entity not being able to take advantage
of the tax credits because of not paying taxes to now being able to benefit from a rebate for the translucent solar
panels. Ms. Warmuth stated the number of solar panels being planned for will not be enough to generate electricity
for the entire building. However, there will be a net positive in terms of what the electrical costs would have been
for the facility. Regarding the language in the development agreement referencing 25% of the cost of construction
and renovation for the private development and if that was 25% of the $60.5 million, Ms. Wurtzbacher explained
that it is supposed to be 25% of all the improvements of the total block. The private side would have to be 25% of
the cost of the entire block, which at $30 million is more than the 25% requirement. As to the immersive theater,
she confirmed that the product to be installed can be utilized for more than a planetarium. She further confirmed
that the tax revenues, increase in property tax, and sales tax from the adjacent areas have not been calculated into
the figures at this point. This is strictly the property tax of $30.1 million. Commissioner Zapple stated that he would
support the approval of the request.
Chair Rivenbark thanked Ms. Wurtzbacher for the presentation, stating that the Board will now hear public
comments on the proposed development agreement. Each speaker will have three (3) minutes to provide
comments. The following individuals provided comments:
Mr. Brown stated he is joined by representatives of LS3P and Monteith to answer any Board questions.
CFDP approached the County last November and asked for an opportunity to independently review Project Grace.
It was determined by the County that the current library is housed in a 1950s structure and the museum in a 1930s
structure, and both were not purpose built for those uses. Buildings do not last forever, and it had been determined
that a library and museum solution in downtown Wilmington is critical to the community. The CFDP team felt it was
an important project and wanted to see it pursued here in Wilmington, which is their hometown. The team’s study
of Project Grace over the past six months has been a two-pronged effort, each component running in parallel with
the other. The team has been talking to basically everyone who was willing to talk to them to listen to their concerns
as well as listening to the public’s concerns. They have been workshopping new ideas throughout the community,
trying to understand specifically what the community wants out of Project Grace. At the same time, the CFDP team
has also been thoroughly evaluating the existing plans and project costs. The public outreach discussions have been
ongoing and will continue through the completion of the project. The project is a large undertaking and represents
a significant investment not only by the County taxpayers but in time invested by County staff, design consultants,
and local construction partners. Given that commitment, they wanted to make sure the community was behind the
project. The CFDP team has presented to numerous community groups and individuals on the history of Project
Grace and asked for their concerns, critiques, and encouragement, whatever the case may be. The groups that have
been engaged include numerous rotary clubs, chambers of commerce, Cape Fear Community College leadership,
leaders in the faith community, Genesis Block, Wilmington Business Development, Wilmington Convention Center,
the Historic Wilmington Foundation, African American Business Council, Wilmington Downtown Inc., and many
others. Discussions have also been held with literally hundreds of employers across the County, who represent an
employment base that numbers well into the 1,000s in terms of taxpayers and the sentiment across all groups has
been extremely positive. He thinks all groups agree that the library needs to be modernized and the museum is
lacking in its function and would gain a great deal from being downtown. In addition to presentations and meetings
with these groups, there have been numerous meetings and exchanges with Ms. Diana Hill, who represents the Save
Our Library Group. She has challenged them to revisit renovating the current library, which they did, and though the
conclusion reached is not the conclusion she and her group feel compelled to support the interactions have been
very positive. He stated he just wanted to publicly thank Ms. Hill for what has been a very respectful and positive
debate, which he thinks is lacking on a lot of issues in public discourse these days. Chair Rivenbark informed Mr.
Brown he was out of time.
Brian Eckel, representing CFDP, stated he would cede his time to Mr. Brown.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 772
Mr. Brown stated the team also evaluated the project and identified 27 areas of opportunities to reduce
costs in the project that equate to approximately $3 to $4 million in cost reductions. The plans are currently being
updated and will be competitively bid as mentioned earlier by Mr. Thomas and then the team will return before the
Board in July with the numbers. They are also proposing a $3.5 million floor for the purchase of the southern parcel,
which is $1 million higher than the previous floor, and then submit themselves to a two-appraisal process of which
they will pay the higher of the two appraisals provided they are within 5% of one another. Finally, CFDP is committed
to the greater of $30,125,838 on the southern parcel in terms of value or 25%, so 25% under the development
ordinance is more like $20 million. As such, the commitment of $30 million exceeds that by almost $10 million. As
someone who grew up in Wilmington, he is very proud to be before the Board today and to be involved with this
project. He and his team think this would be great for the community and CFDP does appreciate the Board’s time
and the consideration of the community.
