060712mHARNETT COUNTY BOARD OF COMMISSIONERS
Minutes of Budget Special Session
June 7, 2012
The Harnett County Board of Commissioners met in special session to discuss the proposed
budget on Thursday, June 7, 2012, in the Commissioners Meeting Room, County Administration
Building, 102 East Front Street, Lillington, North Carolina.
Members present:
Staff present:
Timothy B. McNeill, Chairman
Beatrice B. Hill, Vice Chairman
Dan B. Andrews, Commissioner
Gary House, Commissioner
Jim Burgin, Commissioner
Scott Sauer, County Manager
Tony Wilder, Deputy County Manager
Dwight Snow, Staff Attorney
Sylvia Blinson, Finance Officer
Margaret Regina Wheeler, Clerk to the Board
Chairman McNeill called the meeting to order at 9:00 am.
Mr. Steve Ward, Director of Public Utilities, gave an overview of the on -going Capital Improvement Plan
which includes recent discussions with the Board including the West Central Transmission Project. Mr.
Ward reminded the Board that approval of the Capital Improvement Plan does not bind the
county yet approval only signifies agreement with the department's vision. Mr. Ward discussed
the capital project budget summary which combines all of the proposed capital projects
discussed in the report. He said it provides a snapshot of anticipated capital needs over the next
five years. Mr. Ward noted the expenditures section shows each projects total budget and the
revenue section shows the expected funding sources for each year.
Mr. Ward explained if the proposed $20,218,100 of new debt is incurred within the next year it
would increase Public Utilities' debt to $70 Million with $270 Million in equity, resulting in a
good debt to equity ratio.
Mr. Ward noted the final page of the plan includes suggested rate increases of $1 on water and
approximately $1.50 on sewer for this coming year. He said the rates were a little over 3%
which is consistent with the 2011 CPI which is how they have done this the last 5 years.
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Commissioner House questioned if the Erwin Infrastructure Improvements include replacement
of any old water lines in the Town of Erwin. He said he receives a lot of complaints from those
citizens. Mr. Ward said it does not and explained that when Harnett County bought the water
system from the Town of Erwin in 2006 they agreed to do some improvements along Hwy 421
between Dunn and Erwin. Mr. Ward said the agreement calls for Public Utilities to build a 16"
waterline from the intersection of Hwy 421 and Hwy 55 to the Black River however the City of
Dunn already has a 24" water line that comes from their Powell Avenue tank to Red Hill Church
Road. Mr. Ward said he is not sure the state will even permit running a 16" line beside of a 24"
line.
Mr. Ward said he was talking to the town about the possibly of using those funds for other areas
of improvements because Harnett County Public Utilities feels like some of the proposed
improvements seem redundant.
Commissioner House questioned if the Erwin Infrastructure Improvements include replacement
of any old water lines in the Town of Erwin. He said he receives a lot of complaints from those
citizens. Mr. Ward said it does not and explained that when Harnett County bought the water
system from the Town of Erwin in 2006 we agreed to do some improvements along Hwy 421
between Dunn and Erwin. Mr. Ward said the agreement calls for Public Utilities to build a 16"
waterline from the intersection of Hwy 421 and Hwy 55 to the Black River however the City of
Dunn already has a 24" water line that comes from their Powell Avenue tank to Red Hill Church
Road. Mr. Ward also said he is not sure the state will even permit running a 16" line beside of a
24" line. He said the agreement also included running a gravity line along 421 starting at Red
Hill Church Road all the way to the Black River and discussed issues with this concept. Mr.
Ward said he was talking to the town about the possibly of using those funds for other areas of
improvements because Harnett County Public Utilities feels like some of the proposed
improvements seem redundant. Mr. Wards said Public Utilities is committed to spending the
same amount of money that is called for in the agreement but there needs to be some serious
thought of how to spend that money in Erwin.
Mr. Ward said he did budget $65,000 under "other improvements" that could possibly be used to
replace some of the water lines in Erwin. Mr. Ward said they had previously taken bids for some
additional improvements around E Street in Erwin.
Joseph Jeffries, Director of the Planning Department, clarified that the Developmental Review
Board (DRB) approves subdivision plans consistent with the ordinance. Commissioner House
questioned if the DRB puts any emphasis on other needed infrastructures such as schools when
considering approval. Mr. Jeffries responded that the DRB mainly looks at it from a technical
stand -point and making sure they are in compliance with the subdivision standards without
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considering other infrastructure needs which would be more of a policy type decision for the
Board. Mr. Jeffries said they do send all subdivisions requests to the Board of Education as an
advisory member to the DRB and he is not aware of any comments received. Mr. Jeffries said
there had been discussions in the past regarding an Adequate Public Facilities Ordinance, which
would include schools, but he understood it seemed to have a lot of legal issues and required a
capital improvement plan in place.
Commissioner House requested clarification regarding the FY 2014/2015 $3.4 Million developer
participation included in the budget. Mr. Ward said the $3.4 Million developer participation is
the other part of existing development out there like Lexington. Mr. Ward said this would be the
thoroughfare to let them serve all 3000 lots because the existing capacity is not there through the
force main. Mr. Ward said that project is a means for that to happen without them doing the
construction themselves and is an estimate of half from the federal government and half from the
developer for that project as required by their ordinance.
