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HomeMy WebLinkAbout2026-02-12 Agenda Review NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW,FEBRUARY 12,2026 PAGE 756 ASSEMBLY The New Hanover County Board of Commissioners met on February 12, 2026, at 11:00 a.m. for Agenda Review in Conference Rooms 137-139 at the New Hanover County Government Center, 230 Government Center Drive,Wilmington, North Carolina. Members present:Chair LeAnn Pierce;Vice Chair Dane Scalise;Commissioner Bill Rivenbark;Commissioner Stephanie A.C.Walker;and Commissioner Rob Zapple. Staff present: County Manager Chris Coudriet; Clerk to the Board Kymberleigh G. Crowell; and County Attorney K.Jordan Smith. Chair Pierce called the Agenda Review meeting to order, explaining that the purpose was to review and discuss agenda items for the February 16,2026 Regular Meeting. However,the Board would first hear a staff update. STAFF UPDATE Annual update from Auditor,Cherry Bekaert.Chief Financial Officer Eric Credle introduced Scott Anderson, Partner with Cherry Bekaert,to provide the following update: • Annual Audit Executive Summary: • Client Service team: Dan Gougherty Sewntl Reviewer Steve Siegel Firm Technical Director • Results of the audit: • The audit firm has audited the financial statements of New Hanover County, North Carolina (the "County") for the year ended June 30, 2025, in accordance with generally accepted auditing standards and Government Auditing Standards and has issued its report dated January 30, 2026. • The audit firm has also audited the County's compliance with the types of compliance requirements described in the OMB Compliance Supplement and the Audit Manual for Government Auditors in North Carolina that could have a direct and material effect on each of the County's major federal and state programs for the year ended June 30,2025.They have issued their report dated January 30, 2026. • The audit firm has issued an unmodified opinion on the financial statements and on compliance for major federal and state programs related to our single audits performed in accordance with Uniform Grant Guidance and the State Single Audit Implementation Act. 'a a Am 0 • Internal control and compliance:Single Audit(Grants): •meaiceia Federal i Major •...... u Slate&Locel Recovery Funds(ARPA) Programs Compillance with Grant State Agreements •DSS Crosscuding A •State Special Appropriations(SCIF) Programs • Internal control communication: • In planning and performing the audit, the audit firm considered internal control over financial reporting ("internal control") as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing their opinion on the financial statements and on compliance with Uniform Guidance and the NC State Single Audit Implementation Act, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control.Accordingly,the audit firm does not express an opinion on the effectiveness of the County's internal control. • The audit firm's consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies, and, therefore, material weaknesses or significant deficiencies may exist that were not identified. In addition, because of inherent limitations in internal control, including the possibility of management override of controls, misstatements due to error or fraud may occur and not be detected by such controls. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW,FEBRUARY 12,2026 PAGE 757 • A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions,to prevent,or detect and correct, misstatements on a timely basis. A material weakness Is a deficiency,o k A significant deficiency is a deficiency,or a ombi nation of deficiencies in internal control, combination of deficiencies,in internal control such that there is a reasonable poss,lb that that is less severe than a material weakness, material misstatement of the County'. yet important enough to merit attention by financial statements will not be prevented,or those charged with governance. detected and corrected,on a timely basis. we did not identify any control deficiencies that we believe to be materlal weaknesses. • Corrected and Uncorrected Misstatements: Professional standards require the audit firm to accumulate all misstatements identified during the audit, other than those that are clearly trivial,and communicate them to the appropriate level of management. • Corrected misstatements: none noted • Uncorrected misstatements: none noted • Qualitative Aspects of Accounting Practices: • Management is responsible for the selection and use of appropriate accounting policies.The significant accounting policies used by the County are described in Note 1 to the financial statements. • The County implemented Government Accounting Standards Absences, Statement No. 101, Compensated Absences, which resulted in a restatement(reduction) of net position as of July 1, 2024 of $17,593,074. The audit firm noted no inappropriate accounting policies or practices. • Related party relationships and transactions: • As part of the audit, the audit firm evaluated the County's identification of, accounting for, and disclosure of the County's relationships and transactions with related parties as required by professional standards. The firm noted none of the following: • Related parties or related party relationships or transactions that were previously undisclosed to the audit firm; • Significant related party transactions that have not been approved in accordance with the County's policies or procedures or for which exceptions to the County's policies or procedures were granted; • Significant related party transactions that appeared to lack a business purpose; • Noncompliance with applicable laws or regulations prohibiting or restricting specific types of related party transactions;and • Difficulties in identifying the party that ultimately controls the entity. • Significant unusual transactions: • The audit firm noted no transactions entered into by the County during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. • For purposes of this presentation, professional standards define significant unusual transactions as transactions that are outside the normal course of business for the County or that otherwise appear to be