Mr. Brown responded to questions about CFDP looking at taking the library down to the walls and rebuilding
it stating that the team looked at the Durham library which was a “renovation”. As with the Durham library, just to
meet modern code, basically the library’s structure must be taken all the way down to the concrete deck and then
the new building must be reconstructed on top of that. Renovation is a little bit misleading in that it would really be
a full reconstruction on top of the core concrete deck within the building, like what happened in Durham, and it
would also be an expansion of the facility. The use of the library would be lost for at least 24 months as with an old
structure, it is unknown what will be found until the construction team starts on it. There is also the risk of spending
public tax dollars on design and predevelopment work, demolishing the building back to the deck, and discovering
some hidden structural issues that could cause further cost escalations. Again, the team did look at it, priced it out,
and found that the solution on the northern parcel not only provides the ability to have the library be in continuous
service but the least costly option. Regarding the ability to use the brick as was done with the WAVE Transit facility
to maintain the historical nature, Mr. Brown stated that could be done.
Diana Hill, a resident of Klein Road, Wilmington, NC stated she would have liked to use part of her allotted
three minutes to address a statement made by Mr. Brown but proceeded to provide a review of the overall situation.
She criticized the decision to issue a Request for Proposal (RFP) that mandated the co-location and confinement of
the library and museum, believing it hindered developers from designing the best use of the property. Consequently,
only one developer, Zimmer, showed interest, but they were only willing to proceed if they could finance the project,
which would cost taxpayers an additional $20+ million. She also criticized the decision to amend the MOU in April
2021 to reflect the County paying $2.5 million for the plans if the proposed project was rejected by the LGC. The
plans that were purchased following the LGC's disapproval, were rendered ineffective and now, the new developer
is burdened by the restrictive RFP and the plans the County purchased. She acknowledged the positive aspect of
potential savings of approximately $20 million due to the involvement of a different developer who is not driven
solely by personal gain. However, she expressed concern that the proposed course of action would involve
abandoning an existing building to construct a smaller glass structure merely 100 yards away. She argued that this
approach would perpetuate the concealment of African American history, despite their significant presence in the
population prior to 1898 and their subsequent resilience in overcoming obstacles. She further criticized the plan to
use the valuable property at the Cape Fear Museum for research and storage, rather than utilizing it to enhance New
Hanover County's history. She also raised concerns about the potential limitations on downtown parking availability,
increased traffic on a major thoroughfare into downtown Wilmington, and other related issues. She urged the Board
not to shortchange residents and encouraged them to discard the existing plans to allow the new developers to
showcase their innovation and forward-thinking approach, as they have demonstrated throughout the community.
Chair Rivenbark informed Ms. Hill that her allocated time had expired. However, Ms. Hill continued speaking,
indicating that she had concluded her main remarks but wished to add that the high cost of renovating the
downtown brick library could be attributed to the desire to incorporate windows into the building. She urged the
Board to carefully consider its actions.
Laurel Taylor, resident of Brandon Road, Wilmington, NC stated she has been involved with Save Our Library
on Facebook since its creation. She recently had some out-of-town guests and went on local tours and the tour
guides stressed that Wilmington is a city that prides itself on its history and in its renovation and preservation it tore
off the pavement to reveal the brick below and keep everything looking historic. She asked why the Board is so
insistent on spending $60 million to tear down a serviceable library and build another destination block. Many
citizens have voiced an opinion that they do not need or want another set of shops, another downtown hotel, and
a token library and museum. They do not want the traffic, or the construction mess, and do not need all the tons of
material dragged off to some landfill in the state. There appears to be no answer as to why this project is a favorite
child.
