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HomeMy WebLinkAboutMay_27_2004_Budget_Session_MinutesIREDELL COUNTY BOARD OF COMMISSIONERS FY 04-05 BUDGET SESSION MINUTES MAY 27, 2004 The Iredell County Board of Commissioners met on Tuesday, May 27, 2004, beginning at 8:30 a.m., in the Iredell County Government Center (South Wing Conference Room), 200 South Center Street, Statesville, NC for the purpose of reviewing the proposed FY 04-05 Iredell County Budget. Present were: Chairman Steve D. Johnson Vice Chairman Godfrey Williams Doug Madison Marvin Norman Sara Haire Tice Staff present were: County Manager Joel Mashburn, Finance Director Susan Blumenstein, and Clerk to the Board Jean C. Moore. Media in attendance were: Record & Landmark reporter Michelle Harrison, Iredell Citizen reporter Kim McKinney, Lake Norman Times reporter LuAnne Laubscher, and Iredell Neighbors reporter Kathryn Wellin. In addition, Record & Landmark reporter Katie Beaver attended the meeting during the discussion pertaining to funding for the Iredell-Statesville Schools. CALL TO ORDER by Chairman Johnson. OVERVIEW OF REVENUES & PROJECTIONS: Finance Director Blumenstein noted that a few years ago, the board of commissioners requested a fund balance (general fund) of 1 I%, and the proposed budget was close to the targeted amount at 10.20%. Mrs. Blumenstein and the county manager then reviewed the budget schedules and briefly discussed the proposed expenditures. Some of the comments were: • In regards to the estimated sales tax for the current year, the final payment will not be received until September 2004. • The county's transportation system is shown as a special revenue fund, and this is due to most of the funds originating from grants. It is a self-supporting department, similar to the solid waste enterprise system. • The following new positions were recommended. - One mechanic for Vehicle Services. When the county assumed the transportation service, this added several vehicles to the county's fleet. (Fleet is up to 270 vehicles with three mechanics to service, repair, and inspect them.) - One road deputy and one civil deputy (IV -D processing) for sheriffs dept. - Four new Jailer Ills were added and will be based at the Hwy. 21 annex. - One teiecommunicator position - One new inspector plus increasing hours for GIS Technician (will bring up to full- time) in planning/code enforcement - One public health specialist, one dental assistant, and two environmental health specialist positions in the health department - Five and a half positions for social services - Three positions for the library - One athletic program assistant for recreation - One van driver for the transportation system (ICATS loop) - Two transfer station attendants for the anticipated west Iredell site Chairman Johnson shared a concern about rising gas prices and the impact on the sales taxes. He said taxpayers were paying more for more gas, and this left them with less to purchase items that generated sales taxes for the county. Johnson said he recently heard that a one -cent increase in gas, nationwide, amounted to a billion dollars in the loss of disposable income. MITCHELL COMMUNITY COLLEGE BUDGET: Joining the commissioners for the college's budget discussion were: Board of Trustees Member Joe Troutman, President Dr. Doug Eason, Director of Facility Services Gary Johnson, and Vice President for Finance and Administrative Services Dick Lefevre. Troutman said that for several years, the college had received commendable audit reports, and no exceptions had been found. Mr. Troutman said many students attended on a part-time basis, and this distorted the college's full-time equivalency (FTE) hours. He said the state allocated funds to the college on an FTE basis, and did not take into consideration that there might five or six people attending to equate to a full-time equivalency. Troutman said the college was to the point where the services being provided would have to be cut, or funding would have to increase. Lefevre said that in 2002-2003, there was a 17% increase in FTE. He said several new educational facilities had opened, and the Workforce Development Center would be operational next year. Lefevre said most of the state funding went towards salaries and benefits. Facility Services Director Johnson said the college maintained 300,000 sq. ft. of space. Commissioner Williams noted that in future budgets, it would be helpful to show how much money was needed to maintain the square footage. Dr. Eason said the college needed a different funding formula, and the FTE method did not take into consideration that all of the part-time students still needed registration assistance, and most all of them still needed the amenities, such as the parking lots. Chairman Johnson asked about the anticipated funding from the state. Eason said the initial projections from the Governor's office were promising -- the best in several