Loading...
2024-03-14 Budget Work Session NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 142 ASSEMBLY The New Hanover County Board of Commissioners held a Budget Work Session on March 14, 2024 at 1:33 p.m. in Conference Rooms 138-139 at the New Hanover County Government Center, 230 Government Center Drive, 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; Clerk to the Board Kymberleigh G. Crowell; and County Attorney K. Jordan Smith. Chair Rivenbark called the Budget Work Session meeting to order stating the purpose is for the Board to discuss Budget Priorities for the 2024-2025 Fiscal Year. FISCAL YEAR (FY) 2024-2025 BUDGET WORK SESSION PRIORITIES DISCUSSION County Manager Coudriet opened the meeting, stating that what is being presented today are department requests. The information being shared is not what is being recommended in this part of the process. Chief Financial Officer Eric Credle shared the following information concerning the FY 2024-2025 budget:  FY24-25 Budget Work Session:  Agenda:  Five year Capital Improvement Plan (CIP) - General Fund:  Enterprise and Special Revenue Funds: Stormwater Services, Recycling and Solid Waste, and Fire Rescue  Opioid Settlement Funds  Five year CIP - General Fund:  General characteristics:  Fixed asset with a useful life greater than five years  Cost of $100,000 or more  Requires more than 12 months to complete  Process:  CIP Committee evaluates capital improvement project requests:  FY25-29 Capital Improvement Projects - General Fund: Mr. Credle, in response to questions, stated that the County received a $3.7 million grant for the Robin Hood facility, which should be received between May and July. The remaining portion is being funded by RHA Health and Leading Into New Communities (LINC) and operational funding is supported through Trillium, so the County is not accounting for any of those funds. The County will own the building, LINC will lease it from the County, and LINC will sublease appropriate parts to RHA Health. Chief Facilities Officer Sara Warmuth responded to questions stating that the Request for Qualifications (RFQ) process began in 2023. The design has taken about a year with all the approvals needed through the state. A brief discussion ensued regarding the Northside grocery store. Ms. Warmuth stated that the County will own the facility on land donated by the City of Wilmington (City). Construction management will be managed by County staff like other County projects. County Manager Coudriet stated in response to questions that the County’s appropriation is limited to $2.5 million. Ms. Warmuth added that a contractor has not yet been selected and if the forthcoming Memorandum of Understanding (MOU) receives Board approval, the RFQ will go out for the architect. A brief discussion ensued regarding several other projects on the CIP. Due to state grant funding, Mr. Credle stated that the Cape Fear Community College (CFCC) nursing facility renovations will be removed from the next CIP. CFCC will receive the grant funds and pay the County for the building and the renovations. Ms. Warmuth stated that NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 143 the North Chase Library plans are akin to Pine Valley Library but will differentiate because of the site. Regarding the Blue Clay Business Park, installation of the water and sewer lines along with the stormwater infrastructure is ongoing, and work is slated to be completed in May. A site has not been identified for a senior resource center in the northern part of the County.  FY25-29 Capital Improvement Projects - General Fund continued: Discussion ensued regarding various park projects. Parks and Gardens Director Tara Duckworth stated a water source has been identified for the Northeast Regional Park. However, extending water and sewer service from/to the Blue Clay Business Park to the park will not be possible. The plan is to connect the park to water and sewer services if it becomes available later. A brief discussion covered different trails and associated connections. The County has been collaborating with the North Carolina Department of Transportation (NCDOT) to set up a traffic signal outside Laney High School for the students crossing to go to McDonald's and to construct sidewalks. The design phase for the North College Road Trail is underway and should wrap up by June 2024, with hopes to start construction in fall 2024. This trail will stretch from the North Chase Library to the Gordon Road sidewalk. The South College Road Trail will extend from the end of the City’s trail at College Road and 17th Street Extension to Monkey Junction along College Road's west side. She reported that the County plans to apply for a grant for the South College Road Trail through the Wilmington Metropolitan Planning Organization (WMPO) when the application period opens in fall 2024. The Masonboro Loop Road Trail will continue from where the City’s trail stops at Trails End, extend to Piner Road, and link up with the South College Road Trail. A brief discussion covered the sale of the Holly Tree Racquet Club and the potential for