Chris Boney with LS3P stated that it has been an honor to work on this project for the last several years
with the Board and staff. The staff has been exceptional and truly, the Board has one of the greatest staff anywhere
in the state if not the country. This project is a passion project. On behalf of his brother, Charles Boney, and the LS3P
design team, he stated it has been a great honor to work on it. The Cape Fear team has taken great pains to challenge
the LS3P team in ways that they were not before and really push for innovative solutions to find the best bang for
the buck for the taxpayers in this situation. They have uncovered and really dug very deep into the project along
with Monteith Construction, and he thinks what has come up is a great solution. He thanked the Board for its
consideration.
Hearing no further public comments, Chair Rivenbark closed the public hearing and opened the floor for
Board discussion.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 773
Hearing no further discussion, Chair Rivenbark asked if based on the discussion there was a motion to
approve the development agreement between Cape Fear Development Partners, LLC, and New Hanover County.
MOTION: Commissioner Barfield MOVED, SECONDED by Commissioner Zapple, to approve the development
agreement between Cape Fear Development Partners, LLC, and New Hanover County. Upon vote, the MOTION
CARRIED UNANIMOUSLY.
Chair Rivenbark stated that the staff is hereby directed to take any and all steps to finalize the development
agreement.
PRESENTATION OF THE FISCAL YEAR 2022-2023 THIRD QUARTER FINANCIAL RESULTS
Mr. Credle presented the following highlights of the Fiscal Year (FY) 2022-2023 third quarter, which includes
financial activity through March 31, 2023:
Third Quarter of FY 2023:
Overview:
Property tax rate per $100 of assessed value:
FY 2023 = 45.5 cents
FY 2022 = 47.5 cents
Property tax bills mailed in late July:
Payable by citizens without interest until January 5, 2023
Tax receipt peak period is December - January
Sales taxes:
Received in the third month following the sale:
July-December sales tax receipts were received prior to March 31, 2023 and are
included in the accompanying slide
January and February 2023 sales taxes were received in April-May 2023 and are only
reflected in the immediately following slide:
General Fund Revenues versus Expenditures:
Revenues of $302.6 million through March 2023 represent 80.9% of total budget (77.8% for prior
year)
Total expenditures of $273.6 million represent 67.0% of budget (70.7% for prior year)
General Fund Revenues:
Property tax revenue up slightly, even with the lower tax rate:
98.6% of budgeted property tax received (97.2% in the prior year)
Sales taxes up from $42.4 million in the prior year to $49.4 million in the current year:
56.9% of budgeted sales tax received (51.1% in the prior year)
Other revenues include Investment Income which amounts to $5.8 million 2023 versus $1.7 million
in the prior year:
Partially offset by lower Intergovernmental Revenue
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 774
General Fund Expenditures:
Total expenditures of $273.6 million represent 67.0% of the budget (70.7% for the prior year)
Most functions’ actual expenditures are higher than the prior year due to an increase in their
budgets
Debt Service Fund Revenues and Expenditures:
Total revenues collected of $48.5 million, or 83.9% of the budget (82.2% in the prior year):
Revenues are primarily property tax and sales tax allocations
Expenditures represent actual debt payments
Transfers from General Fund bridge any gap
Recycling and Solid Waste:
Fund runs under a stand-alone business model:
Fees for services comprise substantially all revenue
Increase in tipping fee has been partially offset by lower tonnage:
287,288 tons in 2023 versus 289,302 in 2022
Revenue of $13.0 million fiscal year to date is lower than the prior year amount of $14.1 million:
Prior year includes $1.7 million in hurricane grants
Expenditures year to date of $15.1 million versus $17.9 million in the prior year:
Capital project expenditures down $4.7 million from the prior year
Fire Services:
Total revenues of $18.0 million through March 31, 2023 represent 89.2% of the budget (79.1% in
the prior year)
Revenues are primarily property tax and sales tax allocations
Total expenditures of $15.8 million, or 76.5% of the total budget (71.4% in the prior year)
Stormwater Services:
First full year of this fund running under a stand-alone business model:
First year of the full fee being charged