years; however, the house and senate had not approved anything. (The college's requested amounts and the county manager's recommended budget for FY 04-05 are as follows.) Requested Current Expense $2,048,500 Special Capital 1,258,325 Recommended $1,723,637 (2% me. from 03-04) 544,680 MOORESVILLE GRADED SCHOOLS: Attending the meeting to address the needs of the Mooresville Graded Schools were Board of Education Chairman Frank Fields, Superintendent Dr. Bruce Boyles, and Finance Director David Dutton. Some of Dr. Boyles comments are as follows: • Staff supplements are in increments (monetary amounts increase on a five-year basis) • All schools are accredited • System has about 20 charter students • Waiting on water/sewer at East Middle School • New middle school will probably be needed in 2009 • Will be able to use fund balance to make up the difference between the requested/recommended budgetary amounts Dr. Boyles urged the commissioners to talk to the legislators about the state lagging behind in the replacement of school buses. Commissioner Tice asked when the new intermediate school would be finished. She also asked if the system's attendance lines crossed into Rowan County. Boyles said the final wing for the new school was being worked on. In reference to the attendance lines, he said that in accordance with the system's charter, and an agreement 2 approved in 1996, the lines ended at the Rowan/Iredell boundaries. He said that at one time, Mooresville had 800 tuition students, but the number had decreased to 50. Boyles said most of the tuition students were children of employees and in -county tuition was charged. (Mooresville's requested FY 04-05 budget amounts and the county manager's recommended figures are as follows.) Requested Recommended Current Expense $5,393,620 $5,239,946 (2% inc. from 03-04 + ADM growth) Capital Outlay 468,711 459,382 IREDELL-STATESVILLE SCHOOLS: Joining the commissioners to discuss the Iredell-Statesville School System's budget were Board of Education Chairman Dr. David Cash, Superintendent Dr. Terry Holliday, Deputy Superintendent Dr. Steve Lane, Maintenance Services Director Dr. Kenny Miller, Board of Education Member Ken Wilson, and Finance Director Terry Haas. Dr. Holliday read the following prepared statement. "The Iredell-Statesville Schools Board of Education began budget preparation for FY 05 in November of 2003. Entering the budget process, we hoped for the traditional 5% county cost - of -living increase and funds for additional student growth. "Going into the budget process, we knew there were increases over which we had little or no control. These included: health care, retirement benefits, inflation costs for supplies and materials, increased enrollment, facilities maintenance, salary COLAs, and utilities. As I am certain you are aware, we have seen double-digit inflation in many of our utilities costs. "We also knew that unfunded mandates from the federal and state level would increase. Currently, the federal Individuals with Disabilities Education Act is funded at 16%. This is well short of the promised 40%. The local budget has to make up the difference — we have no choice. The federal NCLB legislation and English as Second Language program have certainly increased our local funding costs to meet the needs of at -risk children and at -risk schools. Additionally, state programs for at -risk students and programs for long-term suspension alternatives have increased our local costs. Finally, the state has passed on to LEA's the responsibility of reverting over $40 million. In Iredell-Statesville Schools, this will amount to over $700,000 in FY 05. "To make the situation even more difficult, the Governor's budget proposed additional teachers at 3"' grade level to reduce class size. This proposal comes with no money for classrooms, supplies/materials, equipment, or teacher assistants that will be required for each classroom. As a matter of fact, the Governor has proposed reducing the annual Public School Capital Fund by 50%. This will cost Iredell-Statesville Schools another $400,000. "As a school system, we have worked diligently the last two years to become more fiscally responsible. We have: • Implemented zero -based budgeting • Implemented strategic budgeting • Implemented cost conservation in our energy management program • Reduced central office costs to the lowest ratio in the state of NC • Received an independent audit with 0 reportable findings • Re-established LGC recommended fund balance for operating budget • Established a capital outlay fund balance for current and future capital needs "Our strategic budgeting focuses on our strategic priorities of High Student Performance, Safe Schools, Quality Staff, Partnerships and Effective/Efficient Operations. These priorities enable us to fulfill our mission of rigorously challenging ALL students to reach their potential. This mission and strategic priorities are in