New Hanover County is in good financial shape going into the upcoming budget-writing season, commissioners were told at their retreat on Friday.
Chairman Woody White maintained, however, that more can be done to improve the county’s financial standing and situation, urging staff to set a policy for taking on new debt and to take a close look at discretionary programs—those that are not mandated by the state.
Such programs include, as listed in a presentation at the retreat: Cape Fear Museum, community justice services, cooperative extension services, development services, engineering, library, outside agencies, parks and gardens, senior resource center and veterans services.
In discussing that portion of the annual budget, County Manager Chris Coudriet described discretionary programs as those that equate to quality of life and “what people want in return for their investment.”
White said such programs should serve as a starting point—for deciding what adjustments could be made to county services.
“Where we have discretion, that’s where I want to start,” White said, encouraging staff to look at, for example, which social services the state requires and which it does not—among other ways at approaching potential cost-savings.
“What services could we consider merging or doing away with? Or maybe we decide not doing anything (is best).” The point, White said, is for staff to look for any expense that is not essential and could be saved.
Commissioner Jonathan Barfield said he would be concerned about impacts such changes could have on county services, which he said are often interrelated among different departments. White said he shared that concern, but wants to feel comfortable that the amount being spent “is exactly what we need.”
“I want to feel comfortable that if we’re funding, as a board, a park, human services, whatever,” White said, “that it’s the right number to provide adequate services, and not a dollar more.”
Coudriet said staff strives to do that, despite any perception to the contrary. Noting the results of a recent community survey, shared with the board during the retreat, Coudriet said, “The perception is we do not spend taxpayers’ dollars wisely.”
“We have got to reimagine how we do business,” Coudriet added. “Both what we do, and how we do it.”
Later in the meeting, Coudriet also noted, “We have been very challenging in our budget meetings (with department heads). The requests that are there from our departments are very unaligned with the resources that are there.”
Clarifying his scrutiny, White said he wasn’t suggesting there had been a lack of rigor in the budget-writing process. “But I wasn’t on the board until now, and I need those discussions to happen,” he said.
“I don’t need to manage the county. We have very capable county management,” White added. “But I want to feel comfortable that the budget we adopt is what we need.”
Acknowledging department heads present at the retreat, Commissioner Thomas Wolfe said he hoped staff did not think the board was “here with our ax, out to chop everything,” adding that he hoped the process could reveal opportunities for merit increases or salary adjustments.
Debts and priorities
In presenting an overview of the current budget, which maintains operations through June 30—the end of the current fiscal year—Coudriet described the county as being “in really good shape” financially while pointing out challenges on the horizon.
Revenues are expected to exceed the current budget, which totals just under $278 million, due to adjustments in sales tax receipts. And expenditures are expected to be less, due to debt service payments and conservative spending by departments, according to presentations made at the retreat. Staff does not anticipate needing to pull from the county’s fund balance, or reserve fund.
Challenges include potential expansion of the jail, and cuts in federal health and human services resulting in costs being shifted to states and counties. Also, Coudriet said the county has not had a full measure-and-list valuation since at least 1990, noting that New Hanover has had two major growth cycles since then.
At $35 per parcel, he said, the cost of a measure-and-list valuation—meaning one that involves on-site measuring and inspection of improvements on properties—would total as much as $3.6 million. Coudriet said staff wants to undergo that process, and he encouraged the board to also decide if it wants to remain on the current four-year cycle for property valuations.
Outstanding debt, as of last fiscal year, totals just over $391 million. With more debt anticipated from future projects—$54 million next fiscal year for Cape Fear Community College facilities, plus $40 million two years after that; $10 million for improvements to the 320 Chestnut St. building in FY14; and $16.9 million in FY16 for sewer improvements at Heritage Park and Marquis Hills—staff is recommending adoption of a formal debt policy and fund balance policy to specify uses and purpose of debt issued, structure of debt, debt ratios, and percentage and replenishment of the fund balance.
White expressed support for both policies. “We need a real, unequivocal debt policy at some point,” he said.
Adding that the origin of the retreat was “controlling the growth of government,” White acknowledged: “County government is always going to have debt. I believe we need to lower our debt.”
Board members also spent the retreat identifying priorities and goals for the next several years. Of a number of strategic priority goals identified from the survey, commissioners indicated the most desire to focus on promotion of business and economic development, with the goal of creating 6,000 to 8,000 jobs by 2016. Commissioners also leaned toward improving K-12 education.
The board also identified short-term action items for the coming fiscal year, such as securing partnerships with the City of Wilmington and other potential partners, setting fiscal policy and creating an economic development plan. (Related story)
As for the budget, White said, “There are some people who say: just adopt a budget that doesn’t raise taxes.”
“That’s not how this board wants to do this,” he said.
Jonathan Spiers can be reached at (910) 772-6313 or [email protected]. On Twitter: @jrspiers