the County and City to acquire it to provide more pickleball courts. Ms. Duckworth stated the club’s courts are not in the best shape. Discussion ensued about the potential improvements needed by the Holly Tree Racquet Club and the difference between clay and hard courts. The staff reported that they have not conducted any analysis or held discussions with the City about the club. County Manager Coudriet suggested that if increasing pickleball facilities is a priority for the Board, it might be achievable through other ongoing projects. Ms. Duckworth reported that the County oversees 17 parks covering more than 1,600 acres with a team of about 70 staff members. Regarding debt service for parks, Mr. Credle stated that a parks bond has not been considered. The plan does consider limited obligation bonds (LOBs) to fund the parks throughout the CIP, which do not require voter approval. County Engineer Tim Lowe presented the Stormwater Services performance report and rate update as follows:  Stormwater Services performance report and rate update:  Background:  Established in December 2019 (FY20): the rate was calculated in 2018 and approved at $5.65/month/equivalent residential unit (ERU)  Began operation in July 2020 (FY21): no fee was collected due to COVID-19, and work was completed utilizing Emergency Watershed Protection (EWP) grant money resulting from Hurricane Florence  Staff and equipment added in July 2021 (FY22): the $5.65 rate was partially offset due to American Rescue Plan Act (ARPA) funds awarded to the County and as a result, the rate that was collected was $1/month/ERU  Began full rate collection at $5.65/month/ERU in July 2022 (FY 2023)  Performance:  Maintenance:  More than 120 miles of ditches and creeks; anticipated to be over 150 miles at end of fiscal year  More than 250 resident-generated maintenance projects have been completed  More than 900 citizen calls were responded to and investigated  Capital projects: more than 4,000 feet of pipe replaced and completed 13 CIP  Additional program improvements:  Watershed mapping:  Nearly 300 miles of streams, creeks, and ditches have been mapped:  Close to 50% of open channel infrastructure in the unincorporated County  Close to 200 miles of the mapped open channels are classified as eligible for maintenance by New Hanover County. It is estimated that we have captured NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 144 approx. 67% of the open channel infrastructure eligible for maintenance by New Hanover County.  Approximately 25 miles of pipe systems:  Estimated to be <10% of pipe that exists in the unincorporated County  Salesforce and asset essentials: transition from paper records to database records integrated with GIS mapping tools for infrastructure, work order management, and resident case management  Shift from reactive to proactive: developing preventative maintenance schedules, developing CIP, and stream gauge program  Watershed planning:  Tributary watershed to Everette’s Creek (Hanover Pines and Country Place)  Acorn Branch (tributary to Smith Creek)  Pumpkin Creek (tributary to Prince George Creek)  Awarded grants:  EWP and Streamflow Rehabilitation Assistance Program (StRAP) funding through coordination with County Soil and Water Conservation  Local Assistance for Stormwater Infrastructure Investments Program (LASII) funding through the North Carolina Department of Environmental Quality (NCDEQ)  Identified infrastructure needs:  More than 80 pipe failures and ditch capacity/grading projects have been identified to date. Projects are estimated at less than $25,000 in materials/supplies to complete the project  More than 60 major capital improvement projects have been identified to date:  Projects will need engineering and permitting prior to construction  Average estimated project costs are $200,000  Staff expects the list to grow  Financial analysis:  Current estimated revenues = $4,242,585 (based on $5.65/month/ERU and 62,575 ERU’s)  White Road = $0.23/month/ERU increase (based on $840,000 borrowed from the General Fund to be paid over a five year term)  Inflationary costs = $0.26/month/ERU increase beyond increase to account for the White Road project:  Based on 2% inflation over five year period and 1.5% ERU growth  Barring unforeseen circumstances, $0.26 is intended to cover inflation until FY 2030  Lump sum increase, revenue numbers indicate FY 2025 estimated revenue:  FY25 Budget estimate - $4.4 million: Discussion ensued regarding inflation. Mr. Credle stated that inflation is up 19.5% since 2021. Mr. Lowe reported that the City’s stormwater fee is over $8 and there is a proposal for an increase of 1% with a recurring 1.5% increase each year thereafter. A brief discussion ensued regarding future projects, the department’s capacity to continue the much needed work, and the requested office renovation. Mr. Lowe stated that his staff is in the old HVAC building on Division Drive. Ms. Warmuth confirmed that the existing building needs additional space for Mr. Lowe’s team to work. Recycling and Solid Waste Director Joe Suleyman presented the following information:  