alignment with the NC Supreme Court's ruling in the Leandro Case. This ruling and subsequent rulings through Judge Howard Manning clearly state that it is the state's responsibility to provide for a "sound basic education" by providing for a 3 high quality teacher in every classroom, a strong principal in every school, and the resources (supplies, material, equipment, etc.) to teach the North Carolina Standard Course of Study. "The problem in Iredell County and in every county in North Carolina is that county budgets have to make up the difference between what the state is funding and what is required to meet these mandates. At one time, counties had primary responsibility for construction and maintenance costs for schools. Over time, the state has pushed costs for utilities, teacher pay, and unfunded mandates to county governments. Nationally, over 25% of K-12 funding rests with local governments. In North Carolina, most counties dedicate over 30% of their budget to education. In counties with increased needs for school construction, the amount can be over 40%. "Our challenge as a county and as a school system is to make wise decisions about how to handle this situation. Certainly, we can complain about the state and national unfunded mandates and how the Governor and legislators are passing the responsibility to local budgets, however, this approach does not educate our children. "Should you adopt the county manager's recommendation of a 2% increase rather than the traditional 5% increase, make no doubt about impact. Programs for children in Iredell- Statesville Schools will be severely impacted. While we have no choice with many of the required increases, the Iredell-Statesville Schools administration will recommend to the Board of Education that we continue our push to increase the local teacher's supplement to meet and exceed the state average of $2700. We are currently below that average with a local supplement average of $2300. The $700,000 proposed increase in the FY05 budget will help us close the gap. We must close that gap. To recruit a high quality teacher for every classroom, we need that tool. A high quality teacher in every classroom is our first priority. "Couple our recommendation and $700,000 less than expected from the county, with a $700,000 redirection from the state, and unfunded mandates from state and federal programs, there will be a direct negative impact on children and the programs that support teaching and learning. The administration will recommend that the Board of Education freeze all vacancies in support positions such as nurses, social workers, counselors, psychologists, media, custodians, maintenance, transportation, technology and secretaries. Hopefully, there will be enough retirements and resignations to avoid a reduction in force. However, current numbers indicate a reduction in force may be likely. "As superintendent, I am uncertain if the Board of Education will accept this freeze on hiring. Because the reduction in funding proposal from the County Manager was presented on May 21 to my office, the Board of Education has not had an opportunity to meet and discuss the issues. It is my hope that the Board of Commissioners will recognize the certain negative impact of this approach on the students of Iredell-Statesville Schools and restore the funding levels to the traditional 5%. "Another concern is that the county manager's budget will have a long-term adverse affect on the recruitment of quality industry to our county. While education is not always the top concern of companies looking to invest in a county, it is certainly a major concern. In a time of expansion of companies like Lowe's, the airport, and rapid residential growth in our county, now is the wrong time to signal anything other than strong support for schools. "Best wishes during your very difficult deliberation on the many issues you have to deal with in county funding." Dr. Cash said that pertaining to capital needs, the system was still standing by the task force's recommendation. He suggested that a committee, composed of the chairman of the commissioners, along with the board of education chairman, and others, be created for the purpose of (1) reviewing creative funding approaches and (2) to prioritize the needs. Chairman Johnson expressed his willingness to assist. He mentioned, however, that the county was experiencing a downturn in revenues. Johnson said the county had been fortunate in the past because the recessions had been "shallow," and that this area had been capable of 4 "bouncing" back fast. Mr. Johnson said that in reference to capital needs, any recommendations needed to be realistic and within the guidelines of the Local Government Commission. Cash said a long-term solution needed to be found regarding rental units. Johnson mentioned funding cuts out of the Governor's office. He said it would be foolish to use any anticipated funding from the state