Minutes 05-19-2020 Budget Work SessionEF
Dunn City Council
Special Called Meeting - Budget Work Session
Tuesday, May 19, 2020
1:00 p.m., Dunn Municipal Building
Minutes
PRESENT: Mayor William P. Elmore Jr., Mayor Pro Tern Chuck Turnage, Council Members J. Wesley
Sills, April Gaulden, Frank McLean, Billy N. Tart, and Dr. David L. Bradham. Public Notice, relating to the
Special Meeting Conditions, is incorporated into these minutes as Attachment #1.
Also present: City Manager Steven Neuschafer, Assistant City Manager Mathew Boone, Finance Director Jim
Roberts, Executive Assistant Connie Jernigan, and City Clerk Tammy Williams. Participating via Web Ex: Public
Utilities Director Heather Adams, Public Works Director Vince Washington, Planning Director George Adler,
Chief Building Inspector Steven King, Chief of Police Chuck West, Parks and Recreation Director Brian McNeill,
Human Resources Director Anne Thompson, Librarian Mike Williams, and by telephone: City Attorney Tilghman
Pope. Also onWebEx: Eliot Duke with The Daily Record.
CALL TO ORDER AND INVOCATION
Mayor Elmore opened the meeting at 1:00 p.m. and Council Member Tart gave the invocation. Afterwards,
Council Member Turnage led in the Pledge of Allegiance.
AGENDA ADJUSTMENT AND APPROVAL
Motion by Council Member Turnage and second by Council Member Bradham to adopt the May 19, 2020
meeting agenda as presented. Motion unanimously approved.
ITEMS FOR DISCUSSION AND/OR DECISION
Memorandum of Understanding (MOU) between the City and NC Department of Transportation
(NCDOT) regarding 195 Widening Project
City Manager Neuschafer presented MOU with NCDOT to include the construction of the private sewer line
for JPD Properties, LLC CPJ's Truck Bodies) as part of the City's construction contract with Temple Grading
and Construction. The MOU also relieves the City of any responsibility related to the ownership,
maintenance, and operation of the private sewer extension and the City will be reimbursed at 100% by
NCDOT for all costs associated with the project
Motion by Council Member Bradham and second by Council Member Tart to authorize City Manager
Neuschafer to execute the MOU between the City of Dunn and NCDOT for the Public and Private sewer
extensions to serve JPF Properties, LLC. Motion unanimously approved. A copy of the MOU is incorporated
into these minutes as Attachment #2.
FY 2020-2021 Budget Work Session
City Manager Neuschafer reviewed his budget message to Council and began his discussion talking about the
unknown impact of the Covid-19 pandemic. Based upon projections published by the NC League of
Municipalities, the overall budget is reduced by 2.8% in anticipation of decreased revenues. The City staff has
been instructed to limit expenditures to those prioritized by management. Restricted spending such as street
resurfacing, drainage and utility projects will move forward. He also reported on the proposed fee increases
to include a 2% on garbage and recycling due to contractual increase from Republic Services; water rate
increase of 3.3% to replenish fund balance and cover repair costs; 6% on sewer rates needed to pay for debt
services on sewer projects; and 75 cents per month increase on storm water fees to cover street sweeper
debt service. The budget provides for infrastructure improvements and will utilize the majority of funds
received from the Powell bill and vehicle license tag fees. Concerns were expressed by Council about trash
pickup and the many complaints received from residents.
Plans are to continue to progress on three building construction projects: renovations for the Police
Department and computer server location at City Hall; Public Works and Utilities facility; and the office
consolidation for the Parks and Recreation Department. He also shared that the budget would fund three
new employees for the Public Works Department to handle asphalt resurfacing and repair operations and a
new administrative position in the Planning and Inspections Department Three permanent staff reductions
have been made in Recreation, Library, and Public Works. The budget does not propose a COLA increase for
employees but includes up to 2% for merit increases in January. The budget includes a balanced budget for
the General Fund of $11,275,000.
He reviewed the Water and Sewer Fund revenues and expenditures to include a balanced budget of
$6,696,000. He shared how expensive repairs are related to water and sewer projects. He also went through
the proposed rate increases for water, sewer, and storm water fees. He made them aware that the City of
Dunn rates are in line with other communities nearby and/or of similar population. He told Council that the
budget is concentrated on reducing expenditures for the first six months and also includes funds for the Ashe
Avenue Dog Park and Garden. He then reviewed the Capital Items list that is not a part of the budget because
these items are purchased with borrowed money.
He reviewed the real cost on rate increases with comparisons for residential average users using 2940
gallons having a monthly increase of $3.75. The actual bill comparisons show that the larger user will have
the highest percentage increase due to the tier system used by the City. Council Members Turnage and
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Bradham expressed the importance of publicizing this information to the residents so that they can
understand the increases and why these increases are needed.