Fee is included on property tax bill:
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 775
Revenue is front-loaded, whereas expenses occur throughout the year
96.5% of the total fee budget has been collected through March 2023
Expenditures of $3.1 million year to date versus $2.5 million in the prior year:
66.1% of the total budget in the current year versus 63.7% in the prior year
American Rescue Plan Act (ARPA) Fund:
$45.5 million received in total
$25.8 million spent to life to date:
$8.1 million spent in the first nine months of FY 2023:
Primarily on physical and mental health initiatives
Substantially all the remaining funds have been earmarked and will be committed by 12/31/24
Other:
Investment Portfolio:
Unrealized losses amount to $30.4 million at 3/31/23:
$4.3 million higher than at 6/30/22
$6.8 million improvement versus 12/31/22
Due to interest rate increases
Investments that are included in unassigned general fund balance have improved by
$139,000 since 6/30/22
Credit risk remains sound (no commercial paper holdings)
Will result in unrealized losses reversing and recognized as earnings as the investments
approach maturity
Investment income through 3/31/23 = $5.8 million versus budget for total year of $2.6 million:
Expected to result in favorable variance at 6/30/23 of $6+ million
Mr. Credle responded to questions stating that as the County has met its budget for debt service, the fourth
quarter collections would remain in the debt service fund and be set aside for the next year. As to the eventual
closure of the landfill, there will need to be careful planning around closure costs, and he understands that the staff
does not need to wait to start planning for the landfill to close.
Hearing no further discussion, Chair Rivenbark thanked Mr. Credle for the report.
PRESENTATION OF THE FY 2023-2024 RECOMMENDED BUDGET AND FY 2024-2028 CAPITAL IMPROVEMENT PLAN
County Manager Coudriet presented FY 2023-2024 Recommended Budget and FY 2024-2028 Capital
Improvement Plan (CIP) for New Hanover County (NHC) highlighting the following:
Recommended budget framework:
Priorities set by the Board through its adopted strategic plan and actions:
Superior Education and Workforce
Intelligent Growth and Economic Development
Superior Public Health and Safety
Community and Social Equity
Good Governance
Revenue parameters set by the Board through plan and policy:
Minimize impact on taxes and fees
Maintain fund balance position within policy goal of 18-21%
Ensure good stewardship of the Revenue Stabilization Fund (RSF)
Spending recommendations for major funds:
All funds: $590.8 million
General Fund: $444 million
Fire Services District fund: $36.2 million
Stormwater Services fund: $4.9 million
Recycling and Solid Waste: $25.5 million
Tax rates:
No change
General fund tax rate of 43.1 cents dedicated to the General Fund:
2.4 cents dedicated to the Debt Service Fund
Proposed FY24 rate: 45.5 cents
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 776
Fire Services:
No change from FY 22-23 adopted rate
Proposed FY24 rate: 7.25 cents
Fees:
No change
Stormwater Services:
Fourth year of service in the unincorporated county
Second year full fee charged to residents
Proposed FY24 fee: $5.65/ equivalent residential unit (ERU)/month
Recycling and Solid Waste:
$2 surcharge for the State of North Carolina
$2 surcharge for interfund loan payback
Proposed FY24 fee: $52/ton
General Fund revenues:
Ad valorem: $229.2 million:
Tax base: $50.6 billion (3.55% increase)
Ad valorem rate of 45.5 cents ($0.431 General Fund, $0.024 Debt Service Fund)
Value of penny: $5,036,969
Sales taxes: $116.2 million:
Assumes no growth over FY23 year-end estimates, compares to 6.5% growth over FY22
year-end projection for FY23 adoption
Currently collected 8.2% over FY23 budget estimates
Fund Balance: $5.8 million:
Uses a portion reserved for future capital projects and capital outlay, above the 21%
policy limit
All uses are one time money for one-time or time limited expenses
Mental Health and Substance Use Fund: $5.3 million (initial spend - consistent with Board-
approved strategy):
Interest: $2.1 million
Principal: $3.2 million
Revenue Stabilization Fund: $9.9 million (all interest):
$6.5 million (community building)
$3.4 million (replace portion of lost revenue from FY23 tax cut)
Historical Tax Base:
Historical Tax Rates:
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 777
General Fund Sales Taxes:
General Fund Expenditures:
New Hanover County Schools:
Assumes 27,432 students across the traditional k-12 system and charter schools
Total appropriation: $129.1 million
