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HomeMy WebLinkAboutMarch_30_2013_Budget_Session_MinutesIREDELL COUNTY BOARD OF COMMISSIONERS BUDGET SESSION MINUTES MAY 30, 2013 The Iredell County Board of Commissioners met on Thursday, May 30, 2013, at 5:00 PM, in the Iredell County Government Center (South Wing Conference Room), 200 South Center Street, Statesville, NC. Board Members Present Chairman Steve Johnson David Boone Renee Griffith Ken Robertson Absent: Vice Chairman Marvin Norman Staff present: County Manager Ron Smith, Deputy County Manager Tracy Jackson, Finance Director Susan Blumenstein, Assistant Finance Director Deb Alford, Fire Marshal Garland Cloer, Library Director Steve Messick, Parks, Recreation and Facility Services Director Robert Woody, and Clerk to the Board Jean Moore. CALL TO ORDER by Chairman Johnson Lake Norman VFD Service Agreement & Discussion on the Countywide Fire Tax Rate: Commissioner Robertson asked if the Fire Tax District Board was agreeable to the last two years of funding to the Lake Norman VFD in the service agreement. (The funding was as follows: Year 4 (FY 2016-2017) _ $250,000 and Year 5 (FY 2017-2018) _ $250,000.) Fire Tax District Board Chairman Frank Phillips said the cost would be another $72,000 a year due to the first three years being $178,000 each year. He said it was felt the appropriation to Lake Norman would be through the fund balance. Phillips said it was uncertain if the property tax would take care of the appropriation in additional to any other items that might surface. Commissioner Robertson said that if Lake Norman left the countywide fire district, there wouldn't be a fund balance. Chairman Johnson said the agreement would buy enough time for the county to create another method for VFD funding. Blumenstein said the fund balance at June 30, 2013 would be $1.5 million, but this was using the proposed 7.50¢ tax rate. Commissioner Griffith said if the fund balance was healthy the county could look at a hybrid system of funding in the future. Robertson asked the definition of a hybrid system. Johnson said some counties used a fire tax to fund a countywide fire service at a basic level of service. He said they then subsidized over and above the amount out of the general fund. Commissioner Boone said Davie County used this method. Johnson asked if the existing fund balance, as projected, would carry the county through until a new method of funding was established. He asked the total fire budget. ratings. Blumenstein said the total expenditures were $5,362,730. Phillips said the Department of Insurance was changing the requirements for the ISO Johnson asked the effective date for the new rate changes. Phillips said in two years. 1 Commissioner Robertson asked if the board was agreeable to increasing the tax rate to 7.50¢. Johnson said the question needed to be should the tax increase from 6.50¢ to 7.00¢, or up to 7.50¢. He said in his opinion 7.00¢ was adequate. Johnson said there would be a 21% fund balance. Commissioner Griffith said a quarter cent of the increase would go to Lake Norman, and the other quarter cent was for the fund balance. Commissioner Boone said the quarter cent might be justified due to the Lake Norman situation; however, if the taxes were increased in one area, there should be a corresponding reduction elsewhere in the budget. Boone said if $500,000 could be deleted from the budget and there was a reduction in the general tax rate by a quarter cent, he could support the measure. Griffith said a quarter of a cent was $178,000. Boone said correct; however, a quarter cent of the county general fund was about $500,000. He said most counties had individual fire districts and having a countywide district was somewhat of an "anomaly." Boone said research had been done, and Iredell County was generous in its appropriations to the fire departments. OTION by Commissioner Griffith to move forward in setting the countywide fire tax rate at 7.00¢ and of the increase that $178,000 be designated for the Lake Norman Volunteer Fire Department and the remainder to be placed into fund balance for the fire tax district. VOTING: Ayes — 4; Nays — 0. Chairman Johnson said the service agreement stipulated the county would fund Lake Norman at $178,000 a year for the next three years and $250,000 each year for two more years. OTIO by Commissioner Robertson to approve the Lake Norman Volunteer Fire Department Service Agreement. VOTING: Ayes — 4; Nays — 0. 650 — Library: No changes from the county manager's recommended budget. Library Director Steve Messick said there was only a $27,502 or 1.4% increase in the budget for all three libraries. He said many line items were lower this year, but the areas of increases were in (1) new book purchases (2) travel increases for the courier and (3) a computer server replacement. In regards to e -Books, Messick informed the board that when these were purchased, the buyer was actually buying a license to use the book. He said the buyer was not actually buying the book, and the publishers charged libraries more than regular customers. Messick said librarians across the country were trying to get this practice changed. SCHOOL BUDGETS Mooresville Graded School District: Mooresville Graded Board of Education Chairman Karen Hart, Superintendent Dr. Mark Edwards, and Mooresville Graded Schools Finance Officer Terry Haas shared information about this school district. Hart said Mooresville Graded would experience growth in the coming year. She asked the board members to continue funding the system at the same current expense level as in the past. Johnson said a conversation had occurred with General Assembly Representative Rena Turner. He said it appeared the sentiment in the House would be that the overall cuts would be similar to the ones in the Senate, but there was a strong movement on the House side to not designate the cuts; rather there would be flexibility to allow the school systems to determine where the reductions should be made. Johnson said Turner was aware of the teaching assistant duties and how the elimination of some of these positions would be detrimental to school operations. FA Dr. Edwards made the following points in regards to the school district. 