Mr. Ward responded there are approximately 39,200 residential customers that would pay the $1
rate increased for water. Commissioner Burgin asked about the possibility of an increase in the
water bulk rate to off -set the increase in the residential rate. Mr. Ward said you have to be
careful not to price yourself out of the market as several customers have other options at which
point Commissioner Burgin requested a comparison of bulk rates in surrounding counties. Mr.
Ward also pointed out when you raise the bulk rate of water sold to the towns in the county the
cost will still be passed on to the citizens. Mr. Ward said the rate had remained at $17.50 for 3
years.
Mr. Sauer reported the Sheriff's Department and Emergency Services had identified revenue and
some cost savings options and were requesting budget adjustments and flexibility. Mr. Sauer
announced the Sheriff is willing to give up 10 patrol cars for some flexibility on a couple of
frozen positions, additional training dollars, travel, material and supplies. Mr. Sauer also noted
the Sheriff's Office is averaging 60 to 62 inmates each day which is higher than expected. Mr.
Sauer reported, in regards to EMS, the county received $1.8 Million from the Medicaid
settlement which was higher than anticipated and budgeted. Mr. Sauer said the Sheriffs Office
and Emergency Services had generated enough additional funds to cover their requested changes
without negatively impacting the upcoming budget. Commissioner Burgin said he had suggested
to the Cumberland County Commissioners that they send their inmates to Harnett County instead
of adding on to their facility.
Mr. Jerry Blanchard presented the solid waste fee comparisons and discussed options for
increasing revenues for the Solid Waste Enterprise Fund. Staff has researched the "Ordinance
for Availability and Use Fees for Solid Waste Disposal Facilities, Harnett County, North
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Harnett County Board of Commissioners
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Carolina" which does not currently allow the County to charge a tipping fee to commercial and
municipal haulers. Staff noted the Ordinance would have to be amended to allow the option of
assessing tipping fees for Commercial Haulers for Residential MSW. The greatest advantage of
this option is that the County could generate revenues up to $1.2 million dollars annually based
on approximately 30,000 tons of residential MSW at $40 /ton. However, MSW tonnage varies
from year to year and there is no way of knowing how much MSW tonnage may actually be
diverted out of the County due to the assessment of tipping fees.
Staff noted another disadvantage of this option for the upcoming fiscal year is the Towns have
already presented their budgets and have negotiated their solid waste contracts which are based
on the premise that Harnett will not charge tipping fees for residential disposal for FY 2013.
Staff provided a table of the potential increase in costs for the Towns if tipping fees were
collected from commercial haulers based on MSW tonnages reported in their FY 2011 NCDENR
Municipal Reports. Mr. Blanchard gave an overview of detailed research and comparisons
related to this option.
Mr. Blanchard reported the advantage of Option 2 which is increasing the availability fees for
households only is the high rate of collection on the tax bill and guaranteed revenue based on the
number of households. The County would generate approximately $960,000 based on
approximately 48,000 households at a $20 per year increase. It is estimated that this increase
will cover the funding gap through FY 2014. He noted the disadvantage is that with this
increase, the household availability fee would be $70 per year.
Mr. Blanchard discussed the advantage of assessing availability fees for commercial properties.
He said the advantage of this option is that the County can collect from commercial properties
that may not be currently paying for tipping fees or availability fees. As previously discussed,
collection of availability fees for these properties is allowed by the Ordinance. Based on data
from the tax office, Mr. Blanchard said it is estimated that there are approximately 2,000
commercial property listings and approximately 1,500 church and non - profit properties.
Currently availability fees are only collected from households. He told commissioners based on
our current availability and recycling fees of $50 per year, this option could generate
approximately $175,000 in revenue annually. Mr. Blanchard said the disadvantage of this option
is finding a method to assess the fee. Tax records do not take in to account multiple businesses
that may be on one property.
In conclusion, staff believes in order to collect the revenues for the next fiscal year; the most
expedient option would be to increase availability fees for households. Mr. Blanchard reported a
multi - faceted approach should be considered to equitably cover the cost for solid waste
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management. He suggested, in the upcoming fiscal year, that the County could develop a
method to impose availability fees for commercial enterprises including individual businesses,
manufacturers, industrial plants, utilities, churches, school, hospitals, rest home facilities, and
non - profit institutions in accordance with the Ordinance. The County can also work to revise the
Ordinance to allow the collection of tipping fees from commercial haulers beginning in FY 2014.
Chairman McNeill mentioned having citizens apply for a business license through the county as
a way to identify businesses. Mr. Jeffries mentioned this would also be a way to pick up video
poker machines in the county. Paula Steward, IT Director, said she believes staff has a good
starting point for identifying almost all businesses between 911, EMS and Public Utilities
databases.
Commissioner Burgin questioned what was being done with the additional $5 recycling charge.
He also requested numbers on recycling tonnage which Mr. Blanchard will provide as well as
polling haulers regarding recycling.