unusual due to their timing, size, or nature. The audit firm noted no significant unusual transactions during the audit. • Significant estimates: • Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: • Allowance for doubtful accounts • Depreciation and amortization expense • Fair value of investments • Pension and OPEB liabilities • Accrued compensated absences • Self-insurance claim liabilities that have been incurred but not reported. • Liability for closure and post closure(Landfill) • Imputed interest rate on leases and IT subscriptions • The Audit firm evaluated the key factors and assumptions used to develop these estimates in determining that it is reasonable in relation to the financial statements taken as a whole. • Qualitative Aspects of Accounting Practices: The financial statement disclosures are neutral,consistent,and clear. • Independence Considerations: 0 Non-attest services: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW,FEBRUARY 12,2026 PAGE 758 • The audit firm prepared the Data Collection Form and assisted with the implementation of GASB 101. • For all nonattest services we perform, you are responsible for designating a competent employee to oversee the services,make any management decisions, perform any management functions related to the services, evaluate the adequacy of the services, and accept overall responsibility for the results of the services. • Independence conclusion: • The audit firm is not aware of any other circumstances or relationships that create threats to auditor independence. • The audit firm is independent of New Hanover County and have met their other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. • Other required communications: • Difficulties encountered: The audit firm encountered no significant difficulties in dealing with management in performing and completing our audit. • Disagreements with management: Includes disagreements on a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. The audit firm is pleased to report that no such disagreements arose during the course of our audit. • Auditor consultations:The audit firm noted no matters that are difficult or contentious for which the auditor consulted outside the engagement team. • Management representations: The audit firm has requested certain representations from management that are included in the management representation letter dated January 30, 2026 • Management consultations: In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. To the audit firm's knowledge,there were no such consultations with other accountants. • Other findings or issues: The audit firm generally discusses a variety of matters, including the application of accounting principles and auditing standards with management each year. These discussions occurred in the normal course of the professional relationship and the audit firm's responses were not a condition to its retention. • Fraud and illegal acts: As of January 30, 2026, no fraud, illegal acts, or violations of laws and regulations were noted. • Going concern: No events or conditions noted that indicate substantial doubt about the County's ability to continue as a going concern. • Other matters: Required Supplementary Supplementary Information Other Information Information J • Upcoming financial reporting changes: 103—Financial Reporting CapitalAssets Model Improvements • These standards will be effective for the County in the upcoming years and may have a significant impact on the County's financial reporting. • The audit firm would be happy to discuss with management the potential impacts on the County's financial statements and how they may be able to assist in the implementation efforts. In response to questions, Mr.Anderson stated this is a clean, on-time financial audit with no adjustments and expressed appreciation to Mr.Credle and his team for their work. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW,FEBRUARY 12,2026 PAGE 759 Chair Pierce thanked Messrs.Credle and Anderson for the update. Consent Agenda Item #10: Approval of Agreement for Police Communications Services Between Wrightsville Beach Police Department and New Hanover County 911 Center.In response to questions,911 Director Hope Downs explained that prior directors and police chiefs had signed similar agreements in previous years. She stated that the updated agreement is needed due to a new person serving as the police chief. Consent Agenda Item#11:Approval to Submit a Grant Application to the North Carolina Department of Environmental Quality (NCDEQ). In response to questions, Recycling and Solid Waste Director Joe Suleyman confirmed that staff plans to expand Household Hazardous Waste services to accept solar panels and electric vehicle batteries for recycling. He stated that, if approved, grant funds will be used to install the infrastructure needed to provide the service. Consent Agenda Item#14:Approval of Penny Rounding Policy.In response to questions, Mr.Credle stated that departments are having difficulty making exact change for cash transactions following the discontinuation of penny production.The proposed policy would implement uniform rounding for cash payments only,while check and electronic payments would remain exact. Property taxes are excluded due to statutory requirements, and the approach follows UNC School of Government guidance. If approved,the policy will take effect April 1,2026. Regular Agenda Item #18: Recognition of Government Finance Officers Association Award — FY25-26 Budget.Commissioner Zapple congratulated Mr. Credle and Budget Officer Amanda Kostusiak and their teams. Regular Agenda Item #19: Presentation of Novant Health Five-Year Update. In response to questions, County Manager Coudriet provided a brief overview of Novant Health's announced investment of more than $1 billion in the County as part of the asset purchase agreement. He noted that Novant Health Coastal Region President Ernie Bovio will speak at the Monday meeting regarding the first five years of the partnership. Regular Agenda Item#21: Consideration of a landfill tipping fee waiver for the Trask Land Company. In response to questions, County Manager Coudriet clarified that the Trask family owns the site