29.1% of General Fund budget
Transfers between purpose/function of 10% or greater will require Board approval
Historical school funding comparison:
Historical funding per pupil (ADM Rate):
Cape Fear Community College (CFCC):
Operating: $12.4 million (8.9% increase)
Capital: $1.9 million (-8.0%)
Debt Service: $10 million (-3.1)
Total: $24.4 million (2.2% increase)
General Fund strategic enhancements:
Superior Education and Workforce:
Northchase Library construction: $8.4 million
Additional NHCS Capital: $6 million
CFCC Capital: $1.9 million + new nursing building purchase and renovations
Good Governance:
Technology advancements - $1.2 million:
Customer and professional services
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 778
Cybersecurity and ransomware protection
Intelligent Growth and Economic Development:
Various Park improvements - $8 million:
North and South College Road Trails
Smith Creek Park
Echo Farms expansion
Gordon Road Sidewalk/Trail
Trails End Pier/Kayak Launch
Ogden Park Playground replacement
Regarding questions about the cost estimate for the connection between Monkey Junction and Pleasure
Island, County Manager Coudriet stated there is not a need to pass a quarter-cent sales tax because of the existing
Cross-City Trail, along with the Board’s priority of Monkey Junction north, staff felt it was possible to attain
pedestrian connectivity from Fort Fisher to Riverside Park in Castle Hayne. It was imagined that the Monkey Junction
south portion including the buildout of some systems in Carolina Beach and Kure Beach, would have come through
the quarter-cent sales tax. The quarter-cent sales tax did not pass and based on discussions with the Board, staff will
find a way in future CIPs to make that a priority. He noted that part of the quarter-cent sales tax was to help both
beach towns with the maintenance of the greenway trail and building it to Monkey Junction.
Superior Public Health and Safety:
Health and Human Services - $1.3 million:
17 full-time positions, Medicaid Expansion, Mental Health and Substance Use
Strategy, and Public Health professional services
Public Safety - $2.7 million:
Range replacement and equipment storage, 911 ethernet conversion, Emergency
Services Communications Coordinator, and Public Safety Technology Supervisor and
professional services
Non-County Agencies:
Social Impact funding ending FY23
Vendor status: one (1) program transitioned to vendor status in FY23 - $13,500
Non-County Agencies – Human Services:
County Manager Coudriet stated that the Bread for Life Senior Panty program transitioned to vendor status.
He requested that Non-County Agency Funding Committee (NCAFC) member Clare Kiley present the information on
the NCAFC’s recommendation. Ms. Kiley provided the following overview of the process and recommendations:
NCAFC committee members: Shane Hartley, Buddy Brooks, Elizabeth DeBiasi, Gail Eddie,
Randy Reeves, and Clare Kiley
Committee steps to improve process:
Modify applications based on key learnings
Provide training to non-county agencies on application and process
Survey non-county agencies
Review Process:
Read/review applications
Review of agency mid-year performance reports and funding history
Discuss appropriate bucket and scoring rubric
Individual scoring and questions to agencies
Question responses and final aggregated scores
Discussion and allocation decisions
Scoring Rubric, seven scoring categories:
Alignment with New Hanover County strategy and goals
Request aligned with agency mission
Request aligns with agency capability
Collaborative efforts associated with program/service
Impact of program – multiplier
Demonstrated impact of program – outcome
Degree augments or fills a New Hanover County gap in service
Evaluation:
Programs scored individually by committee members and aggregated
Discussion about areas of difference in scoring and key drivers
Approximately 100 hours of committee time spent on the process
Objective rating instrument/rubric:
Seven pre-identified criteria
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 779
Each criterion scored on a four-point scale
Equally weighted (max score 28)
Subjective Rating:
Overall rating that allows committee to capture other attributes not easily
quantifiable or that may not be broadly applicable
Scored on a four-point scale (max score four)
Fund this:
Organizations that deliver a program or service
Supplies, tools, contract services, and other materials for staff to deliver programs
Salaries for staff directly providing services to clients/patients/participants, etc.