Commissioner Burgin pointed out that a $20 increase would equal a 40% fee increase; saying he
wished staff would do something different suggesting a $10 increase instead. Amanda Bader,
County Engineer, mentioned the possibility of borrowing money from Public Utilities to defer
said citizens have enjoyed subsidized rates for years.
Commissioner Burgin noted the foot notes in past audits referenced landfills and added auditors
put those footnotes in for liability. He said we knew this expense was hanging out there and said
we would take from fund balance. Commissioner Andrews said he thought it would be best to
raise the rate $20 and charge availability fee for every business. Commissioner Burgin asked if
the rate was increased by $20 if it could be only for one year and let the public know this.
Mr. Sauer reported Harnett County has been awarded the Adult Services and Dislocated Worker
Programs contract for FY 2013 in Workforce Development. Mr. Sauer noted the budget for this
program has increased from $300,000 to over $700,000. He noted this additional work would
probably require a 2.5 increase in employees funded with state funds.
Staff responded to initial budget questions from the Board of Commissioners. Staff distributed a
sheet showing the gross payroll which did not include benefits but averaged over 2.7 Million a
month. It was noted November included longevity. Commissioner Burgin also asked for the
total amount of longevity. Also distributed was the Recommended Budget — Salaries by
Department which estimated it would cost approximately $838,821 to give 3.5% COLA to
employees which included full -time and part-time staff.
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Harnett County Board of Commissioners
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Chairman McNeill said we would need to know the total budget impact which would include
taxes, FICA, etc. Commissioner Burgin said another option would be for the county could to put
additional money in HSA account. Chairman McNeill noted he had been approached by
employees who did not take the county insurance saying they feel like they are being penalized
and asked if they could also get the $1000.
Chairman McNeill asked department heads if they had issued they would like to discuss. Mr.
Jeffries mentioned that the rehab at the airport was not funded. Mr. Jeffries said staff has talked
to the Division of Aviation and been told if the County doesn't fund the project they will lose
over $3.5 million.
Sylvia Blinson, Finance Officer, reported that it looks like the county will hold flat at
approximately $18 Million in the general fund. Commissioner Burgin said the county did in one
year what Davenport had said they would do for the general fund in 4 to 5 years. It was the
consensus of Board to add back in the budget the funds needed for the airport rehab.
Mrs. Blinson explained that staff had added 242 Special Districts Fund which had always been in
the budget just arranged different. It was noted that the budget needed to reflect a .01 cent
increase for the Summerville Bunnlevel Fire Department.
Detailed budget discussions continued. It was noted $72,000 was put in a separate account for
legal fees for County Attorney Dwight Snow but legal fees were broken out in other departments
to make consistent across the budget. Finance staff mistakenly included an increase in Mr.
Sauer's salary which he did not reinstate and this was corrected. It was confirmed that funding
had been included in the budget for senior centers at $6000 each. It was noted the CCR &R
coordinator position was reinstated in Cooperative Extension budget this year. Mr. Jeffries told
commissioners staff had received approval that they would be receiving approximately $38,000
in state funds to use toward abandoned homes?
Commissioner Burgin asked to put $30,000 in the budget for S.A.F.E. Chairman McNeill asked
to put $10,000 in the budget for Special Olympics. It was also the consensus of the board to add
$25,000 to the budget for the H.A.L.T. program.
Mr. Blanchard said there is a need to increase fees for transportation up to at least $1.40 and was
directed to work with the County Manager to include this increase in the proposed budget. Vice
Chairman Hill said HARTS drivers feel they are underpaid as part time employees.
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Commissioner House asked about the proposed fees for environmental health and questioned if
the $750 fee for septic tank would stay the same. It was noted Home Health revenues went
down as a result of business declining but John Rouse was not available at this time to answer
questions. Carl Davis, Director of Parks and Recreation, responded they had over - estimated
recreation fees the first year in response to Commissioner House. It was also noted that Public
Utilities helps underwrite the general fund activities by over $1 Million a year. Staff change the
way they were accounting for unemployment benefits in this budget and Commissioner House
asked about bank fees.
Mrs. Blinson discussed the Worker Comp program noting the Local Government Commission
recently wrote the county up regarding the funding of this program. Commissioner Burgin
offered to get the experience mod for Harnett County.
Commissioner House said he would like Triangle South to be funded at $30,000. Commissioner
House questioned if the Anderson Creek library would be kept open and was assured the cost
was included in the Library's budget. Commissioner House also questioned if we bid out
contacts for sludge haulers.
Commissioner Burgin asked about the status of all contracts being put on -line. Staff noted IT
was working with legal staff as to what exactly could be posted on -line.
Commissioner Burgin recommended taking $500,000 away from the Harnett Forward Together
Committee (HFTC) and $500,000 from the General Fund for $1 Million to be used for an
increase for county employees. Commissioners House and Burgin said they understood that
HFTC was getting $600,000 for an upcoming land sale. Commissioner Burgin said he also
understood that Cumberland County only puts $500,000 toward their economic development
which Chairman McNeill responded he was comparing apples to oranges as the City of
Fayetteville also puts money into economic development.
The meeting adjourned at 11:31 am.
cNeill, Chairman •
eeler, Clerk
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