1. Over 800 students receive special education and funding has been cut. Many of the students have severe emotional problems. 2. Next year, there will be over 30 students per class in grades 4 through 12. The classrooms were built for an average of 25 students; compounding the problem is that students are larger today. 3. Mooresville was second in the state last year in overall academic achievement. The district ranked third in the graduation rate. 4. The overall poverty level is at 40%. 5. The district has a need for more interpreters. 6. In terms of facility needs, Mooresville High School's gym and auditorium need improvements. Almost a million dollars has been invested in the high school auditorium over the last 14 years. Four years ago, $200,000 was spent on roof repairs. There have been asbestos issues and the chiller has been replaced. The high school gym is the only one in the county without air conditioning. Commissioner Robertson said he had received comments and questions from the public about the schools. He then asked the following questions indicating they were some he had received from the public. Robertson: Some individuals have said the reasons the gym and auditorium are in need of repairs might be due to the system taking its maintenance money and putting it on computers. How would you respond to this comment? Edwards: We have not spent one penny of maintenance money for this and our investment in maintenance is something we go over in detail. Preventive maintenance and ongoing maintenance has increased over the years to ensure that we take care of our facilities. The source of funding for the laptops was through repurposed existing funds such as textbook materials, plus other materials. We stopped buying textbooks and went to digital resources and we've used that funding. That has been the primary source of funding. When Mooresville Intermediate was opened, part of the capital project fund included equipping the school. We did use some money at that time for laptops which was not only permissible, but to some extent it was required from the state. There's a level of technology per student. We used a little of e -rate funding, and we received one $250,000 grant from Lowes six years ago and it was used for infrastructure. We also received one grant four years ago that was $120,000. Robertson: Were the grants solely for technology or could you have spent them for other needs? Edwards: They were for technology. Our parents and community support this strongly. Robertson: I'm getting emails from people asking why you didn't fix your auditorium and gymnasium on the same bond that fixed Statesville High School's facilities. Edwards: We had growth priorities. At that time our growth rate was double digit. We built Mooresville Intermediate, Rocky River, and then there was a major renovation/expansion at Mooresville Middle. This was all to handle growth. In addition to the needs at the high school, we will also need another new school in the not too distant future. I -SS built some new schools but they took care of Statesville High too. Robertson: Why do you have to have Advanced Placement Courses? Edwards: One, we are doing more on-line courses through the North Carolina Virtual High School, and this does represent some cost efficiencies. In addition, we know that if a person reaches a certain educational level, their earning power is higher and their quality of life is better. There are high expectations for children to rise to their potential. Parents are moving into the 3 area expecting their children to go to college, and scholarships have increased 300% in the past five years. We also have great vocational programs and two weeks ago there were 10 state champions (HVAC and robotics). A few years ago we had the state carpentry student. This student was offered a scholarship, but he chose to start his own business after graduation. Chairman Johnson said the following: "Nobody knows the economic impact of what healthcare reform will have when it kicks in at the first of the year. There's going to be hundreds of regulations. It's going to be a serious headwind for the economy. If you want to know how the economy is going to perform, the best way is to look at the money supply. Bemanke has already said that he will begin to curtail the purchase of bonds. I feel vindicated after Volcker's speech about inflation. The problem you're going to have, and the real test on how they will manage the economy is going to occur in next year for the following reasons. There're three ways the Federal Reserve controls the money supply: the discount rate, the reserve ratio, and open market operations. He's already told you that he's going to curtail open market operations, so he's going to quit buying any bonds. As far as the discount rate, how do you go below zero? Basically that's about what they are charging banks right now ... zero. He's got this twist thing going on where in some cases they actually get a negative interest rate, but you can't go much below zero. That leaves only one option, the reserve ratio. The danger with the reserve ratio, if you drop it one tenth of one percent, that's $80 billion that's ejected into the economy. That's the reason they seldom ever use it. It's the reason that in 2008 they basically had a reserve ratio of zero. They were just pumping money into those banks to keep them from going broke. Now, they raised the reserve ratio to make sure they had liquidity in case this happened again. Now, that they are satisfied with the additional liquidity, I think what they are going to do is drop the reserve ratio. That's going to begin pumping money into this economy. The danger is inflation. That's a serious danger, but if that doesn't work, we're done. There's nothing left on the monetary side. All that's left is the fiscal side. That's taxes and regulations. You've got a President who is not going to cut taxes. Every time you had an economy like this, when you came out of it, it was because of a tax cut. You may disagree, but just read the history. I'm scared they are going to start pumping money into this economy when they quit buying those bonds and that's when the inflation happens. When this rings out, I think you'll have a pretty good idea a year from now on