Not that:
Intermediaries/pass through organizations (receive funding and then redistributing
it to other organizations)
Marketing money
Capital expenditures (buildings/vehicles)
Administrative salaries/administrative overhead
Funding Recommendations:
Tier 1 recommendations:
Tier 2 funding recommendations:
Tier 3 funding recommendations:
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 780
Totals:
*Eligible Funding – Items requested for funding that are ineligible have been deducted such
as salaries for positions and overhead expenses not directly tied to service delivery, marketing,
and pass throughs
Next Steps:
Survey non-county agencies re: process; incorporate feedback into FY24 process
Modify non-county agency application based on key learnings
Review scoring rubric and consider changes to evaluation criteria
Continue training for non-county agencies on the application process and in-year
reporting
Set due dates and calendar for FY25 process
Ms. Kiley responded to questions stating that the committee understood that the Board wanted all the
funds allocated but a decision was made to be as equitable as possible in how the funds were distributed amongst
the applicants. The funding tiers were set at 90%, 75%, and zero funding based on the committee’s evaluation of the
applications. Again, the committee’s goal was to be equitable in the distribution of the funds.
Discussion ensued on how the allocation determinations were made and the amount of funding available
for FY24. As to how the $1.5 million budget was determined, County Manager Coudriet stated there are general
parameters that are set year in and year out. Staff do their best to model what the prior year adopted amount was
and view that the Board does not set the cap, but the allocation when it adopts the budget. Based on that, staff feels
it is a prudent course because the Board included $1.2 million in capacity building in the same fiscal year for perhaps
some of the same nonprofits. If accepted by the Board, the $1.2 million will continue to be repeated on an annual
basis. He further confirmed that the $1.2 million were grants that were funded by the County and released by United
Way. Ms. Kiley stated that each year the committee has a lot of discussion about how to improve the process. There
is no perfect grant application, and no organization says the application form is completely perfect. The NCAFC
members are very open about looking at changes and improving the application so that questions are answered.
Discussion has been held about having larger organizations mentor the smaller organizations that do not have a
person on staff with expertise in grant writing. She thinks some organizations might be willing to do that, which is
why collaboration was a big part of what the NCAFC looked at to see what has been done in terms of outreach.
County Manager Coudriet responded to questions confirming that in accordance with state law, the Board
will have to go through the recusal process to excuse each board member from deliberation and voting on
appropriations and expenditures for the non-county, economic development, and social impact agencies due to a
conflict of interest. Staff will help the Board work through the unwieldy process.
Economic Development Agencies:
$197,652 for year three of a three-year plan to the Greater Wilmington Chamber of Commerce
for business retention, expansion, and recruitment
$292,782 for Wilmington Business Development
$100,000 for Wilmington Downtown Inc.
$154,752 for the Wilmington Regional Film Commission
$100,000 for the Arts Council of Wilmington and New Hanover County
Recycling and Solid Waste Fund:
Revenues:
$52 per ton tipping fee (includes $2 state surcharge): no increase
$48 per ton from FY17-18 to FY21-22
FY23: $2 to repay General Fund loan + $2 new litter program
Expenses:
Total budget: $25.5 million
Capital projects: $8 million
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 781
Capital outlay: $2.3 million (vehicle and equipment replacements)
Fire Services District Fund:
Revenues:
Recommended tax rate: no change
7.25 cents per $100 of value
Expenses:
Total budget: $36.2 million
Capital projects: $15.5 million (Castle Hayne + Gordon Road Fire Station)
Capital outlay: $1.5 million (engine, vehicle replacements, and equipment)
Stormwater Services:
Revenues:
Annual $67.80 Stormwater Fee: ($5.65/ ERU/month)
No change in fee
Expenses:
Total budget: $4.9 million
Capital outlay: $1.3 million (equipment and other improvements)
Fourth year of stormwater program in unincorporated county
Second year of the full fee charged to residents
Community Building Initiative:
Funding plan initially adopted January 2022
FY24: second full year of operations
