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HomeMy WebLinkAboutMay_8_2014_Budget_Session_MinutesMay 8, 2014 IREDELL COUNTY BOARD OF COMMISSIONERS BUDGET SESSION MINUTES Mav 8, 2014 The Iredell County Board of Commissioners met on Thursday, May 8, 2014, at 5:30 PM, in the Iredell County Government Center (South Wing Conference Room), 200 South Center Street, Statesville, NC. Board Members Present Chairman Steve Johnson Vice Chairman Marvin Norman Renee Griffith Ken Robertson Staff present County Manager Ron Smith, Deputy County Manager Beth Dirks, Finance Director Susan Robertson, Assistant Finance Director Deb Alford, Tax Collector Bill Furches, Tax Assessor Melia Miller, Colon Barnes of the IT Department, and Clerk to the Board Retha Gaither. CALL TO ORDER by Chairman Steve Johnson. ADJUSTMENT: Chairman Steve Johnson asked to add a Closed Session concerning Economic Development. BUDGET: County Manager Ron Smith said the session would began with discussion of budget schedules, evaluations, and projections then move into General Governmental Departments. Chairman Johnson asked the Board to consider making changes/amendments/corrections to the budget during the review in the form of motions. Then at the end of the review sessions, the County Manager and Finance Director will present all updates at once. All were in agreement. Smith pointed out a few things to be aware of — health insurance has increased in every department, will take a peek at projections for FY 16 toward the end of the sessions, and there will be a review of each "take away" from the winter retreat. Commissioner Renee Griffith asked if there would be a discussion on filling the vacancy of David Boone. Chairman Johnson said no. General Fund - Finance Director Susan Robertson began the review with the fund balance as of June 30, 2014, will be $39,093,018.00 which is 23.37% of the recommended budget. Commissioner Ken Robertson stated the S&P Report was impressed with the county's fund balance percentage. He asked if the higher percentage was ever made into policy. May S. 2014 Chairman Johnson said it was not a policy but understands S&P would like to see it formalized into a policy. However, he is hesitant to do that with fear of the economy dropping as it did in 2008 through 2011. He said the report shows an Aa2 and Aa3 Bond rating which changed the outlook from stable to positive and if trends continue there is a possibility of an upgrade in the bond rating. He feels that if the County continues to follow the present course, he doesn't think there is a downside to not formalizing a policy. However, if there is an issuance of some type of debt and the fund balance is still greater than 18% it will be viewed more positive if bonds need to be issued. Commissioner Robertson asked if it would make a difference and how would the County be impacted if upgraded a small amount. Finance Director Robertson said she could not say what it would mean as far as interest rates. She said investors want the highest grade possible. If an investor can get a higher yield from an Aal as opposed to an Aa2, they will choose the Aal. She added that when speaking of ratings, it is ratings to the County and it is actually the bond that is rated. Bonds could have different ratings which is why the County has an Aa2 and an Aa3. The GO secured by the faith and credit of the County have the 2. The COPS which is secured by the asset that was financed will be a notch lower than the GO bonds. If the budget is approved as is and if next year is exactly as proposed the fund balance will increase again to over 24%. Finance Director Robertson said this budget recommends a total of 877 employees funded by the General Fund. There are 5 new positions proposed - one in the Tax Assessor's Office with an estimated cost of $53,000 and trained in all disciplines of Tax Administration. Another position is requested in the Jail - a Bailiff for the Mooresville Office at an estimated cost of $51,000 in salary and benefits. In Animal Services a Veterinarian is recommended which will eliminate contracting out for those services. There is a request to add two income maintenance case workers at Social Services. One position in ICATS which is a special revenue fund with no tax dollars and one part-time driver in operations. Solid Waste has requested two positions. Commissioner Robertson asked about the new driver in ICATS with a recent report of funding cuts. Deputy County Manager Beth Dirks reported that it is not really a new position. ICATS will be eliminating three part-time positions with this one full-time position. Capital Outlay - Robertson said General Fund requests total $2.7 million with $1.8 million in recommended funding. The Board of Elections' replacement of voting machines will be approximately $330,000 along with precinct equipment at $51,000, but it is not necessary to be done in FY 14-15 so it is recommended to proceed with those purchases over a three-year cycle. The ambulance to be replaced in EMS has over 225,000 miles and cannot be remounted. The Courts have requested four new metal detectors at a cost of $136,000. Robertson explained the General Fund Expenditures by Service Type. The report is condensed and expenditures are shown by function. The recommendation for FYI is a 1.93% increase. The report of General Fund Departments by Revenue Source shows the FY 15 9 May 8, 2014 Recommended Budget minus fees that were earned by particular departments and minus restricted revenues, such as sales tax restricted by statutes. The bottom line shows