where we are. I'm not borrowing money personally for the next little while or until all that rings through this economy. You don't know where you'll be in the next year; nobody does. You just have to wait and see what happens. We have to be real careful in the next few months. That's the reason that at some point next year when I'm satisfied the Federal Reserve has hit the right tone, if we're in reasonably good shape, I would consider a quarter cent sales tax. Until I have a fixed stream of revenue to support that debt, no sir, no way, no how, and that's where I am on that. Just ride it out a little longer. It's nothing personal. It's all business." Iredell-Statesville School Svstem: Board of Education Chairman Dr. David Cash and Superintendent Brady Johnson discussed the needs of this school system. (Numerous staff members and other board of education members also attended.) Dr. Cash said 2012-13 had been a "tough" budget year. He said the budget was revamped as much as possible but with a goal to preserve vital programs and an emphasis on safety and maintaining opportunities for learning. He said the system was facing more cuts this year on the federal and state level. Cash said nearly 40 teaching assistants would be lost and these individuals were vital in the classroom. He mentioned concerns that the student performance scores would start going down. Supt. Johnson made the following remarks: 1. The challenges the system faces start at the federal level with sequestration and this will be approximately $684,000. These cuts will impact Title I schools and the Exceptional Children's (EC) Department. Forty-three percent of the students are in the poverty threshold, and they qualify for free/reduced lunches. This number has increased by 11 % in four years. The schools with high levels of poverty will be impacted by the federal cut. Participants in the EC programs vary in their needs such as: (1) students with mild speech impairments (2) students with tracheal tubes (3) high school aged students still wearing diapers and (4) students who are totally non -communicative. 0 2. The state has alerted the system about teaching assistant cuts which is difficult to understand since the state has requested all students to be able to read by the end of third grade. The system has an 81% reading level, but the ones not at this level are primarily (1) EC students (2) students being shifted from one foster home to another (3) students who do not speak English or (4) students from poverty-stricken homes. If the system complied with the state cuts on teaching assistants for the upcoming year, 81 positions would be lost. However, after some review, only 40 will be laid off in the Iredell-Statesville System. 3. Student Services has been hit by budget reductions over the past four years. North Carolina is remodeling mental health and many students in school today would have been in a locked facility a few years ago. Many individuals would have been receiving day treatment, but they are in the schools today. The Student Assistant Program has been cut 50% in the past four years. At one time there were five social workers, but positions had to be eliminated. There is a possibility of having only one social worker to serve 21,000 students. 4. Iredell-Statesville would like advanced technology similar to Mooresville Graded. A $20 million grant was awarded, and it will be used for the middle and high schools with the exception of Lake Norman. In order to qualify for the grant, there had to be a poverty threshold of 40%. When Lake Norman was added, the system's poverty level was at 38% which was too low to qualify for the grant. Assistance is needed to buy computers for Lake Norman. 5. There are mandated increases and utility rate increases. In addition, personnel insurance and retirement costs will be higher. 6. There are other on-going technology needs. 7. Local financial assistance is needed. The taxpayers have been given a good return on their investments. Even with the recession, Iredell-Statesville has created new opportunities and new choices for the students that other communities do not have, for example, the Career Academy, the IB program, the dual immersion program, the alternative schools, and the early Chairman Johnson advised the Iredell-Statesville officials that a discussion had occurred with General Assembly House Representative Rena Turner about the funding cuts. Johnson said there were serious discussions occurring on the House side about allowing the local educational units to have more flexibility in where to make the reductions, especially in regards to teaching assistants. Chairman Johnson voiced concerns about incurring debt at this time, and he made the following comments: "In view of the fact the state is refusing to take the start up money for healthcare reform on the front end, that's primarily why the schools are being cut. They are not taking that money so they have to go shopping. They are grabbing the low -hanging fruit and you're (school systems) the first stop. I think over the long term, it'll benefit you because you won't have this spending wedge or the great weight of those expenditures of healthcare on the state budget. This is because the cost of that over the long run will be huge, and they are going to crowd out a lot of spending. Over the long term it may be difficult, but I think they are making the right decision. The other thing that causes me to be reluctant to take any action right now is because of the associated cost of healthcare reform kicking in at the first of the year. Nobody can tell you how that is going to affect the economy. It is a serious hit, and this economy is very fragile. It is very fragile, and in my mind, and in the mind of a lot of other people there is a problem because on the political side, which is the fiscal side of economic policy, there is no leadership. You can go back nearly a hundred years and every time we've been in this shape what got us out were tax cuts. They are not coming. A third of the government up there is for it and two-thirds are against it. It's not happening. What has kept this economy going is monetary policy, primarily from the Federal Reserve. The Federal Reserve controls the money supply by three