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05202014M MINUTES CITY OF DUNN DUNN, NORTH CAROLINA The City Council of the City of Dunn held a Special Call Meeting/Budget Work Session on Tuesday, May 20, 2014, at 8:30 a.m. in the Dunn Municipal Building. Present was Mayor Oscar N. Harris, Mayor Pro Tem Buddy Maness, Council Members Frank McLean, Billy Tart and Billy Barfield. Also present was City Manager Ronnie Autry, Assistant City Manager Steven Neuschafer, Chief Building Inspector Steven King, Recreation Director Perry Hudson, Police Chief Jimmy Pope, Public Works Director Billy Addison, Public Utilities Director Dean Gaster, Human Resources Director Anne Thompson, Librarian Mike Williams, City Attorney P. Tilghman Pope, and City Clerk Debra West. Absent: Council Members Turnage and Robinson. INVOCATION Mayor Harris opened the meeting at 8:30 am and gave the invocation. Afterwards the Pledge of Allegiance was repeated. AGENDA ADJUSTMENT AND APPROVAL Motion by Mayor Pro Tern Maness and seconded by Council Member Tart to adopt the May 20, 2014 meeting agenda with changes, if any, as listed below. Items Added to the Agenda: • none Agenda Items Removed: • none Motion unanimously approved. ITEMS FOR DISCUSSION AND /OR DECISION Open Issues from Prior Work Session Manager Autry reported that one open issue was the health insurance. The current BCBS plan was projected to increase by 17 %. The broker recommended United Health Care (UHC) with an increase of 7.73% reduced to 6.43% with an implemented wellness program administered by UHC. The savings in funds ($30,000) from his original 10% insurance increase projection will be used toward paying interest payments for the Harnett Training Campus (HTC) project. Harnett Training School Apartments Project will accrue interest during construction. $30,000 has been placed in debt service for HTC. The only monies available in the Contingency Fund is the proposed 2.25% COLA. Town of Angier is proposing 2.5 %, Erwin is proposing 1 %, Harnett County, Coats and Lillington are not proposing a COLA due to a major increase in their health insurance. It was discussed that provided the City receives the revenues projected and based upon budget projections and results, the 2.25% COLA will be passed on to the employees mid -year retroactive to July 1, 2014 and subject to Council approval. Manager Autry reported that he met with the County Manager with regard to the dispatch/communications transfer. The City has fully budgeted telecommunications services until January 1, 2015. If the County does not accept the transfer of telecommunications, then the City would have to amend the budget to fund the remainder of the year. Manager Autry reported that monthly sales tax distribution has been down since the latter part of last year. Manager Autry reported that Fire Inspection fees are in line with the County fees. These fees will never be self - supporting. Since fire inspection invoices have been re- submitted, $19,000 has been received. He would estimate that the City collects 40% of the City's annual $55,000 paid to Dunn Emergency Services to perform this inspection. It was discussed if fire inspection fees should be adjusted. In comparing the bulk water user rates, the proposed increase from $1.90 /per 1,000 gallons to $2.00 /per 1,000 gallons is compared to $2.14 /per 1,000 gallons charged by surrounding competitors. He recommends leaving the rate as proposed to avoid losing bulk customers to other competitors. Letters have been sent to surrounding municipalities and he did receive a few calls concerned with the $2.00 charge. He recommends the small increase to remain with residential users to maintain the bulk user at a rate to retain those clients. Discussion was held that bulk rates charged by the County vary depending upon if a customer has bought into their system. Discussion was held that the Council needs to be mindful, reasonable and competitive with the bulk rate charged. It was discussed if the City should charge Sampson County a higher rate and not the same bulk rate charged to other users. Manager Autry explained that the current fee schedule is set such that if a bulk user does not guarantee a minimum usage in their contract, then they are charged at a higher rate. Discussion was held that if bulk rates are increased, then those users may explore other avenues for water supply. Discussion was held about the possibility of setting bulk rates 50 on a graduated scale, providing a better rate for more usage, to evaluate the current bulk water contracts and bring a recommendation back to the Council. FY 2014 -2015 General Fund Budget Recap Total Revenues - $8,522,400.00 Total Expenses - $8,522,400.00 Revenues: General • Property tax revenues are projected to increase by 1% due to expanded property tax valuations. • Sales tax remains flat. • All PAL grants eliminated - 21" Century Grant ends June 30t°. • Dr. P.K. Vyas Recreation Center contributions /pledges have been collected — The five (5) year period for collection has ended. Expenditures: General • Reserve for contingency — 2.25% COLA = $93,718 • Employee Brian Lockamy moved from Public Works water /sewer division to the Inspection Department (allocation of 65% General Fund and 35% Water /Sewer) • Temporary Position added to Inspection Department • Health insurance cost increase of 6.43% • Tipping fees — Increase cost of $20,000 (Hamett County will not be issuing this credit). • Downtown Revitalization - $181,500 ($55,000 paid by DDDC /Tourism). • PAL (501 (c) (3) Contribution) - $125,000 — This is the same contribution amount made to PAL in previous years. Discussion that the City also funds PAL Director Rowland's salary and vehicle. • Capital items have been addressed and a list of items proposed for funding is as follows: Police cars $160,000 ($28,000 USDA Grant - $132,000 USDA Loan) Inspection Track $ 24,600 Powell Bill Fund Balance - $32,500 (Gates/Signals at W. Pearsall Street crossing) — discussion was held that if Powell Bill Funds change the formula to lane miles, then this will affect the allocation received each year. Water /Sewer Fund Budget Recap • Total Revenues - $5,022,500 • Total Expenditures - $5,022,500 • Water and sewer rate increase proposed to cover loss revenues from Sampson County (this equates to $242,000 in loss revenues projected at a 50% reduction — this is due to Sampson County going to a well system). Discussion was held to re- evaluate bulk rates to reduce the residential rates. Manager Autry explained that the most cost is in sewer (sewer does not pay for itself) and the City is deficit in what is charged for sewer. Bulk rate monies help subsidize wastewater and if the City loses bulk customers, they will still have excessive expenses in wastewater. Major municipalities all over the state are drastically increasing their sewer rates beyond the water cost. It was discussed that the Manager and Public Utilities Director Gaster gather data for the Council, comparing Dunn's water and sewer rates to other municipalities of like size to consider for future budget years. • Water rates per 1,000 gallons increased from $3.70 to $3.89. • Sewer rates increased to $9.08 base rate and from $3.46 to $3.63 per 1,000 gallons • Reserve for Contingency— (2.25% COLA - $27,970 included) - $50,673 • Health insurance cost increase of 6.43% Expenditures: Water • Capital items have been addressed and a list of items proposed for funding is as follows: 30- 810 -7403 - Water Department $50,000 AMR Startup in Grove Park & Lakeshore Subdivisions 15 000 Utilities locator $65,000 30- 811 -7400 - Water Plant: $35,000 Clearwell rehab & painting at Water Plant 30- 821 -7400 - Wastewater Plant $115,000 Clarifier Rebuild 10,000 8 inch super -T Recirculation Pump 3,500 Sludge Recirculation Pump Building 10 000 RAS /WAS Flow Meters 51 $138,500 $238,50 Debt Service The Council was presented a schedule of debt service through FY 2021 -2022. Tyler Park Phase 2 Another application will be submitted to the Local Government Commission (LGC) to combine Phase I and Phase 2 per the recommendation of LGC with First Citizens Bank since they already have the lien on Phase I. This will allow for one (1) debt payment for Phase I and 2. It is projected to close on this recombined loan in July, 2014 and to begin construction of Phase 2 during the first week of August, 2014. Discussion was held that the City has not received a Naming Rights Pledge to pay for the proposed two tennis courts. Manager Autry advised that to add a third court would cost an additional $64,000 plus $5000410,000 to move existing power lines and poles. Discussion was held if the property beside Kim's could be sold to fund the extra tennis court at Tyler Park. Discussion was held that the parking lot around Kim's Barbecue is owned by the City. This is where the City storm drain lies. Approximately fifty (50') of road frontage on Broad Street belongs to the City. It was discussed that the Council would like to receive information as it relates to the footage owned by the City. Republic Waste Collection Republic Waste Services is proposing to go to a four (4) day a week pick -up which will have little effect on current pick up days. Republic Waste will be responsible for notifying customers of the change in pick up schedule. Discussion was held for the Manager to inquire if Republic Waste can pick up recyclables on the same day as regular trash is picked up. Proposed Fee Schedule for FY 14 -15 The proposed fee schedule was presented to the Council with the same changes as proposed at the April 22, 2014 Budget Work Session. With no further business to discuss, a motion was made by Mayor Pro Tern Maness and seconded by Council Member Barfield to adjourn the meeting at 10:12 am. Motion unanimously approved. Attest: CITY OF40 ORPOT ,,20'•. SEAL �Ty CAROV,NP +ii rn �% N% Debra G. West City Clerk 51 O car N. Harris Mayor