a 1.93% increase from FY 14. Also, in comparing FY 14 to FY 15, education funding and funding to all other programs has remained basically the same. Robertson explained the estimated property valuation. FY 15 budget is based on property valuation of $20,946,200,000 which is a .76% decrease from the current budget. Most of the decrease is in personal property. Commissioner Robertson noticed a large decrease in motor vehicle tax. Tax Assessor Melia Miller said last year's amount included four extra months because of the switch over to paying taxes with tags. This year's total is only twelve months. She said there is not a lot of growth in personal property plus taking into account depreciation. Also, there have been a few large items leaving the county, i.e. aircraft. She said there have been changes in the statutes that govern exemptions and exclusions. Regardless of ownership, charter school property is exempt which means a decrease of $10-$11 million. On a positive note, construction has increased in south Iredell. Chairman Johnson stated personal property from commercial or industrial will probably remain flat for the next several years. People are not taking risk with the current economic climate because there is no incentive to take risk. He said you can't expect people to invest here with the highest corporate task rate in the world. Finance Director Robertson said the schedule of tax rates remains the same except for Mt. Mourne Volunteer Fire Department. They asked to increase their rate from 4¢ to 4.5¢. Chairman Johnson said he met with Mt. Mourne. He said they have some capital needs and feels this increase is legitimate. Robertson said ad valorem tax is 61% of the total revenues, sales tax is 18%, fees and reimbursements are 9%, grants 11 % and everything else is I% of the total revenue. The final installment of sales tax for FY 13 exceeded what was budgeted. Robertson feels the growth is certainly better than what has been seen in the prior years. Chairman Johnson stated he feels they still remain somewhat volatile. Robertson said that is correct and with a three-month delay in collections it is difficult projecting for next year. Robertson said the Register of Deeds' revenues are up. Court Facility fees continue to decline with a 22% decrease since FYI 1. She stated it doesn't matter how many times a case is continued, the county only receives one fee. She pointed out a reimbursement under the Sheriff's Office for School Resource Officers. The school system receives a grant and reimburses the County for ten months of salaries and benefits for resource officers in the high schools. The 3 May 8, 2014 Sheriff s Office does provide officers for the middle schools but it is not counted in current expense funding but is support of the schools that is not reimbursed. Chairman Johnson asked to explain that procedure. Robertson said the school system does not receive any grants for middle schools. She said Mooresville provides officers for Mooresville middle and high school. Statesville provides the officer for Statesville High, and Troutman provides for South High and Troutman Middle School. Robertson said Animal Services is expecting an increase in adoptions. Chairman Johnson asked to clarify the crime lab numbers. Robertson said grants are not included in the budget. The Crime Lab is expecting about $101,000 actual collection in fees. The budget is $186,500 for next year and does not cover cost of operations. However, there are sufficient funds in fund balance reserve for law enforcement or siege funds to cover the difference. Chairman Johnson asked for the actual number of the difference. Robertson said it is $151,600 for next year. The last six weeks shows an increase in collection of fees. Administration - Smith stated the Commissioners' budget has decreased because of changes in salary and travel due to the retirement and hiring of the Clerk to the Board. Smith said the Administration budget doesn't have much change except in salaries, travel, and health insurance. The increase in health insurance is indicative of all departments. Human Resources - Smith stated Human Resources requested a safety officer, but has been removed. The safety program has been transferred to the Deputy County Manager and the Executive Assistant for the County Manager. The HR Department is showing an increase due to salaries, training and development, and to fund the leadership training. Smith said HR has been very good with keeping unemployment claims down by dealing directly with Department heads. Commissioner Ken Robertson suggested making safety compliance a responsibility at the department level. Elections - Smith said the biggest increase in the Elections' budget is the replacement of the voting equipment. However, it is budgeted over a three-year period at $110,000 each year. Finance - Finance Director Susan Robertson said the Finance Department's budget has an increase in training and development to provide additional training for staff and to host a group training for a report writer function in the financial software. The present program being used is no longer available, therefore, training is necessary for the new program. May 8, 2014 Smith pointed out the future need for an additional staff member in the Finance Department. He said this position is needed and will probably be added in the FYI budget. Commissioner Robertson asked if it would be another accountant or financial analyst. Finance Director Robertson said she was describing it as a banking specialist or a treasury manager/analyst