to service debt. Mr. Johnson said any financial plan needed to have some latitude, especially in the Mount Mourne area of the county. Dr. Holliday said a growth update from OR ED should be available in June. Commissioner Tice asked if the update would include the impact of the Lowe's Company in the Mount Mourne area. Dr. Lane said the OR ED projections would be "tweaked" with the Lowe's numbers. Commissioner Norman asked if the growth projections for the Exit 45 area were available. Dr. Lane said the system relied upon the subdivision counts from the county's planning/inspections department. Tice said more classrooms would be needed when the Lowe's Company expanded. Dr. Holliday said the school system's plans had been built in phases. He said a phased plan had flexibility potential, but they were more expensive in the long run. In regards to the committee proposed by Dr. Cash, Chairman Johnson said he felt the county manager and the school superintendent should be included. Commissioner Madison said that when he looked at the educational facilities recently built, he was proud of them, especially when they were compared to what existed before the 1990s. He said the county and school system were not where they should be in regards to facilities, but changes were being made. Mr. Madison then referred to a letter from a Celeste Henkel parent who had complained about the school not having heat for 28 days this past winter. He said the system had funds to make maintenance repairs and he questioned why the problem had not been corrected. Dr. Miller said, "We had a guy babysitting the boiler." He said the system did not want to shut down a facility during the school term, and the boiler was scheduled to be replaced this summer. Miller said he had been with the system for 34 years, and it was difficult to prioritize the needs. He said roofing projects, alone, could "eat up the budget." Commissioner Norman said he felt some public relations in the boiler matter might have helped. He said the parents needed to be educated about the facilities and what was actually occurring. Dr. Miller said he cared about the welfare of the teachers and kids, and the system tried to maximize its funds. Dr. Cash said the system refrained from spending money on an item scheduled for replacement. He said, otherwise, the system would be criticized for wasting money. Dr. Holliday said that in regards to the fund balance and maintenance problems, that if emergencies occurred, the money was dedicated. He said, however, the longer the long-range plan was delayed, the less money remained in the fund balance. Chairman Johnson said he would contact Dr. Cash. Johnson also said, "This is not about me, it is about what's best for the county." 5 (The school system's requested FY 04-05 budget, and the county manager's recommended figures are as follows.) Requested Current Expense $ 24,520,780 Capital Outlay 3,452,744 Recommended $ 23,822,139 (2% + ADM growth) 3,286,602 At approximately 11:45 a.m., Chairman Johnson recessed the meeting for a lunch break. 1:00 P.M. Continuation of the May 27, 2004 Budget Session County Manager Mashburn said the Solid Waste Fund was in a suitable financial condition to repay the General Fund for assets transferred in 1992, and this was how he proposed to balance the FY 04-05 budget. Commissioner Madison said he thought it would be better to use the funding on capital needs. Madison said he felt it wouldn't be prudent to use the money on reoccurring expenses. Specific departmental budgets were then discussed. 544 -Fire Marshal: Chairman Johnson asked about the requests for the SUV to replace a 1994 Dodge van and the new vehicle. Blumenstein said the replacement purchase was recommended, but the other vehicle was deleted due to the elimination of the new employee position. 655 Parks/Recreation: Chairman Johnson said he received numerous calls about the county purchasing SUVs. He asked about the new one being recommended for recreation. Blumenstein said the recreation director would drive the vehicle. Mashburn said the staff preferred an SUV due to its versatility. 650 Public Library: A question was raised about the feasibility of retaining the bookmobile since the county had opened the Harmony branch. Mashburn said the staff still felt the mobile unit was justified. Commissioner Madison asked if it would be more feasible to bring the patrons to the library using 1CATs rather than maintaining the bookmobile and taking the books out to them. Mashburn said the staff would research this suggestion. 410 Commissioners: no changes from county manager's recommended budget 415 Administration: no changes from county manager's recommended budget 420 Human Resources: no changes from county manager's recommended budget 425 Elections: no changes from county manager's recommended budget 430 Finance: Blumenstein said a grants coordinator position was cut in the FY 04-05 budget, and it had also been deleted from the current year's budget. She said, "This is the last year we can go without a new employee." 