Mayor Elmore recessed the meeting at 2:07 p.m
The meeting was reconvened at 2:18 p.m.
City Manager Neuschafer reviewed the General Fund beginning with the Revenues. He shared that the City
practiced conservative budgeting in last year's budget but revenues have been decreased more this year due
to the unknown impact of Covid-19 including reducing Ad -Valorem taxes to 96.7%. He reviewed the Powell
Bill revenues and how they are calculated by the State with the City receiving $19.11 per person and
$1,580.13 per mile. He shared that Powell Bill funding has steadily decreased over the past 10 years. In sales
tax distribution, the staff is projecting a reduction in collections. It is estimated that the City might have a
20% loss in April - June 2020. The City is using the most conservative models based on expert projections.
Sale of Cemetery Lots budget has been increased as staff is proposing increasing price per lot to $1,000 and
doing away with the discount for purchasing multiple plots. These prices are in line with other communities
in our area. The Membership Fees for the Recreation Center has been taken out of the budget because staff
does not plan on reopening the center due to the cost of maintaining equipment and providing staff. He also
stated that there is a small amount residents participating at the center and it keeps the City from the
competing with local businesses.
Council Member Sills inquired on ways the City might help businesses in an effort to grow Dunn. City
Manager Neuschafer reviewed the incentives programs, such as rebates and grants available to small and
larger businesses. He told Council incentives are generally based on the number of jobs created.
City Manager Neuschafer reviewed the General Fund expenditures. The budget includes an increase for the
Downtown Service District to employ a full-time director as part of the Main Street Program. Travel and
Training and Departmental Supplies have been reduced in each department. He stated that a lot of training
opportunities are not happening right now anyway due to Covid. He also explained how the Water and Sewer
Fund shares in the expenses for administration and facility cost at 35% in some expenditure accounts.
Human Resources expenditures have been moved out of Administration - Miscellaneous and moved into
Wellness under Non -Departmental. He told Council that the proposal for the Contract - Landscape Services
has come in above projected budget with only one bid received. Staff is currently looking at alternatives for
handling the landscaping throughout the City through rebid or reducing landscape areas. Council Member
Bradham stated that when looking at changes, it is important to weigh cost versus quality with the City's
image being so important as we move forward.
Mayor Elmore asked about Insurance and when it was up for bid. City Manager Neuschafer stated that he did
not know of a time when insurance has been put up for bid. Miscellaneous is where we can get some of the
money for special projects, such as the dog park, as long as revenues come in as expected. In the Police
Department budget, Mayor Pro Tem Turnage recommended that everything be done to maintain
accreditation through CALEA. City Manager Neuschafer added that the City has realized some fuel cost
savings due to Covid and buying in bulk. Council Member Sills expressed concerns on the cell phone expense.
Neuschafer said that about half of the expense is MiFi for Police Vehicles. Assistant City Manager Boone
added that using the cell phone as a hot spot does not work as efficiently as the MiFi. He added that he had
recently worked with Verizon going through the bill line by line for officers and ended up saving about $3,500
a year.
Under planning and Inspections, demolitions has been decreased to try and handle more in-house. Under
Street/Cemetery Department, he pointed out the large expenditure the City is paying for street lights
throughout the City. He reminded Council that the City has to pay whether they are working or not so if
street lights are out, we want to report so they can be repaired as quickly as possible. He also added that no
money has been budgeted for replacing old sidewalk. Sanitation line item shows the 2% increase in the solid
waste contract He reviewed the Powell Bill/Street Resurfacing page and where those funds come from
within the budget
He reviewed and explained Debt Service pages and compared it to the Debt Schedule distributed by Finance
Director Roberts, which shows debt service for a 5-year period. Under Contributions to Non -Profits, the only
item listed is $195,000 for Dunn PAL. Dunn Recreation has been reduced significantly including the
reduction of two employees and the fitness equipment. The largest reduction in the Library was in
administration going from 4 to 3 employees.
Council Member Sills recommended the City look into a Beautification and IT committee, especially if there
are no costs involved. He also expressed some reservations concerning the budget. Council Member
Bradham expressed appreciation to City Manager Neuschafer and his staff for putting this budget together
during such tough times. Mayor Elmore again thanked the staff and reminded Council that an additional
meeting can be scheduled if enough concerns are expressed by Council Members.
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With no further business to discuss, motion by Council Member Sills and second by Council Member McLean
to adjourn the meeting at 4:22 p.m. Motion unanimously approved.
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William P. Elmore Jr.
Mayor
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Tam// y Williams
City Clerk