type position. Someone who will dig into the numbers and look for inefficiencies. Commissioner Robertson asked about the state employee retirement percentage. Finance Director Robertson said there is no increase in local government employees' retirement system. However, there is an increase in the law enforcement officers' retirement. Tax Administration and Mapping - Smith said most of the increases seen in the Tax Assessor's office is due to the revaluation. In addition they are requesting a floater position. This person would be crossed trained to float between the Assessor's and the Tax Collector's office. Tax Administrator Bill Furches stated this employee would be extensively trained throughout the department including mapping. He said, presently, 1/3 of the staff is at or close to retirement. This new person would be someone that could be promoted to move into another position. This position will help to alleviate issues with customer service during the busiest times, plus this position would pay for itself. Tax Assessor Melia Miller said this position would also be support for the business/personal property and the audits. She added that the reappraisal is being done in-house. The $188,000 is for notices, postage, Pictometry, and some over -time. Smith said Iredell County is 15" highest in population but I1`" or 12`" in total property value. There are 93,500 parcels in Iredell County. Smith said the Tax Collector and Mapping/GIS have lowered their budgets even with the increases in fixed costs. Commissioner Robertson complimented the accessibility of the on-line mapping services. Information Technology Services - Smith said Information Technology Services Department has experienced several changes. Several lateral transfers have taken place over the last few years. An IT employee was moved from the Register of Deeds. Two technology employees are working at the Health Department but are now under the ITS Department. Another tech employee working at the Library is presently being placed under the ITS Department. These employees are consolidated under the ITS umbrella to maintain consistency with networking, specifications, purchasing, etc. They have asked for an additional position, but Smith said he is holding that for another year. The budget includes $50,000 under contracted services to restructure the web site by an outside vendor which will provide some additional benefits. May 8, 2014 Commissioner Robertson stated that if the decision to hold that position becomes necessary to fill, then the Board could revisit that request during the year. Smith said if the web site is contracted out, it would allow the present web master to adjust his schedule to work on other needs. He said one big ticket item on the horizon is the transfer of the phone system from Centrex to Voice -Over IP. Revaluation - Tax Assessor Melia Miller updated the Board on the revaluation. She said they are well underway of the 2015 reappraisal. Pictometry is being utilized with many of the reviews. A schedule of the next steps in the process has been given to the County Manager. Plans are to mail the notices out on February 15, 2015. Prior to that time the Board will be required to takes several actions. One will be to approve the schedule of values and a public hearing. Miller doesn't expect or anticipate a large increase. Commissioner Robertson commented on a recent trend he has noticed. Some of the more expensive homes, $700,000-$800,000, are selling for less than the tax value. Miller said there's no certainty of an increase, but maybe I%, but it is too early to tell. The trend, from evaluation reports of the past several years, show no large spikes. Building permits have a slight increase. Qualified sales are still not stable. She said they are progressing carefully to avoid any and all issues similar to those in Mecklenburg County. Once everything is complete all property in Iredell County will have been reviewed within the last five years. Register of Deeds - Smith said the total budget has decreased but there are a couple of reclassifications. Commissioner Griffith asked if the Register of Deeds budget cuts are sustainable, if a new person was elected would they have to dramatically increase the budget for items such as training. Smith said that was a difficult question. Some of the cuts are due to on-line accessibility, but other things would be more of a philosophical decision for the person elected. Commissioner Griffith asked about maintenance on equipment. Smith said he has eliminated some maintenance contracts but to date there have not been any problems. Vehicle Services - Smith said the largest change in this department is the administrative assistant. Last year this employee was added at 80% time and the request now is make this position full time. Smith feels this is a legitimate request. Legal - Smith said this year has been very heavy with legal fees for various reasons and he is proposing to increase the budget to $120,000. Economic Development - Finance Director Susan Robertson said the economic incentives approved for different businesses and industry is based on when certain thresholds are met with 6 Mav S. 2014 the investments. The incentive is only paid once the threshold is actually met and it is paid in the next fiscal year. Robertson said there are several large approved requests that have not been paid. Therefore, the money has been budgeted and carried forward each year, but the companies have still not met the threshold. She said instead of budgeted the potential true