ways: the discount rate, the reserve ratio, and the open market operations. This is the particular part that causes me real concern over the next year. In terms of the discount rate, how do you go below zero? You don't. He's got this twist thing going on that in some cases gives banks a negative discount. We've been told that some day open market operations will end. He's going to quit buying bonds. The rising house prices will stop then. The other thing is the reserve ratio. That's all he's got left. In his quiver, that's the only arrow he has left. The Federal Reserve seldom uses that; it's very seldom. They used it in 2008 and 2009 because the banks were failing and 5 they basically gave them a reserve ratio of zero. They just pumped money into them to keep them from going belly up. On the ones that didn't want to take it, they told them they'd close their window at the Federal Reserve, and they had to take it. So, it will have to go to the reserve ratio. I feel vindicated by what Paul Volcker said the other day when he spoke in New York by saying the great danger now, if they go there, is inflation. The estimate of one-tenth of one percent puts $80 billion of cash into this economy, and in inflation that's too much money chasing too few goods. You have serious inflation and then what's going to happen? Interest rates are going to go POW, and the economy is going to stop. I think it will take you at least a year from now to know how all of this will ring out. Quite frankly, those are reasons to avoid the incurrence of debt right now. I wouldn't handle my money that way, and I'm not going to handle anybody else's money that way. I'll take whatever beating I've got to take. It's not happening. I told a fellow on the phone this morning that I learned pretty quick doing metal work that you have two kinds of metal. There's soft metal, and if you beat on it, then it crumbles. If you have good metal the more you beat on it the harder it becomes. I said, `Buddy, you're beating on pretty good metal right now.' I'm not going there. if you want to talk about this a year from now when all this rings out, and the earth is not shaking under my feet about a quarter cent sales tax, we'll have something to talk about. But, to do it right now, with no revenue stream and whatever sales tax number we come up with on a quarter cent --there should be some wiggle room and not knock off the whole thing because you don't know what a penny on the sales tax will bring. FII consider that next year, but I'm not interested right now. There's nothing personal in this, it's all business. I appreciate what you all do, but anyone who incurs that kind of debt rieht now in my estimation is very foolish." Supt. Johnson said he was reminded of a quote from Colin Powell on leadership as follows: "The day people quit bringing you their problems is the day you cease to be the leader." Supt. Johnson said that all the school officials were doing was telling the facts and challenges. He said, "I don't think there's a person in this room tonight who doesn't care about kids, and I don't think there's a person sitting in here that doesn't understand that you wouldn't be where you are today without your education." Dr. Cash said one year in a student's education was a significant percentage between primary grades and high school. He said one year could follow a student for the rest of his or her educational career. Dr. Cash said he would not inform the board of commissioners on how the needs should be funded, but he would share with the commissioners what the school needs were. Commissioner Boone mentioned that a couple of weeks ago an e-mail was sent to Iredell- Statesville's parent list. He said the e-mail had been shared with him because several parents were not happy about the matter. Mr. Boone said the following: "It was sent out on your server to the official e-mail list of Iredell-Statesville Schools, and it has your logo on the letterhead. The e-mail urged parents to contact the General Assembly members to oppose HB 273, the bill relating charter schools. I'm not getting into the merits of that bill as it may have been a good or bad bill. I don't know. I do know it passed the House by a pretty healthy margin so apparently many people thought it was a good bill. Be that as it may, your system sent out an e-mail urging parents to contact their members of the General Assembly and ask them to oppose that bill. It gave their contact information and so on. A few days ago, another e-mail went out urging parents to come to our commissioner's meeting last week to basically ask for more school funding and to also contact us. That was also sent out on the official list with the school logo, and it had a set of talking points attached. If you wondered why a lot of the speakers were saying the same thing at the meeting it's because they were reading off the talking points. The facts of the talking points were technically correct, and I could go through all of them, but they were cherry picked to help your point of view. As far as I know, it is perfectly legal to do that, but in my opinion I don't think it is proper or ethical to use taxpayer resources like that for political lobbying. Those resources and the e-mail lists are for legitimate educational purposes. They are not for political lobbying. The school board members as individuals, the school employees as individuals. and the parents as individuals have every right to contact us, and I have no problem with that whatsoever. That is a right protected by the First Amendment. I just don't think taxpayer resources should be used for it. If the school board collectively passed a resolution and conveyed it to the proper authority, then I have no problem with that. I have no problem with you coming to present your needs; that's a part of your job. But to use taxpayer resources, or to have staff members and school employees, who are basically on the clock using their time to engage in political lobbying I think is unacceptable. I'm sure there're some employees who feel pressured to do things. If they know the administration thinks a certain way, 5 it takes an awfully brave employee to speak out and that's just a fact of life. If there is a referendum in the future, I have