Recycling and Solid Waste:  Department overview:  The department has five divisions: landfill, household hazardous waste (HHW), recycling, litter management, and administration  37/41 county employees (including one benefits-eligible part-time EE) NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 145  Managed 3,100 tons of recyclables, 400 tons of household hazardous waste, 4,450 tons of scrap tires, and over 412,000 tons of municipal solid waste (MSW)  Award-winning compost, wastewater treatment, and household hazardous waste programs  Department challenges:  Skyrocketing costs for cell construction, cell closure, and heavy equipment acquisitions. Increases have been in the approximate 40% range  Population impact: current disposal rates reflect a 179% increase in tons and a 253% increase in traffic count over ten years ago (FY13) and tipping fee waivers during that same period increased by 950%  Tip fee waivers accounted for $706K in annual expenses, an additional $287K expense is for county trash/recycling services, and in short, $993K (or $2.50 of the tip fee) goes towards free services Discussion ensued regarding tipping fee waivers and recycling. Mr. Suleyman reported organizations that receive waivers include New Hanover County Schools (NHCS), any 501(c)(3) organization, County construction projects, and the Azalea Festival. The County has not expanded eligibility for tipping fee waivers, and he offered to provide a report on tipping fee waivers for the current year. He explained how recycling costs fluctuate like gas prices and many costs involve the recycling processes. Due to market fluctuations, annual recycling revenue ranges from $4,000 up to a cost of $20,000. Mr. Suleyman explained that 15% of his time is spent educating the public on recycling and that it is a school district policy decision on whether there is recycling at school facilities. Ms. Warmuth stated that the County does offer recycling at its facilities. Extensive discussion ensued regarding the remaining life of the landfill. Mr. Suleyman reported on solutions being researched, noting that one is landfill mining and that the first cell of the landfill is an area where the theory might be assessed. The County may be able to extend the landfill's life by recovering metals and other materials, starting with mining the initial cell.  Department strengths:  Department is highly innovative; many of the department’s initiatives are used outside of NHC as “best practices” when developing new regulations and initiatives  Experienced supervisory and technical staff, including talented Environmental Specialists, and front-line employees are cross trained to increase operational flexibility, and develop bench strength  Strong support from the local community for services offered  FY24 Tip Fee - $52/ton which includes a $2 state surcharge:  Recycling and Solid Waste - Capital Improvement projects:  FY25 projects are slated to be funded with transfers and reserve funds Mr. Suleyman responded to questions regarding the recycling contract with Sonoco, stating that by statute the County must go out to bid because it will have met the ten-year limit at the end of the current extension. However, that does not preclude Sonoco from being the lowest bidder, potentially leading to a new contract. He also discussed the disruption that will happen when a change is made.  FY25 Enhancement requests:  Staffing:  Benefits-eligible part-time employee (Environmental Technician)  Benefits-eligible part-time employee (Fiscal Support Technician/Weighmaster)  Capital equipment: waste shredder ($1.14 million)  Fee schedule revisions: safety vest charge, banned material charge, and tire disposal charge increase  FY25 Budget summary:  Approximately $29 million annual budget  The current proposed budget is nearly balanced, with an anticipated surplus (based on pending updates to insurance, interest revenue, salary & fringe adjustments, etc.) NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 146  No proposed tip fee increase: base tip fee maintained at $52.00/ton (including the $2/ton solid waste tax)  Closure and post-closure:  Establish a stand-alone, restricted post-closure fund:  Currently, this approximately $75 million long-term liability is unfunded  Existing closure/post-closure fund is seeded with $1.14 million annually  Available funds are used to offset costs of closure projects  The “post-closure” period begins when the site no longer can accept waste  Zero revenue during the 30-year post-closure period  Options: Discussion ensued regarding the closure/post-closure fund and ways to pay for closure/post-closure. County Manager Coudriet stated that appropriating $2.5 million beginning in 2050 for closure/post-closure would be attainable, although he is not prepared to make a recommendation either way. As to tip fee reductions, a discussion ensued about how the last tip fee reduction did not affect the average citizen's trash bills, whereas the $2 increase two years prior significantly increased them, mainly benefiting haulers. Regarding landfill gas collection, the project is still in