6 435 Tax Administration & Land Records: no changes from county manager's recommended budget 445 Information Systems: Blumenstein mentioned that this department was steering away from a mainframe type system. She said the Hewlett Packard 3000 handled the tax records and the Hewlett Packard 9000 handled the county's payroll and financial records. 450 Register of Deeds: no changes from county manager's recommended budget 455 Facility Services & Support Services: no changes from county manager's recommended budget 457 Meetinv Street Service Center: no changes from county manager's recommended budget 458 Government Center South: no changes from county manager's recommended budget 460 Vehicle Services: The county manager mentioned that one new mechanic position was recommended. 465 Courts: Mashburn said $400,000.00 was expected in court fees; however, the expenditures were expected to be $659,303.00, and this didn't include capital items. He said the state had been encouraged to increase the fees, but this probably wouldn't help the county since the state dictated how the revenues were used. 470 Legal: Mashburn said this budget was left at the 03-04 level, due to the difficulty in predicting how much might be needed. 475 Economic Development: Blumenstein said the budgeted amount for this department included the payments to industries that had met their threshold at January 1. 480 General Governmental: Blumenstein said collision insurance had been dropped except for EMS and the Transportation Department. She said, however, $34,000 had been inserted into maintenance/repairs in case a department needed it. 485 Special Appropriations: Mashburn said the formula being used to appropriate funds to the rescue squads needed to be reviewed. Blumenstein mentioned that a few months ago, she was asked to investigate a low- interest loan for the Iredell Rescue Squad. She said the squad's real estate would have to be used in the transaction due to its truck's value not being sufficient for the loan. Blumenstein recommended that the rescue squad loan be merged with the DSS capital project financing to save money. 510 Sheriffs Department & 520 Jail: Mashburn said the sheriffs department had requested several reclassifications. He said the Human Resources Department would study the requests, and then they would be submitted to the board of commissioners for a final determination. Madison questioned the need for two sets of turnout gear. Johnson asked about the computer requests. Questions were also asked about the communication expenses. Chief Deputy Rick Dowdle said the computers would replace six-year-old models. He said the VISIONS software that ran all of the department's applications was changing and upgrades were needed. Pertaining to the walkie talkies and the increased phone expenses, Dowdle said that until communications improved, cell phones would be retained until they were no longer needed for the officers' safety. Mashburn asked what a field officer would have in his/her car. 7 Dowdle said a radio, a mobile data terminal, and that some deputies had in -car telephones. He said the ones without car phones had Nextel. He said the turnout gear was a requirement of OSHA, and the outfits were for the detectives when they assisted in fire calls. He said many times, the sites still had "hot spots." Dowdle said that when the jail satellite on Highway 21 became operational, four new Jailer III positions would be needed. 532 Animal Control: no changes from county manager's recommended budget 536 Communications: no changes from county manager's recommended budget 542 EMS: The board members requested that the staff concentrate on mailing the invoices for the medical calls as soon as possible. Blumenstein said the county would contract with a company this summer on the billing, and this would enable the staff to get caught up with delinquent accounts. Commissioner Tice asked about the EMS satellite base. Mashburn said the staff was working with the Lake Norman VED officials on possibly stationing an EMS satellite at their facility. He said the current Mooresville base, at the government center south, needed to be moved elsewhere, but in the same vicinity. 546 Emergency Management: no changes from county manager's recommended budget 560 Planning/Inspections: no changes from county manager's recommended budget 575 Cooperative Extension: no changes from county manager's recommended budget 600 Health: Mashburn mentioned that four new positions (1 public health education specialist; 1 dental asst., and 2 environmental health specialists) were recommended for this department. Commissioner Madison questioned the need for the two environmental health positions due to the department having so many problems filling vacant positions. Mashburn said the health director had investigated the possibility of contracting out for some of the environmental work, but this turned out to be impractical for the county. He said the health department planned to review the starting salaries for the sanitarians in an effort to make the positions more attractive. 