a problem with using taxpayer resources to advocate one way or another in that. That has happened before. As individuals I have no problem, you have every right to speak your mind, but you shouldn't be using taxpayer and school resources that are supposed to be used for education to engage in political lobbying. I would hope the board of education would take this to heart and enact some policies to prevent this in the future." Commissioner Boone also said the following: "Several people from time -to -time have said the schools need more money. They said they would not mind paying more taxes if they knew it went to the schools. Many others are probably paying all of the taxes they can afford. They don't want to be taxed more. It would take an act of the General Assembly, but I would suggest that you see if a mechanism could be set up where on the tax bills, taxpayers could make a voluntary contribution. You could maybe generate the amount that a five cent or a ten cent ad valorem tax would be. A person could check a box to pay a hundred extra dollars, and it would be earmarked for the school system. You could take the difference between our rate and Mecklenburg's rate, or whatever. There could be several methods, but the tax bills would have to be clearly marked so people would know it was voluntary. This would give people a mechanism to pay some extra money, and for it to go the school system. There is a little bit of precedent as the North Carolina Income Tax Forms have places to donate to the Wildlife fund, and there are three or four other preferences. I don't know how much money would be generated, but it's something that might provide a little additional funding. I don't see why anyone would object to it. I guess someone could make a donation anyway, but if it's on their tax bill, and the county's processing the bills, it would be much easier. That's one constructive suggestion that I have." Commissioner Robertson asked the following questions. Robertson: The shortfall that you will have from the state this year is how much? Supt. Johnson: On federal and state it is about $6 million. Robertson: If we had a quarter of a cent sales tax it would generate a little over $4 million. My point is that even if we passed it and gave all of the money to lredell-Statesville and didn't share any with Mooresville or Mitchell Community College, the revenue would not close the gap. I just wanted to bring this point out. I get e-mails from people and sometimes there are solutions suggested. I would like to share some of the solutions from the e -mailers. Some of them say that the IB program is excessive. (Robertson reiterated that these remarks were from people who had e-mailed him.) They say you're catering to rich kids. You are catering to smart kids. Mooresville doesn't have an IB program, why do you have to have an IB program that's costing money. Why don't you go back to regular education? I asked a similar question to Mooresville about that system's advanced placement classes. The e -mailers say you could close the budget gap if you did away with all of the frivolous courses. Supt. Johnson: In North Carolina, the General Assembly has decided that it wants an educational system that is super competitive. They did that when they took away the cap for charter schools. If I don't provide programs like this, someone else will, and they'll do it for profit. I have a big problem with private businesses making money off of educating kids, and so to be competitive, we have to offer choices. If we don't, someone else will step in and do it. As far as those programs being excessive, we fund those on the same per pupil allocation as every other student. I will say that we have our first cohort graduation this year, and those kids are averaging approximately $200,000 each in scholarships. Six million dollars for this first class, and the return on investment is tremendous. I think that the people who are in this program are extremely pleased, and it has drawn a lot of kids back into the system who had left us and gone to private, parochial and charter schools. We see it as the market for the free -enterprise system. I think that's how that works. You listen to your customers and give them what they're asking. 1 think it has been one of the best decisions we have ever made. I have been told by business people in the community that it is a marketing tool that they use when recruiting medical professionals to the community. One of the first questions they ask is, `Tell me about your educational system.' Robertson: So it doesn't cost more to teach AP Calculus than it does to teach remedial Algebra to 25 kids. 7 Supt. Johnson: No. The only difference is that they have to pay for an exam. Robertson: Let's talk about the Career Center. It's got to cost more money to teach how to fix HVAC units or to repair car engines. Is that not a luxury we could scale back on to save some teacher assistants? Supt. Johnson: I think if we are serious about making all kids either college or career ready, then adding that choice, and again it is a choice for our county, was a wise move. I will say the career center is successful because of the economies of scale. We can't build an automotive facility at five high schools. We can only build one of those, and those kids come to that center. We can't build a culinary arts program in all five high schools. We can't have the lab facilities for the nursing programs in all five high schools. I think it is a wise financial decision for this community. I will say this: We've been recognized by the state on the career center. We get a lot of visits from other school systems to come to that facility. They are trying to figure out a way to do the same thing that we've done. The real payback for this community was that the investment that was made there was primarily done with lottery dollars. The taxpayers of Iredell County have very few dollars invested in the Career Center itself. It is serving the needs of a special group of students, and it is helping them to be super competitive for careers. Let me give you one example, and this is the CNA program. The first time we gave the test to our kids, and this is the state licensing test, we had a 99.5% pass rate. Those kids are