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HomeMy WebLinkAbout2026-04-16 Agenda Review NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW, APRIL 16, 2026 PAGE 831 ASSEMBLY The New Hanover County Board of Commissioners met on April 16, 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 A?orney K. Jordan Smith. Chair Pierce called the Agenda Review mee?ng to order, explaining that the purpose was to review and discuss agenda items for the April 20, 2026 Regular Mee?ng. However, the Board would first hear a staff update. STAFF UPDATE Budget Modeling Tool – Dynamic Spreadsheet Overview. Budget Officer Amanda Kostusiak presented the following information:  Budget Scenario - 30.6 Rate: County Manager Coudriet noted that staff did not create a budget gap, but that items have been added as identified by the Board as priorities, and that the model has been balanced. Ms. Kostusiak added that this scenario is balanced at 30.6 cents, with the use of the Revenue Stabilization Fund (RSF). In response to questions, Ms. Kostusiak confirmed that the school and pre-K funding shown in the scenario st was above the amount already included in the budget and reflected the April 1 discussions. Regarding the pre-K funding, County Manager Coudriet stated that, based on his discussions with the superintendent, the school system’s FY 2026-2027 pre-K costs were covered in its proposed budget, and the schools were not asking for a restoration of the $916,000. He explained that the amount appeared in staff’s scenario because Board members had st raised restoring pre-K funding as a priority during the April 1 budget work session. The school district’s budget th request is expected to be received around May 8. County Manager Coudriet noted that, as he understands it, based on discussions with the superintendent, the school budget will request a 3% increase in the County's operating contribution, which is reflective of the $836,000 increase shown on the slide, along with approximately $2.8 million in capital funding already included in the budget previously presented to the Board. A brief discussion ensued about the scenario options. In response to the discussion, Ms. Kostusiak stated that staff adjusted the property tax and sales tax figures based on current data. She explained that staff was still reviewing the property tax base and monitoring sales tax collections, which were coming in slightly lower due to higher reimbursement rates. She clarified that the review focused on the tax base numbers, not the tax rates. A brief discussion ensued about economic development and the arts and cultural funding in the scenario. In response to questions and a request for a breakdown of the Arts Council and miscellaneous funding, Ms. Kostusiak stated that staff proposed a funding pool for the Arts Council and other arts and cultural programs that had previously moved through the New Hanover Community Endowment (NHCE) or non-county agency process. County Manager Coudriet clarified that the proposed funding would fall under economic development, not outside agency funding, and would require a separate public hearing. He stated that staff identified approximately $650,000 in NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW, APRIL 16, 2026 PAGE 832 st economic development-oriented items that Board members discussed on April 1 but were not included in the original preliminary budget presentation.  Budget Scenario – 32.6 Rate: In response to questions, County Manager Coudriet stated that the tax increase scenario did not include workforce housing because that item was proposed for funding through the RSF in the first scenario. He also clarified that the tax increase scenario did not include the additional $650,000 in economic development funding discussed st after the April 1 presentation, although the economic development items already included remained unchanged. He stated that the two scenarios were intended to provide bookends for the Board’s discussion as it worked toward a balanced adopted budget. st A brief discussion ensued about how to fund the priorities identified during the April 1 work session. County Manager Coudriet stated that, without using the RSF, the Board would need to raise revenue to fund those priorities. He noted that reducing expenditures was also an option, but staff had not heard that direction identified as a Board priority during or after the April 1 presentation. In response to questions, Ms. Kostusiak confirmed that the tax impact shown on the slide was based on the County’s average home value of $580,000. The median value of approximately $412,000 shown on the worksheet was additional information. County Manager Coudriet stated that staff had historically used the average home value when presenting tax impact information to the Board. He stated that staff would provide a tool allowing Commissioners to adjust the home value input, but staff presentations would continue to center on the average home value. A brief discussion ensued about the impact of a property tax increase on property owners, the potential pass-through effect on renters, the additional burden for residents who also pay municipal taxes, and the potential future tax impact of the school bond. In response to questions, County Manager Coudriet stated that recent information indicated that approximately 70% of County residents were homeowners or property owners. County Manager Coudriet stated that, if voters approve the school bond, staff will recommend a tax increase of approximately 1.75 cents in the FY 2027-2028 budget sufficient to cover the debt service for the life of the bond. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW, APRIL 16, 2026 PAGE 833 Discussion ensued about the presentation and what direction to provide staff. Vice Chair Scalise stated that the Board has an opportunity for the upcoming budget year to increase funding for the school district, restore pre- K funding, set aside funding for workforce housing, and add organizations to the County’s economic development funding category. He stated that those priorities could be funded through the RSF, which he believed was created for circumstances such as the current budget environment. Although the RSF was not a permanent funding source, he believed current economic conditions and high costs made this an appropriate time to use it. Commissioner Zapple stated that the County has a structural imbalance between revenues and the cost of providing services. He said he believed the Board should use the budget process to right-size the tax rate rather than rely on the RSF. He stated that taking money from the fund without a clear replacement plan would also reduce the interest income it generates. He stated the Board appeared to agree on the priorities under discussion but disagreed on how to fund them. He stated his willingness to discuss workforce housing as part of a compromise but preferred to address the County’s revenue needs through the tax rate rather than continued reliance on the RSF. Commissioner Walker stated that, in her opinion, the current tax rate was set too low and required the County to use approximately $8 million in one-time money. She stated that the County should not continue using savings or one-time funds to support ongoing services and should set the tax rate at the