the site work phase. As to the revenue for the landfill gas project, there may be slight differences per year as to the revenue. Unless the County radically changes the amount of trash it takes in each year or if the composition of the waste changes dramatically, the revenue difference will be negligible from the projected amount. Commissioner Scalise expressed his desire for the County to develop the closure/post-closure strategy sooner rather than later. County Manager Coudriet agreed but noted that it did not need to be done before June 30, 2024. Chief Donnie Hall of New Hanover County Fire Rescue presented the following information:  Fire Rescue FY25 Budget update:  FY24 adopted budget:  Total expenditures - $21.5 million  132 positions  Eight fire stations throughout the County  Provides fire protection and rescue services mainly in the unincorporated areas of New Hanover County  FY25 tax rate - 7.25 cents:  No increase  Tax base estimate $19.9 billion – up from $19.4 billion  2.41% increase from FY24  Generates about $338,000 in additional revenue  FY25 estimated sales tax - $5.5 million (1% growth over FY24 Budget)  FY24 and FY25 budgets – Approximately $22-$23 million  Capital improvement: There was a brief discussion regarding the County owned facilities. Chief Hall explained that long term leases are in place for the facilities the County does not own, and they automatically renew each year. Vice-Chair Pierce expressed concerns about the County not owning the stations. County Manager Coudriet suggested the County could explore purchasing the stations if the Board desires. He noted most stations are appropriately located, and a new Castle Hayne station is being constructed in the appropriate area. He further explained in response to questions that LOBs would be used to issue debt for the projects that are part of the CIP, and the County is looking at going to the Local Government Commission (LGC) to issue debt in the fall. Mr. Credle and Chief Strategy Officer Jennifer Rigby presented the FY25 opioid settlement fund recommendations from the committee:  Opioid Settlement Funds - Joint Elected Committee recommendation:  Result of lawsuits by state and local government versus responsible parties (distributors, pharmacies, manufacturers)  NC allocation of settlement funds is 85% to local governments (Only two other states have a percentage that high)  Settlements: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 147  Wave 1 settlements – July 2021 – $26 billion:  Primarily distributors: McKesson, Cardinal Health, AmerisourceBergen  Allocations: New Hanover County - $18.7 million and City of Wilmington - $0.8 million  Payable over 18 years  Wave 2 settlements – December 2022 – $21 Billion:  Primarily pharmacies: CVS, Walgreens, Walmart  Allocations: New Hanover County - $15.2 million and City of Wilmington - $0.6 million  Payable over 15 years  Additional negotiations ongoing: McKinsey, Mallinckrodt, Endo, Purdue, Kroger  Potentially $3 million to the County/City  Payment schedules:  Projected cash flow:  FY25 Opioid Settlement Fund recommendations:  Mental Health and Substance Use Disorder Strategic Plan:  Data: 2021-2023:  Opioid Settlement Fund: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 148  Program/initiative: Tides, Inc.  Recommending organization: New Hanover County  Funding request: $350,000 recurring  Description: Tides, Inc., is a North Carolina non-profit corporation which was established on October 10, 2017, and began operations in June 2018. The program offers New Hanover County’s pregnant and newly postpartum women with opioid use disorder (OUD) a coordinated system of care that treats their addiction, creates conditions for the delivery of healthy babies, and helps keep the mother-baby dyad intact. The program model reflects a collaborative community consortium where existing community partners integrate their services to engage women in the recovery process. 121 women have been admitted into the Tides program since its inception.  Outcome: Provide an intensive, residential and/or outpatient treatment program for twenty-four (24) women with an opioid use disorder in New Hanover County, who are pregnant, anticipating pregnancy or are newly- postpartum.  Opioid List B, Item E1 – Support treatment, recovery services and supports, and prevention services for pregnant women – or women who could become pregnant – who have OUD and any co-occurring SUD/MH conditions, and other measures to educate and provide support to families affected by NAS.  Program/initiative: The Healing Place  Recommending organization: New Hanover County  Funding request: $1,186,250 (annual review)  Description: Provides low barrier non-medical detox, residential drug services, and transitional recovery housing for individuals with OUD.  Outcome: 50 beds per day for clients with OUD.  