not only walking out of school with a high school diploma, they are walking out with a professional license. That makes them immediately employable at Iredell Memorial Hospital or Lake Norman Regional. It also means that those kids pursuing medical careers have a huge step up towards being competitive and ready to enter that course of study. This is a huge benefit to the parents and kids. We are committed to growing the Career Center. It is creating tremendous opportunities for kids. We had three kids who placed third in a southeast regional competition. Each one of the kids that participated walked out with $19,500 in scholarships. Just think of the return on investment that the taxpayers are getting from that school. Robertson: I realize it is hard to compare apples and oranges. You were talking about upgrading for technology and the only way you could get the grant money was to exclude Lake Norman. I understand you didn't write those rules, and I believe you did right in making the exclusion in order to get the $20 million for the rest of the system. What I don't understand is that Mooresville was able to get its laptops with some grants, but many were acquired by not buying textbooks, electronics, maps/globes, and so forth. Can you not do the same for Lake Norman High School and get the same technology using Mooresville's approach. Supt. Johnson: If I had another 18'/2 cent on the tax rate we wouldn't be having this conversation. Mooresville is a great school system and we have a good relationship. We admire them, we work well together, we collaborate with them, but Mooresville is extremely blessed that it is only one of two systems in North Carolina where the board of education has the power to levy taxes. They have done that and raised the tax rate by a nickel last year. I think if you asked them: `If the 18'/z had been removed could you have done this?' I think the answer would be no. When you indicate the two systems should be on the same page, financially we will never be on the same page, because they are a better funded school system. Had we not gotten the grant, the kids in Iredell-Statesville would never have access to what Mooresville got. I guess we're saying, `I raised 95¢ so give me 5¢.' Commissioner Griffith said, "I don't believe 1 ever heard any commissioner asking the Iredell- Statesville System to get on the same page as Mooresville Graded." Supt. Johnson: I read that in the paper. Robertson: Is the school system receiving any negative remarks from the Lake Norman parents? Supt. Johnson: As a matter of fact, last night we met with the parents in the Lake Norman community. They are very excited about it. They certainly want their children to participate in this. We have told them that we are knocking on doors looking for private funding. We told the parents that if they knew anyone that might want to donate that Iredell-Statesville would contact them. We had a $5 million innovation grant that was received about 2'/2 years ago, but it required a 20% private match with a 30 -day deadline to raise $1 million. We did it though. We 3 are spending a lot of time looking for private funding. We are not going to leave one school behind. Dr. Cash said the use of e-mail to inform the public about school needs was a matter of "desperation." He said many times important information was received at late dates and mechanisms such as e-mail were used to muster people's support. Cash said, "This is the most desperate I think I have felt since I've been on the school board. I don't want to be dramatic, as I'm a realist, but we see quality education being very much threatened in our community as well as across the nation. We are not apologizing, because sometimes we've had to act in haste to respond before decisions are made. I'm not going to apologize that we are using every resource that we can think of to come up with every possible funding source that is ethical to get funds to provide what these kids need. I think that's our role as school board members and as citizens." Supt. Johnson said the e-mails to the parents came from him. He said a discussion with the board of education attorney would occur to ensure that everything was legal and ethical. Supt. Johnson said he felt this was a part of the democratic process. He said, "I've been told by people that they don't hear this information... it doesn't get out." Boone said, "The information they don't hear is the opposite. They hear your information from the press all the time. They don't hear the other side of it very often." Supt. Johnson said he didn't want to do anything illegal. Boone said he didn't suggest that it was illegal. He said, "I think it is legal. I didn't suggest otherwise, but I don't think it's ethical. I don't think it should be legal, and I think the laws should be stricter than they are. I feel very strongly about that. This board doesn't do that and most other governmental bodies don't do that. 1 don't think it is a proper use of taxpayer funds." Boone said it was known there had been cuts in funding for the schools as well as other programs. He said, however, this occurred after several years of rapid increases in funding. Mr. Boone said, "Compared to the late 1990s, schools are in better shape in constant dollars than they were a number of years ago. You have to look at the matter over the long haul. The bottom line, and this is what you don't hear a lot about is in the amount of county funding, and I know we are not a low wealth or population county, and so forth, so we get shortchanged on all of that. We would like to see the state formula changed, but it is what it is. As far as the amount of money that Iredell County provides to the school system per pupil we are near the state average. Now you could take the mean average, and it would be a little higher because of a few high spending counties like Mecklenburg distort the mean. That's true in a lot of statistical data. We rank near the middle in our funding on per pupil for current expense. For capital expense, we rank well above average. In bonded indebtedness, we rank way above the state average. About one-half of the county budget goes to fund the schools. As far as taxes, we are blessed with a good tax base which allows us to have