13 programs/initiatives across four priorities
$11.8 million spending plan
Funding sources:
ARPA funds: $3.9 million
Escrow funds: $6.5 million (interest only)
Fund balance: $1.4 million
Mental Health and Substance Use Disorder Strategy:
Strategy adopted September 2022
FY24 - first full year of operations
10 programs/initiatives across three priorities
$9.2 million spending plan
Funding sources:
Opioid Settlement Funds - $1.5 million
Escrow Funds - $5.3 million
Donations/Grants - $2.4 million
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 782
Personnel recommendations:
General Fund: 25 new full-time:
Five dedicated to Mental Health and Substance Use Disorder Strategy
Stormwater Services: one new full-time position
Recycling and Solid Waste: three new full-time positions
$2.5 million salary lag
FY23-24 Recommended Budget in summary:
General and Debt Service Funds:
No change to Property Tax Rate - FY 24 recommended at an assessment rate of 45.5 cents:
43.10 cents for the General Fund
2.40 cents for the Debt Service Fund
Fire Rescue: no change – FY24 recommended at 7.25 cents
Recycling and Solid Waste: no change to tip fee - FY24 recommended at $52/ton
Stormwater Services: no change - $5.65 per ERU/month
Doing what we do better: enhancements concentrated on operational performance,
personnel enhancements focused on Public Health and Safety
Invests in greatest asset, our people: implementation of third-party pay study
recommendations and cost of living adjustment to match Consumer Price Index (CPI)
Investments for growth: Last Frontier infrastructure, North Chase Library, two fire stations
Implementation of Mental Health and Substance Use Disorder Strategy: The Healing Place,
Robin Hood, multiple substance use and mental health programs, mental health clinicians
Continued emphasis on community building: $11.8 million in total - $1 million for career and
technical certification programs added, $1.4 million for boarding school
Continued strong support of education:
NHCS - $129.1 million (6.3% increase), plus school resource officers, school nurses, mental
health therapists, and teacher incentives
CFCC - $24.4 million (2.2% increase), plus $3.6 million in renovations to the recent county-
purchased building
Helping the community/partners: two CFPUA clean water initiatives, Tourism Development
Authority, WAVE, economic development, non-county agency funding, capacity building
grants
FY23-24 Recommended Budget in summary - $590.8 million total spending:
Next Steps:
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Public hearing scheduled for Monday, June 5
Board debate and direction to staff
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Budget adoption between Monday, June 5 and Monday, June 19
County Manager Coudriet responded to questions confirming that the Senior Resource Center (SRC) new
roof cost would be $500,000. When the renovation was done, the condition of the roof did not suggest a
replacement was necessary. Time has proven that there is rot that needs to be addressed. Ms. Warmuth stated the
SRC roof has a severe overhang that provides a covered walkway at the front entrance. She reiterated that when the
renovation of the facility was done a couple of years ago, the roof was in perfectly good condition. The design should
be completed this week. Due to having to remove the roof, the plan is to build it up to open it up a bit more and
allow more natural light through the windows.
In response to questions on employee compensation, County Manager Coudriet explained that for full-time
employees, the pay and classification study recommends a 4.7% increase on average, but no one will receive less
than 1.25%. There is also a recommendation of a 5.5% CPI. Part-time employees’ wages would also be addressed. If
the Board accepts the recommendation, the minimum living wage would be $17 per hour. As to the 20% reduction
in Public Safety, there are likely significant capital items (one-time costs) across Public Safety that are not necessary
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 783
to be carried forward in the new year. He noted that Public Safety includes a collection of departments, including
Building Safety. The continuation budget funds are not being taken out of Public Safety. As to the County’s
contribution to Trillium, the overall appropriation did not go up to bring The Healing Place online. The Board and
Trillium’s governing board agreed that with the current appropriation, the amount of debt service could be
redirected from Trillium into it, which is what is reflected in the recommended budget. It is the same amount of
contribution but more because of buying beds and it is in support of The Healing Place.
