WILMINGTON — New Hanover County spent a sizable portion of its budget recovering from Hurricane Florence last year and it shows in the county’s general fund balance. According to the Fiscal Year 2019-2020 recommended budget, the general fund balance has fallen below the county’s own standards of 18-21 percent of total expenditures — currently down to 13.6 percent.
The term general fund balance can be confusing as it is not a literal cash account; instead, it shows the financial equity of a fund.
According to the UNC School of Government, “Fund balance represents potential spendable equity,” that is, a governmental body’s assets minus its liabilities.
It is typical for large counties to carry a fund balance of 10-25 percent of expenditures, with 30 percent being typical for small counties. Despite New Hanover County’s fund balance being lower than officials would like, it’s still above what the Local Government Commission (LGC) recommends maintaining — greater than 8 percent.
As seen with other localities around the region, the LGC has been known to reach out to governmental bodies that allow the general fund balance to decline. For example: last year, the LGC sent a letter to Carolina Beach asking for an explanation for its several-year trend of a dwindling general fund balance, and what it planned to do to right the course.
As the new fiscal year for 2019-2020 rapidly approaches and local governments work to approve new budgets, New Hanover County has plans to rebuild its fund balance position.
There’s good news for residents of New Hanover County, the recommended Fiscal Year 2019-2020 budget does not show a property tax increase, leaving the county-wide rate at 55.50 cents per $100 of assessed value.
The total spending plan for the budget is $398.5 million — a 3-percent increase from the last fiscal year budget.
Increased growth means increased revenues
As New Hanover County continues to grow and attract new residents, the county’s tax base grows as well.
According to the recommended budget, “With $628 million added to the tax base over the past year, the estimated tax base is $34.84 billion, which is an annual growth rate of 1.6 percent.”
Despite the high cost of Hurricane Florence recovery, a staggering $20.4 million, the state and federal government have been working to reimburse the county with more than $7 million already being paid out.
The expected reimbursements will help balance the budget as well as begin to replenish the general fund balance, according to the recommended budget.
Spending for improvements
Funding for public schools takes up a large portion of the county’s budget, as it does every year, with $116.2 million in direct funding. This is an increase of 3.4 percent over the current fiscal year.
There are also plans for “intelligent growth and economic development” in this year’s budget.
According to the budget, “This component of the strategy aims to leverage public infrastructure to encourage private investment, increase the diversity and number of higher wage jobs, and encourage development of complete communities.”
Some of these recommendations include: $202,145 for Wilmington Business Development, $65,000 for WDI, $525,000 to CFPUA, and $250,000 to Wrightsville Beach for improvements at Johnnie Mercer’s Pier.
When asked about the funding to help Wrightsville Beach pay for a beachfront park, the county responded saying it is the biggest and most utilized beach access in the county.
“The county committed to funding $250,000 in FY18-19 and $250,000 in FY19-20 for the Wrightsville Beach Ocean Access Park Improvement Project near Johnny Mercer’s Pier. This is helping to improve one of the largest and most utilized beach access facilities in the county and is helping to support existing and new businesses in the area. It is included in the county’s budget as an economic development investment,” NHC spokeswoman Jessica Loeper said.
The budget also has some funding set aside to address the issue of affordable housing in the region.
“Earlier this year the board approved the establishment of a workforce housing specialist position to focus on policy development, as well as provide staff support for a permanent housing advisory committee,” according to the budget presentation.
According to Loeper, “A public hearing on the recommended budget will be held on Monday, June 3 at 4 p.m.; and the budget is scheduled to be adopted on Monday, June 17.”
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