level needed to serve a growing county. She noted that costs continue to rise each year, including employee compensation and school funding, and stated that the tax rate should reflect those service needs. Chair Pierce stated that she viewed the issue differently and noted that the County increased the budget by approximately $11 million for the current year. She stated that, in her view, the County increased the budget even though it did not include every requested item. She stated that she believed the differences reflected varying budgeting philosophies. Vice Chair Scalise stated that the Board appeared to agree on several priorities, including pre-K, additional school funding, workforce housing, and certain economic development items, and that the remaining issue was how to fund them. He stated that Board members had discussed those priorities as part of negotiations and asked the Commissioners opposed to using the RSF to consider negotiating on its use as well. Commissioner Zapple stated that the prior-year and current-year budget discussions both involved one- time money, and he did not want the County to continue relying on that approach without a plan to replace the funds. He cited the teen library area at Project Grace as an example of a service need that, in his view, the lower tax rate did not fully address. In response to questions about library staffing and the teen library area at Project Grace, County Manager Coudriet stated that the current budget fully funded the staffing needed for the Grace District library and provided appropriate and consistent coverage. He clarified that his recommended budget did not include teen librarian positions across the system, even at the higher recommended tax rate, so the Board’s final budget decision did not remove those positions. Chair Pierce concluded the discussion by stating that the Board needed to provide staff with clearer direction. Based on the discussion, she identified the available options as keeping the proposed items in the budget and using the RSF without increasing the tax rate, increasing the tax rate, or reducing expenditures. County Manager Coudriet responded that he and staff understood the Board’s direction was to prepare options that did not use the RSF, which would require a different approach and could include a tax increase depending on the Board’s priorities. Chair Pierce confirmed that she did not hear four votes in favor of using the RSF and directed County Manager Coudriet to bring back two or three options that did not rely on it. Vice Chair Scalise asked that the options show different tax levels and possible reductions so the Board could understand the tradeoffs. Commissioner Rivenbark asked staff to include an option removing the proposed enhancements. County Manager Coudriet stated that staff would provide options, including scenarios with the proposed enhancements, the related revenue needs, and a 30.6- cent scenario without those additions. Chair Pierce then moved the meeting into the review of the agenda items for the April 20, 2026 Regular Meeting. Consent Agenda Item #2: Budget Amendment. In response to questions about the 911 system budget amendment, Chief Financial Officer Eric Credle stated that the amendment would transfer the anticipated grant funding and related expenditures from the General Fund to the 911 Fund for record-keeping and grant compliance purposes. He explained that the same amount of money would come in and go out, making the amendment administrative. In response to further questions, Mr. Credle stated that the project funding was complete and the upgrade was underway. County Manager Coudriet stated that the Board had committed to the multi-year upgrade the previous year and that it included several components, such as jail management software. Assistant County Manager Jessica Loeper stated that the existing system had been upgraded and was functioning properly, and the CAD upgrade was expected to go live in August or September of the following year. Regular Agenda Item #8: Consideration of Resolution Authorizing the Termination of the New Hanover Regional Medical Center Pension Plan with No Reduction in Benefits to Plan Participants. In response to questions, NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 36 AGENDA REVIEW, APRIL 16, 2026 PAGE 834 County Manager Coudriet stated that he had spoken with Laurie M. Whalin, Acute Care Operations and New Hanover Regional Medical Center President, Novant Health - Coastal Region, the previous day to explain the item, and acknowledged that staff could have communicated more clearly on the front end. Mr. Credle explained that when the hospital sale closed, the pension plan remained with the County as both an asset and an obligation. He stated that the County retained the trust assets and responsibility for paying eligible pension benefits, creating potential exposure if market declines caused the assets to fall below the value of the liabilities. The trust was fully funded at the time of the sale. It later declined with the market but has since recovered, with assets exceeding liabilities for approximately 16 to 18 months. Mr. Credle stated that transferring the liability to an annuity company would reduce the County’s exposure. County Manager Coudriet added that the County would effectively sell the obligation, similar to purchasing insurance for medical loss claims, and that an annuity company would meet the pension obligations instead of the County paying them through the County-held trust. Mr. Credle noted that the resolution designates the county manager and chief financial officer to carry out the action. Regular Agenda Item #9: Consideration of Resolutions Related to Planned General Obligation Bond Referendum to Fund Capital Needs for New Hanover County Schools. In response to questions, County Manager Coudriet stated that the proposed Riverlights Elementary School would serve as the replacement for Mary C. Williams Elementary School. He stated that the school system would demolish the existing Mary C. Williams facility and then determine whether to sell or retain the property. The bond plan does not include funding to renovate, retrofit, or reuse the facility. He further stated that, as with the 2014 school bond, the County would structure agreements to direct where the school system may spend bond proceeds. In response to additional questions, he stated that if funding were later proposed for Mary C. Williams, the Board would have to approve that use because bond plan did not contemplate it. Discussion of Request to Add a Resolution Regarding Property Tax Authority Restrictions County Manager Coudriet stated that the North Carolina Association of County Commissioners suggested counties consider a resolution opposing legislative restrictions on property tax authority, including potential caps or other limits. He shared a draft resolution with the Board for its consideration on Monday, should it wish to proceed with the matter. Chair Pierce noted that the resolution was not on the agenda and stated that she would review the draft language, discuss it with her fellow Commissioners, and talk with Clerk to the Board Crowell. ADJOURNMENT There being no further discussion, Chair Pierce adjourned the meeting at 12:00 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.