cost, she is carrying forward $800,000 to next year to support the incentives. In addition for FY 15 $100,000 has been budgeted for project development to assist with up -fits and/or utility extensions for new businesses or industry, should such a request arise. Robertson said the only thing Statesville Airport requested was for the County to share in the Vision One Hundred Entitlement Grant $8,335 which has been done for several years. The County still owes the City of Statesville for 50% of the airport debt issued several years ago. Also to reimburse half of the cost of the sewer line that was installed, which will be paid out in December of 2015. Chairman Johnson said the City has expanded the airport lay -out plan to take in more area, especially to the north. He said this area could have sewer for a nominal expense, which would potentially make it a ready-made industrial park. A request may come through to assist with the cost of the airport lay -out plan, but Johnson said he has been assured the money would be reimbursed. Chairman Johnson expressed his fear that when residential development returns it will encroach upon commercial corridors and areas that would naturally lend itself to industrial development. If this happens it will be difficult to rezone areas for commercial development which will reduce the commercial tax base. Johnson said he would like to see the County financially participate and help municipalities pay for the size of line that would service a commercial corridor. The ground work is already in the 2030 Horizon Plan for protecting such corridors. Smith asked if the $100,000 is a good number to start. Chairman Johnson felt it is a good number to have in the budget at the present time. He and Commissioner Robertson recently met with representatives from Mooresville to discuss the connector road between Mazeppa Road and Cornelius which the bond will cover. However, long term, Johnson feels it is necessary to look at an interchange at Cornelius Road. Along Cornelius Road there will be freight traffic from Mazeppa out to 1-77. He said a TIF (tax incremental financing) might work in a clearly defined geographical area where economic impact could be measured at the interchange and the accurate assessment of the properties. If a TIF would help propel the process of an interchange at Cornelius Road, it may be worthwhile to consider. Commissioner Robertson said the time table is early 2020 for that funding. Development Departments Building Standards Division - Smith pointed out, in FY10, the revenues in Building Standards were $1.5 million, but projecting $2.7 million in FYI 5. Development Director Lynn Niblock has requested a new position, but Smith doesn't feel the numbers support it. Smith recommends a review of the needs and that request in mid -year. May 8, 2014 Commissioner Robertson stated that department was reduced when work load decreased and he would not have a problem reversing that decision as the work load improves. He expressed concern about the amount of time involved for certification. Smith said the Building Standards budget was fairly conservative with no major issues. They will need to replace one truck but will go with a transit van. Every four years the codes manuals must be replaced which is scheduled for FY15. Niblock is proposing a nominal fee schedule change. The department is using Munis permitting and trying to make it as efficient as possible. Therefore, Niblock is using the International Code Council's recommended fee schedule. Planning Division - Smith said their revenues are up some in grading permits and erosion control permitting. Planning Director Matthew Todd has presented a lower budget which is due to Todd's promotion as Director and not filling the position Todd left. Central Permitting - Smith said salaries have increased as a result of one additional position added in late 2013. A large increase of $30,000 under contracted services for Munis upgrades for the entire building. The upgrades and annual support will benefit all departments but felt it was best to place the lump sum in one department. Smith said they are about to launch a process improvement program. Basically it will be an in-depth review of the development process. This process will be completed in-house. Cooperative Extension - Smith said they remain without a Horticulture agent and may not have one for a while according to the State. Cooperative Extension Agent Nancy Keith requested the position to be funding entirely by the County, but Smith isn't recommending that. Finance Director Susan Robertson said the State agreed to fund 50% of a part-time person. Retiree Don Breedlove will work 20 hours per week with the State paying 10 hours plus benefits and the County will pay 10 hours plus benefits. The State will cover all travel costs as well. Presently Cooperative Extension does not have a Horticulture Agent, 4-H Agent or an Administrative Assistant. Kiwanis Club - Chairman Johnson asked if the budget included matching funds for the Kiwanis Club for the fairgrounds. Finance Director Robertson said yes, the County budgets $20,000 and the club reimburses $10,000. This concluded the budget work session for the evening. The Board moved into Closed Session at 7:50 p.m. 8 May x, 2014 VOTING: Ayes -4; Nays -0. ADJOURMENT: MOTION by Chairman Steve Johnson to adjourn the meeting at 8:00 p.m. (Next Meeting: Tuesday, May 20, 2014 at 4:00 p.m. in the Iredell County Government Center, 200 South Center Street, Statesville, NC) VOTING: Ayes -4; Nays -0. Approval: Clerk to the Board