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061214ssmbHARNETT COUNTY BOARD OF COMMISSIONERS Minutes of Reconvened Special Session - Budget June 12, 2014 The Harnett County Board of Commissioners reconvened in special session on Thursday, June 12, 2014, in the Commissioners Meeting Room, County Administration Building, 102 East Front Street, Lillington, North Carolina. Members present: Staff present: Joe Miller, Chairman Gary House, Vice Chairman Jim Burgin, Commissioner Beatrice B. Hill, Commissioner Gordon Springle, Commissioner Tommy Burns, Harnett County Manager Joseph Jeffries, Deputy County Manager Dwight Snow, County Attorney Jennifer Slusser, Staff Attorney Kimberly Honeycutt, Finance Officer Allen Coats, Deputy Finance Officer Margaret Regina Wheeler, Clerk to the Board Commissioner Hill moved that the board reconvene at 8:05 am. Commissioner Springle seconded the motion which passed unanimously. Mrs. Honeycutt distributed Budget Preparation Work Sheets for Fiscal Year 2015 Budget Summary — Fund 110 General Fund Revenue. Mrs. Honeycutt reviewed the information with commissioners and gave an overview of local funding required for some programs. Mr. Jeffries reported that most of the Department of Social Services programs are funded by state and federal dollars with the county's match ranging from 50% to 12%. Commissioner Springle asked if the county is required to provide all of the programs currently be provided by Social Services. Commissioner Burgin asked fellow commissioners if an agreement had already been made regarding a tax increase which each said they had not. Discussions continued between Vice Chairman House and Commissioner Burgin. Staff continued to respond to budget inquiries. The group discussed the Employee Health Clinic. Mrs. Honeycutt explained the proposed budgeting for the clinic which is set up as an Internal Service Fund. Health Director John Rouse confirmed it would be cheaper to not bill the employees insurance for the allowable amount given the county's new self-insured plan. June 12, 2014, Budget Special Session Minutes Harnett County Board of Commissioners Page 1 of 3 Staff estimated the total cost of county employee benefits, including the clinic and retirement, is $17,000 per employee. The group discussed previous projections provided by Davenport & Company, LLC. Mr. Burns noted Davenport is currently working on an insert regarding the proposed bond referendum. Commissioner Burgin said he fears if a tax increase is passed then there will be no incentive for Harnett County Schools to look at other options including year-round schedules and renovations. Staff proposed $1.6 million in additional adjustments to the proposed budget which included redirecting $600,000 from the sale of land, increased wellness grant amount, increased salary expenses, increased transportation fees as well as appropriating an addition $1 million from fund balance which would result in a 3.5 cents property tax increase. Staff reported one penny on the current tax base would equal approximately $774,000. Mr. Burns noted this would reduce the capital outlay allocation to Harnett County School to $3.5 million. Mr. Burns then offered other possible reductions that would reduce the proposed tax increase an additional penny. Commissioners Burgin and Springle questioned the need for a tax increase given the current year's budget projects revenues of $110 Million over expenses of $108 Million. Staff noted current revenues over expenses would roll forward into the county's fund balance. Mrs. Honeycutt responded that some of the increase is needed to continue to build the county's fund balance. During discussions regarding the cost of the new VIPER system, Emergency Management Director Gary Pope responded that the County was no longer eligible to apply for the grant to offset VIPER equipment costs when they took advantage of the $1 million savings to purchase the VIPER equipment at the end of 2013. Commissioner Burgin requested the total number of full-time and part-time county employees as well as the total number of county vehicles. Commissioner Burgin listed tax rates paid by citizens living within each municipality. Commissioners continued debate among themselves. Chairman Miller asked what the 2.5 cents property tax increase this year would means for next year's budget. Chalirnan Miller said they need to raise fees, bring more revenue in and consider a moratorium on new homes being built. Mr. Pope said his office could charge for fire inspections, CPR training and other services currently being offered for free. Mr. Jeffries stressed the need to give departments the ability to do their jobs at a high level as well as the need to support measures and fees that are put in place; to stay the course despite complaints. Mr. Jeffries also told commissioners that the cuts are impacting employee morale. June 12, 2014, Budget Special Session Minutes Harnett County Board of Commissioners Page 2 of 3 Commissioner Burgin discussed the need to incorporate the western Harnett area. He said a .44 cent tax district in western Harnett would solve a lot of problems. He reminded the group that the Sheriff has reported numerous times that a majority of his calls are in Western Harnett. Commissioner Springle agrees that we need to raise fees to offset costs and said we can't keep raising taxes. Commissioner Springle said he does not want any tax increase but understands what Mrs. Honeycutt said about where we need to be. Commissioner Burgin said he is all for reinstating 401K and dental benefits for employees but believes they need to adjust benefits for new hires. Commissioner Burgin said he would not vote to increase property taxes. He also discussed the tax revaluation scheduled for 2017. Vice Chairman House said the county cannot continue digging in to their fund balance. He said we haven't looked after school or employees and can't sustain what we are doing in the County. Vice Chairman House said he did not have any problems with the original budget proposal that included a 5.5 cent property tax increase. Commissioner Hill asked about the $2 million still owed in taxes and why we can't collect it. Commissioner Hill said she supports raising property taxes but said if we are going to increase taxes she wishes the entire board would approve the increase. Chairman Miller said he agrees with Commissioner House on what staff has worked on as well as agreeing with Commissioner Burgin that they need to look at incorporating the western part of the county. Chairman Miller said we need to look at increasing fees and other ways to bring revenue in to be able to keep the county running. Chairman Miller said he has no problem with a 2.5 cent tax increase which the staff said would only be sustaining. Mr. Burns noted that the fee schedule can be adjusted throughout the year but the tax rate must be set by July 1St. Mr. Burns reiterated that a budget is a forecast document. He said he would like to reinstate some benefits for employees. The group discussed employees leaving the county for better pay and benefits and the fact that rural areas are sometimes training grounds for employees. It was the consensus of the majority of the Board that the County Manager prepare and provide a proposed budget including a 2.5 cent property tax increase for public comment. Commissioner Burgin moved to adjourn the meeting at 9:58 am. Commissioner Springle seconded the motion which passed unani 4'4,12, 014, Budget Special Session Minutes Harnett County Board of Commissioners Page 3 of 3