where the landfill operated, while the County operated the landfill under a lease agreement from 1970 to 1974. He stated that the request is consistent with a similar precedent approved by the Board several years ago and represents the County's effort to restore the property in accordance with the original lease. Regarding the tonnage limit, Mr. Suleyman explained that the proposed 55,000-ton cap is based on consultant estimates and provides a defined limit to avoid the open-ended scope experienced in a prior project. He estimated that the material volume would reduce landfill life by approximately two months. Regarding financial impacts, Mr.Suley stated that daily landfill revenue averages approximately$50,000 to$75,000 based on tonnage and fee rates. He added that the material composition remains unknown but may include soil suitable for daily cover or recyclable materials, which could help offset long-term costs. Regular Agenda Item #22: Consideration of Declaration of Covenants, Conditions, and Restrictions for 1450 Point Harbor Road.In response to questions,County Manager Coudriet confirmed that the declaration would formalize the Board's intent to preserve the recently acquired 1450 Point Harbor Road property and establish limitations on future use, consistent with a model previously approved for Oak Grove Cemetery. Assistant County Manager Jessica Loeper added that the designation will not include the parcel south of the Sheriff's training facility, which may be used for marine unit or related purposes.She stated that staff will review the parcel boundaries shown on the drawing to determine whether the portion of land between Point Harbor Road and Highway 421 falls within the designation and will report back to the Board on Monday. Regular Agenda Item #24: Public Hearing and Consideration of Resolution Approving the Issuance of Revenue Bonds for the Benefit of EDPI Wilmington Hotel,LLC.In response to questions,Mr.Credle confirmed there is no financial liability on the County's part. Regular Agenda Item #26: Consideration of Adoption of the New Hanover County Destination 2050 Comprehensive Plan Update.County Manager Coudriet stated that,although the Board will not vote on the matter during Monday's meeting,he asked Planning and Land Use Director Rebekah Roth to provide additional information to support the Board's discussion. Planning and Land Use Director Rebekah Roth stated that, as a supplement to the maps presented at the January 291" Agenda Review meeting, staff prepared additional maps showing undeveloped properties and areas with redevelopment potential to help illustrate the implications of future land use map changes. She explained that while place types are not parcel-specific,the supplemental maps help clarify how the proposed changes could affect different areas.The maps identify properties without structures that are not conserved or designated as open space, as well as properties with structures where the improvement value is less than the land value, indicating possible redevelopment. She added that staff continue to receive public comments and will distribute those not included in the agenda packet before the weekend,with additional comments forwarded as received. Regular Agenda Item #27: Text Amendment Request (TA25-05) - Request by New Hanover County to amend the Unified Development Ordinance Articles 2,3,4,5,and 10 to update references to the Comprehensive Plan place types, designate the Riverfront Mixed Use zoning district as a legacy district, modify transportation- related application requirements for PD rezonings, incorporate recent changes to state statutes, and correct an NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW,FEBRUARY 12,2026 PAGE 760 unintended conflict included in the recent sign standards ordinance amendment.County Manager Coudriet stated that he and Ms.Roth recommend considering the text amendment request at a future meeting following the Board's decision on the 2050 Plan, noting that most proposed changes relate to that plan. He stated that staff will present the comprehensive plan as scheduled, but requested that the Board continue the text amendment item,as only the Board has the authority to continue a calendared matter. He added that the Board may choose to continue the item either today or during Monday's meeting. Chair Pierce asked for Board direction. MOTION:Commissioner Zapple MOVED,SECONDED by Commissioner Walker to continue Regular Agenda Item#27: Text Amendment Request (TA25-05) - Request by New Hanover County to amend the Unified Development Ordinance Articles 2, 3, 4, 5, and 10 to update references to the Comprehensive Plan place types, designate the Riverfront Mixed Use zoning district as a legacy district, modify transportation-related application requirements for PD rezonings,incorporate recent changes to state statutes,and correct an unintended conflict included in the recent sign standards ordinance amendment to a future date after the Board has approved the New Hanover County Destination 2050 Comprehensive Plan. Upon vote,the MOTION CARRIED UNANIMOUSLY. CLOSED SESSION Chair Pierce stated that a Closed Session is needed pursuant to North Carolina General Statute(NCGS) 143- 318.11(a)(3) and (a)(5) to consult with its legal counsel in order to preserve the attorney-client privilege between legal counsel and the public body. MOTION:Vice Chair Scalise MOVED,SECONDED by Commissioner Zapple to enter into a Closed Session pursuant to NCGS 143-318.11(a)(3) and (a)(5)to consult with its legal counsel in order to preserve the attorney-client privilege between legal counsel and the public body. Upon vote,the MOTION CARRIED UNANIMOUSLY. Chair Pierce convened the Closed Session at 11:45 a.m.and ordered that all people,except Board members and specifically designated staff,leave the meeting room. CONVENE TO OPEN SESSION FOR AGENDA REVIEW Chair Pierce called the meeting back to order at 2:01 p.m.,reported that the Board had concluded its closed session,and announced that the budget work session was postponed until March 12,2026. ADJOURNMENT There being no further discussion, Chair Pierce adjourned the meeting at 2:02 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.