Opioid List A, Item 3 – Recovery support services  Program/initiative: MedNorth  Recommending organization: New Hanover County  Funding request: $268,369  Description: Increase access to evidence-based treatment consistent with American Society Addiction Medicine guidelines to provide services and treatment for adult Opioid Use Disorder (OUD) individuals by ensuring timely access to treatment, assist with outreach/engagement for new and hard-to-reach patients; provide naloxone supplies for existing patients and community members; support for cost of suboxone for patients who need assistance. This also includes a part-time peer support specialists and a part-time psychiatric provider to provide the services.  Outcome: Provide MOUD services to 5-8 new clients/month  Opioid List A, Item 2 – Evidenced-based addiction treatment  Program/initiative: Face the Music/Recovery Unplugged  Recommending organization: New Hanover County  Funding request: $160,000 recurring for a total of $800,000 (5 years)  Description: $160,000 annually over five years, for a total of $800,000 to the Face the Music Foundation. This dedicated funding will provide treatment for New Hanover County residents with OUD at a Recovery Unplugged facility, such as, but not limited to, the following treatment options: 30-Day Detox & Residential Treatment: $10,000 per client; 3-6 Month Detox & Residential Treatment: $30,000 per client; Individual treatment options will be determined based on the clinical/medical needs of the client.  Outcome: Approximately 15 clients for 30-day detox and residential treatment, or five clients for 3–6-month detox and residential treatment, or a combination thereof.  Opioid List A, Item 2 – Evidenced-based addiction treatment Ms. Rigby responded to questions confirming that the Face the Music/Recovery Unplugged program does not have a physical location in New Hanover County, so those using the program would be sent to a facility where the program is offered. In response to questions regarding detox capacity, County Manager Coudriet stated there is insufficient capacity here. Compared to The Healing Place, County Manager Coudriet noted that there is no one correct model as different people require different interventions. The Healing Place model is abstinence-based, long- term, and very rigorous, and some people are not prepared to make that commitment. He added that the strategy is to meet people where they are providing the services they are ready for, knowing that relapse is part of recovery. Regarding the available funding, County Manager Coudriet stated that $3.2 million is available to be invested this NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 BUDGET WORK SESSION, MARCH 14, 2024 PAGE 149 year. Over the next 18 years, the County will end up with over $36 million in opioid settlement funding alone. He responded to questions stating that funding from the opioid settlement is unavailable for schools, but the County has set aside $50 million in the Mental Health and Substance Use Fund. The County has more latitude regarding its use, which would be a policy decision for the Board. Regarding residency requirements for accessing resources, County Manager Coudriet stated that local facilities do not impose limitations, noting that at least 85% of The Healing Place residents are from New Hanover County.  Program/initiative: Staff Capacity  Recommending organization: New Hanover County  Funding request: $92,000 recurring  Description: 50% of salary for new Strategy Analyst position; 20% of salary for Strategy Data Analyst; 20% of salary for Strategy Manager  Outcome: This position will be responsible for supporting the implementation of strategic initiatives from the proposal phase to the data collection and reporting phase of the initiative. They will also be responsible for providing research and analysis of evidenced based programs that are under consideration. This position will work closely with the current Strategy Manager and current Strategy Data Analyst who will also be providing support.  Opioid List A, Item 1 – Collaborative strategic planning Ms. Rigby stated in response to questions that for staff capacity, the request is to hire one person and cover 20% of the salary for two existing employees. County Manager Coudriet added that this is being recommended but has not yet been approved. An interlocal agreement between the County and City establishes the framework, but neither entity is obligated to endorse the recommendation. If the Board approves the plan but the committee rejects it, the Board can proceed independently, but the City would withdraw its portion of the funds allocated for the fiscal year, which amounts to less than $100,000 for FY25. The committee will be meeting again before returning with a recommendation. Reports from entities that were previously allotted funds are supposed to be received reflecting how the funds were used, their successes, and the challenges they faced.  Total expenditures: Mr. Credle concluded the presentation by updating the Board on the budget timeline. He stated that the next meeting will be held on April 11, 2024.  FY25 Budget Timeline:  April 11 – General Fund Budget, NHCS, CFCC, Mental Health/Substance Use Fund ADJOURNMENT There being no further discussion, Chair Rivenbark adjourned the meeting at 4:03 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.