610 Human Services Building: no changes from county manager's recommended budget 615 Contracted Human Services: Commissioner Williams mentioned the $50,000 for the Crossroads Crisis Relief Center. He said there would be an advantage in having the pre - commitment center here, because the deputies would not have to drive to another county to transport the patients. 630 Social Services: The staff noted that there was an increase in Medicaid; however, it was the smallest seen in many years. Madison asked about the three new positions for the income maintenance division. Blumenstein said there was high turnover in the division, and it was hoped additional people would help to provide stability. She said that in 2002 and 2003 there were 43 vacancies out of 61 income maintenance positions. 635 Veterans Service: Madison discovered an error on the manager's recommendation listing and said $5,000 could be deducted from the budget. 9 650 Library: The board members stressed the importance of alerting the public about the overdue book charge that was being increased from 5¢ to 25¢. Mashburn estimated the new library would be ready for occupancy around the end of December. 655 Parks & Recreation: Blumenstein said the estimated fund balance for the parks capital reserve fund at June 30, 2005 would be $786,871. She said this amount could be divided by three since the southern sector (Stumpy Creek) was separate. 800 Transfers to Other Funds: Mashburn said that $1,500,000 had been recommended for the Capital Reserve Fund. Commissioner Madison referred to his earlier comment pertaining to the Solid Waste Fund amount of $1,867,935 that was being used to repay the general fund for assets transferred when the enterprise fund was created. (Madison had earlier stated that he preferred to use the $1.8 on capital needs instead of reoccurring expenses as proposed by the county manager to balance the FY 04-05 budget.) Solid Waste Disposal Fund: Mashburn said the budget included funds for the proposed West Iredell Transfer Station. He said no changes were being proposed for the solid waste fees. MOTION by Commissioner Madison to approve Budget Amendment #40A to repay the General Fund the cost basis of assets transferred to the Solid Waste Enterprise Fund in 1992. VOTING: Ayes — 5; Nays — 0. The budget amendment will be as follows: Account Solid Waste Enterprise Fund Existing Change Amended 524880 499502 Appropriated Retained Earnings (98,500) (1,867,935) (1,966,435) 520751 576010 Transfer to General Fund 144,685 1,867,935 2,012,620 General Fund 104880 495052 Transfer in from Solid Waste (144,685) (1,867,935) (2,012,620) 100800 576040 Transfer to Capital Reserve Fund 932,095 1,500,000 2,432,095 100536 610000 ECOM - Simulcast System 281,975 150,000 431,975 100532 605000 Animal Control -Buildings & Improvements 30,000 40,000 70,000 100457 532500 Meeting St. Service Ctr.Main/Rep. 12,700 39,935 52,635 100615 564038 Crossroads -Crisis Center - 50,000 50,000 100435 537508 4351 Tax Assessor - Cont. Services- Other 160,604 88,000 248,604 Capital Reserve Fund 344880 495010 Transfer in from General Fund (932,095) (1,500,000) (2,432,095) 340800 576040 10904 Transfer to NCDENR Renovation 615,567 988,808 1,604,375 340800 580050 Future Capital Projects *511,192 511,192 344880 490000 Financing Proceeds -DSS - (434,400) (434,400) 340800 580050 Future Capital Projects *434,400 434,400 Future Capital Projects * 511,192 * 434,400 945,592 "old library" Renovations Cap Proj. Ord. 7/1/04 (800,000 Bol. Capital Reserve $ 145.592 (doesn't include interest earnings) Volunteer Fire Departments (VFDs): Commissioner Williams said the VFD budget process had gone smoothly. 9 Mashburn said the Mount Mourne VFD had lowered its tax rate to three cents. He said Shepherds had requested a six cent per $100 valuation, but the current $.0425 was recommended. Commissioner Tice asked how the board could justify an increase for East Alexander and not Shepherds. Mashburn said the county had an agreement with Alexander County and the increase brought parity. Chairman Johnson asked how much a penny generated in the Shepherds district. Blumenstein said $87,875. 620 Community Transportation & 622 ICATS: Blumenstein explained that the 620 section was for grant administration data, and the 622 section itemized the operational expenses. 911 Communications: no changes from county manager's recommended budget ADJOURNMENT: MOTIO by Commissioner Madison, at 5:00 p.m., to continue the budget meeting until 4:00 p.m., on Tuesday, June 1, 2004, for the purpose of discussing the Shepherds Volunteer Fire Department's budget request. VOTING: Ayes — 5; Nays — 0. Approved: 10 Clerk to the Board