a lower rate. For instance, your talking points cited five counties (Catawba, Alexander, Rowan, Davie and Lincoln) with lower tax rates. If you take the actual amount of tax money per capita, the amount of property tax per capita, we collect more than two of those counties. We are pretty much in line with the other three. Statewide we are pretty close to average in the amount of property tax per capita that we collect. In current expense school funding, we were right in the middle of those three counties. In capital expense the five-year average on the North Carolina Association of County Commissioners' Budget & Tax Survey, we paid more than four out of the five counties. Iredell County is pretty good to its school systems. We are not one of the lowest, and we are not a county that shortchanges the school system. It's true some counties spend more, but there's a lot that spends a lot less. I think a fair bottom line statement is that in current funding we are about average, and in capital funding we are above nifPm as " Commissioner Robertson said it was the state formula that drove the county's rankings down. Mitchell Community College. President Tim Brewer said the college staff could work with the funding recommended by the county manager. He said there was one concern over fringe benefits as there was an anticipated increase for insurance and retirement contributions. Dr. Brewer said capital funding might have to be used for these increased costs. He said other increases were related to security, but state funds could be used for this cost. 7 Commissioner Robertson asked who was responsible for the fringe benefit costs. Brewer said Mitchell had a number of staff members who were county employees, and if the state required an increase for fringe benefits, county funds were typically used. Boone asked for more information about the county employees. Dr. Brewer said the General Statutes stipulated the costs were the county's responsibility. He said the wages were also county expenditures. Commissioner Robertson said the county employees were non -instructors, and Brewer said correct. Dr. Brewer said last year's state budget for Mitchell was $17,770,000.00, but the Governor's proposed budget would include a cut of $665,826. He said with the Governor's proposed budget, the college would have $17,104,000 compared to the proposed Senate amount of $17,413,000. Robertson asked if enrollment had been decreasing. Brewer said it was decreasing or returning to the norm. He said, however, enrollment for summer school had increased. Dr. Brewer said the college was always looking for property near the main campus and in Mooresville. He said the commissioners might be approached in the future about assistance with a property acquisition. 455 -Facility Services: No changes from the county manager's recommendations. 655 — Parks & Recreation: No changes from the county manager's recommendations. 800 — Transfers to Other Funds: County Manager Smith said there was a proposal to move more projects into the $1.6 million capital project fund. He said $477,000 in additional projects would be added, and one half of this would be a roof on the old jail. Smith said another item needing to be brought to the board's attention was the transfer of $1 million to the capital project fund for future projects. He said this money had been obtained through cuts made during the budget process. Commissioner Robertson mentioned uncertainty about appropriating the $1 million at the current time. Chairman Johnson suggested for the $1 million to remain in the future capital projects line item and at mid -year, or at the winter planning session, to make a final decision. Boone agreed with Johnson's suggestion. Johnson requested that the SI million be discussed at the winter planning session. Employee Merit Increases: County Manager Smith said up to a two percent merit increase had been included in the proposed budget. He said it would be possible this year to have a one-time distribution due to having leftover Cycle II funds and lapsed salaries. Commissioner Robertson noted that a one-time distribution would be much easier. MOTIO by Commissioner Robertson to return the employee performance incentive program back to the original intent or to make the incentive a spot award and not one that was pro -rated over the next 12 months. In addition, the staff is authorized to move the funds into the appropriate categories to achieve that end. VOTING: Ayes — 4; Nays — 0. 10 Employee Incentive Program for Cost Savings: Commissioner Griffith asked if any progress had been made on this project. County Manager Smith said Deputy County Manager Jackson was working on the cost savings suggestion program. Commissioner Boone said he was still interested in the program, but it might need to wait until after the budget was adopted. Iredell County Rescue Squad: Commissioner Johnson said another discussion had occurred with the Iredell Rescue Squad officials. He said they had now advised that paving for both driveways would cost $32,000. Johnson said individuals were contacted about the paving work, and a rough estimate of $7,600 per driveway was received. He mentioned a desire to help this squad due to cutting its capital funds in 2008-09. Commissioner Robertson asked if this meant helping all of the rescue squads. Johnson said that to be fair, they all needed more funding. He said the county could allocate the money out of existing revenue in fuel contingency, or the costs could be rolled into next year's budget. Johnson said another option would be to help Iredell Rescue this year and to assist the other squads in later years. Commissioner Robertson asked the contingency fund balances. Blumenstein said $33,000 in regular contingency and $132,000 in fuel contingency. Robertson suggested leaving the fuel contingency alone. He said the funding should be proportional, but it needed to be noted that next year, if there were leftover funds in contingency, that the remainder didn't have to be given out. Commissioner Griffith voiced concerns about sending the wrong message to the Mooresville Rescue Squad, especially due to the agency currently reorganizing. She mentioned concerns about making the appropriation across the board. Johnson