Regarding questions on the rate reduction subsidy, County Manager Coudriet stated that he thinks that the
subsidy this year of $3.4 million is illustrative of the fact that organic growth is increasing because it should be $10
million. As the base continues to grow, he suspects next year the subsidy will be less or none. When the Board agreed
to cut taxes, it did not direct a reduction in spending because it still wanted to present the same policies and the
new things it directed be done. The County is trending in the right direction to not use interest.
A general discussion ensued about the need to increase efforts to educate the public on what the County
does in terms of school funding and about the teacher fellowships it funds every year. Commissioner Barfield stated
that he would like the Future Teacher Scholarship Signing Ceremony to be held at a Board meeting.
County Manager Coudriet responded to questions stating that there would be two public hearings; one for
economic development and economic incentive appropriations and one for the recommended budget. He further
stated that staff would provide the Board additional information on what the County funds beyond the $129 million
for current expense, capital, debt service, and pre-k classrooms for the school district.
Hearing no further discussion, Chair Rivenbark thanked County Manager Coudriet for the presentation.
COMMITTEE APPOINTMENTS
Appointment to the Lower Cape Fear Water and Sewer Authority
Chair Rivenbark reported that one vacancy exists on the Lower Cape Fear Water and Sewer Authority with
one applicant eligible for reappointment and three applicants eligible for appointment.
Commissioner Scalise nominated Harry M. Knight for reappointment. Commissioner Zapple seconded the
nomination.
Hearing no further nominations, Chair Rivenbark called for a vote on the nomination on the floor.
Vote Results: The Board voted UNANIMOUSLY to reappoint Harry M. Knight to the Lower Cape Fear Water and
Sewer Authority with the term to expire May 31, 2026.
Appointments to the New Hanover County Commission for Women
Chair Rivenbark reported that three vacancies exist on the New Hanover County Commission for Women
with one applicant eligible for reappointment and nineteen applicants eligible for appointment.
Vice-Chair Pierce nominated Sheila Evans for reappointment as well as Lindy Ford and Tracey Newkirk for
appointment. Commissioner Scalise seconded the nominations.
Commissioner Zapple nominated Jillian Hopman.
Hearing no further nominations, Chair Rivenbark called for a vote on the nominations on the floor.
Vote Results: The Board voted UNANIMOUSLY to reappoint Sheila Evans to the New Hanover County Commission
for Women to serve a three-year term with the term to expire May 31, 2026.
Vote Results: The Board voted in the majority to appoint Lindy Ford to the New Hanover County Commission for
Women to serve a three-year term with the term to expire May 31, 2026. Chair Rivenbark, Vice-Chair Pierce,
Commissioner Barfield, and Commissioner Scalise voted in favor.
Vote Results: The Board voted UNANIMOUSLY to appoint Tracey Newkirk to the New Hanover County Commission
for Women to serve three-year terms with the terms to expire May 31, 2026.
PUBLIC COMMENTS ON NON-AGENDA ITEMS
Chair Rivenbark stated that one person signed up to speak on non-agenda items and invited the person to
make remarks.
Gail Major, a resident of Canal Drive, expressed her concerns about a grievance filed against the school
district about books that are allowed to be accessed by pre-K to grade 12 students as well as its individualized
education program (IEP). She does not feel children in the IEPs are being taught by federally mandated and correctly
trained teachers.
ADDITIONAL AGENDA ITEMS OF BUSINESS
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35
REGULAR MEETING, MAY 15, 2023 PAGE 784
Commissioner Barfield stated that the County Commissioners have no jurisdiction over the New Hanover
County Schools Board of Education (BOE). He encouraged the public comment speaker to have a conversation with
the BOE, as it is an elected board, regarding her issues. As noted earlier during the recommended budget
presentation, the Board has no ability to determine outside of function and purpose, how funds are moved around
within the school district budget.
Commissioner Scalise stated that he wanted to reiterate that the recommended budget does not include a
tax increase of any kind.
ADJOURNMENT
There being no further business, Chair Rivenbark adjourned the meeting at 12:04 p.m.
Respectfully submitted,
Kymberleigh G. Crowell
Clerk to the Board
Please note that the above minutes are not a verbatim record of the New Hanover County Board of Commissioners meeting. The
entire proceedings are available online at www.nhcgov.com.