said there wasn't a firm number, but if the county made an appropriation, the Iredell Rescue Squad should be able to come up with the remaining cost. Commissioner Griffith asked Fire and Emergency Services Coordinator David Saleeby if making the appropriation would undermine any work that had taken place with the squads. Saleeby said the Mooresville Rescue Squad previously had five sections that it served, but it was only serving two at the present. He said a team had been formed to figure out how to dismantle and reconfigure emergency services in the south end. Saleeby said the Mooresville Rescue Squad understood that changes were occurring. He said that in the third or fourth quarter of this year, a recommendation would be brought to the board regarding the situation. Commissioner Griffith said nearly $8,000 would be Mooresville's share, and Iredell Rescue would be receiving $15,200 out of the $33,000. Saleeby said a meeting had occurred with the North Iredell Rescue officials, and they were comfortable with the budget. Commissioner Griffith again mentioned concerns about giving Mooresville Rescue a share of the money due to the reorganization. OTION by Chairman Johnson to give Iredell Rescue $15,200 for the driveway repairs along with giving North Iredell and Troutman their pro -rata share and for the pro rata share for Mooresville to be held in a reserve fund to be disbursed when the transitional process for the rescue squads in that area were resolved and per the staffs recommendation and the commissioners' approval. 11 Commissioner Robertson noted that pro rata meant what was left in the reserve fund. He said when the contingency funds were gone, the board was done. VOTING: Ayes — 4; Nays — 0. Lifespan Request for Paving Assistance: Chairman Johnson said he visited the Lifespan agency after several requests had been made for paving assistance. Johnson said while visiting the center, he noticed parents struggling to push their handicapped children across the parking lot. He said Lifespan had $6,200 for the grading, as well as the hauling and compaction of the stone. Johnson said the agency still needed $4,000 for the asphalt. Johnson asked if the other board members would be willing to a one-time appropriation of $4,000 for the paving work. Facility Services Director Woody said he also visited the site. He said it was felt that $4,000 would not be enough, and a $12,000 estimate had been provided. County Manager Smith said initially there was only a driveway issue, but the staff had found out the agency wanted additional work such as paving the parking spaces. He said last year Lifespan made a similar request, and at that time the agency indicated this would be a $10,000 project and the agency had $6,200. He said the county had been asked to fill the gap. Commissioner Robertson asked the staff to bring the matter back up at a later date. 436 — County Assessor: Commissioner Boone said there was a new property specialist position included in the budget, but there were concerns about adding another employee even after the county assessor had tried to justify the request. MOTION by Commissioner Boone to instruct the staff to eliminate the new property specialist position. VOTING: Ayes — 2; Nays — 2 (Johnson/Robertson) MOTION by Chairman Johnson to instruct the staff to bring any changes relating to anyone's job function in the county assessor's office becoming an auditor's position to the board of commissioners for approval. VOTING: Ayes — 4; Nays — 0. ADJOURNMENT: MOTION by Commissioner Griffith to adjourn the meeting at 8:40 PM. (Next meeting: Tuesday, June 4, 2013 at 7 PM, in the Iredell County Government Center, 200 South Center Street, Statesville, NC.) VOTING: Ayes — 4; Nays — 0. Approval: 12 Clerk to the Board To appropriate funds from Contingency to Rescue Squads. Mooresville Rescue to be held until released by BOC. BA#37 5/30/2013 Account # Current Chane Amended 105480 530200 Contingency 33,000 (33,000) - 105555 5640.94 Iredell Rescue Squad 236,802 15,200 252,002 105555 5652.00 Mooresville Rescue Squad 141,245 7,820 149,065 105555 5742.26 North Iredell Rescue Squad 109,654 6,070 115,724 105555 5742.62 Troutman Rescue Squad 70,658 3,910 74,568 Lifespan Request for Paving Assistance: Chairman Johnson said he visited the Lifespan agency after several requests had been made for paving assistance. Johnson said while visiting the center, he noticed parents struggling to push their handicapped children across the parking lot. He said Lifespan had $6,200 for the grading, as well as the hauling and compaction of the stone. Johnson said the agency still needed $4,000 for the asphalt. Johnson asked if the other board members would be willing to a one-time appropriation of $4,000 for the paving work. Facility Services Director Woody said he also visited the site. He said it was felt that $4,000 would not be enough, and a $12,000 estimate had been provided. County Manager Smith said initially there was only a driveway issue, but the staff had found out the agency wanted additional work such as paving the parking spaces. He said last year Lifespan made a similar request, and at that time the agency indicated this would be a $10,000 project and the agency had $6,200. He said the county had been asked to fill the gap. Commissioner Robertson asked the staff to bring the matter back up at a later date. 436 — County Assessor: Commissioner Boone said there was a new property specialist position included in the budget, but there were concerns about adding another employee even after the county assessor had tried to justify the request. MOTION by Commissioner Boone to instruct the staff to eliminate the new property specialist position. VOTING: Ayes — 2; Nays — 2 (Johnson/Robertson) MOTION by Chairman Johnson to instruct the staff to bring any changes relating to anyone's job function in the county assessor's office becoming an auditor's position to the board of commissioners for approval. VOTING: Ayes — 4; Nays — 0. ADJOURNMENT: MOTION by Commissioner Griffith to adjourn the meeting at 8:40 PM. (Next meeting: Tuesday, June 4, 2013 at 7 PM, in the Iredell County Government Center, 200 South Center Street, Statesville, NC.) VOTING: Ayes — 4; Nays — 0. Approval: 12 Clerk to the Board