052918wsmHARNETT COUNTY BOARD OF COMMISSIONERS
Minutes of Work Session
May 29, 2018
The Harnett County Board of Commissioners met in work session on Tuesday, May 29, 2018, in
the Commissioners Meeting Room, County Administration Building, 420 McKinney Parkway,
Lillington, North Carolina.
Members present:
Staff present:
Gordon Springle, Chairman
Howard Penny, Vice Chairman
Barbara McKoy, Commissioner
Joe Miller, Commissioner
Abe Elmore, Commissioner
Paula Stewart, County Manager
Dwight Snow, County Attorney
Kimberly Honeycutt, Finance Officer
Margaret Regina Wheeler, Clerk
Chairman Springle called the meeting to order at 9:00 am and led the Pledge of Allegiance and
invocation.
Mr. Stewart presented the following Budget Message and proposed 2018/2019 budget to the
Board:
The proposed Harnett County budget for 2018-2019 is hereby submitted for your review and
consideration. A few highlights of the proposed budget include:
• The ad valorem tax rate will remain the same at 75 cents per $100 property valuation.
• No appropriation of fund balance is proposed. The fund balance for FY 2019 should remain
above the 15% minimum set forth in the Harnett County Fiscal Policy Guidelines.
• The overall budget decreased by around 10% from FY 2018, primarily due to lower than
expected sales tax revenues and lower than expected intergovernmental revenues.
• The proposed budget seeks to address a number of the priorities established by the Board
in the areas of Education, Public Safety, employee training, customer service, capital
maintenance and cultural/recreational efforts, while doing so in a fiscally accountable
manner.
• The largest expenditures by percentage are Education at 25%, Public Safety at 23% and
Health & Human Services at 19%.
The public's demand for County services has increased and will likely continue to increase due to
the tremendous growth Harnett County is currently experiencing. The County experienced the sixth
largest increase in population of any micropolitan area in the United States from 2016 to 2017 and
is now the 10th most populous micropolitan area in the nation. The resulting increase in budget
requests from most County departments and other agencies has made balancing the budget in a
fiscally responsible manner a difficult process. I would like to thank our department heads for their
May 29, 2018 Work Session Minutes
Harnett County Board of Commissioners
Page 1 of 6
efforts on the budget and our management team — Finance Officer Kimberly Honeycutt, Deputy
Finance Officer Allen Coats and Interim Assistant County Manager Brian Haney — for their crucial
contributions during the budget process.
I would like to highlight a few accomplishments during FY 2018.
• Increased capital outlay funding for Harnett County Schools by more than $1M.
• Renovated 420 McKinney Parkway as the new County Administration Building and
relocated staff; installed much needed departmental storage areas in warehouse.
• Relocated Animal Control staff from the Harnett County Animal Shelter, allowing for the
expansion of the existing shelter, and hired Animal Shelter Manager/Adoption
Coordinator.
• Began renovating a portion of the former Shawtown School.
• Obtained bids on demolition costs for several County -owned buildings that are no longer
habitable.
• Completed the Master Plan for the Harnett County Library System.
• Launched and maintained the Keep Harnett Beautiful campaign.
• Began the design phase for a new government complex facility to include Veterans
Services, the Harnett County Public Library, Parks and Recreation, Division on Aging and
County Administration. Began the design phase for an addition to the existing Department
of Social Services building as well as a lobby renovation.
The following sections include highlights of the proposed budget as they relate to revenues and
expenditures.
GENERAL FUND REVENUES - $118,387,303
Other Revenues
B.13%
Investment Earnings
0.30% 1
Sales & Services
7.02%
Ad Valorem Taxes
53.12%
Intergovernmen
Revenue
13.14%
Permits & Fees
3.53%
Other taxes
L33%
`Sales Tex
13.43%
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Harnett County Board of Commissioners
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Ad Valorem Taxes - The proposed budget has been developed based on a total assessed real
property value of $8,337,965,227 and we project collections of $62,890,052 for the coming fiscal
year.
Sales Tax - We project the County's sales tax revenue to decrease from current year projections
based on the rate we are currently receiving them. Total projected sales tax revenues are
$15,904,175.
Intergovernmental Revenue — We expect these revenues to decline to $15,558,242, primarily based
on payments being made directly by the State for programs in the Department of Social Services.
Fee Increases — Emergency Services, Health and Parks & Recreation have suggested minor fee
increases.
CCCC
0.96%
Board of
Education
Debt
7.82%
Board of
Education
Expense
16.34%
GENERAL FUND EXPENDITURES - $118,387,303
Interfund
Transfers
9.05%
County - Debt
Service
•7.82%
Contingency
_0.36%
General
Government
10.45%
Cultural &
Recreation
1.92%
Humey
Services
1858%
Economic & Physical
Development
3.05%
Public
safety
23.15%
Transportation
0.35%
Environmental
Protection
0.1596
Personnel — Salaries and wages are up $1.4M over the prior year due to implementation of the
Performance Pay Plan, the continuation of 3/5 Pay Plan payments, increases in overtime and part-
time salaries, OPEB, and a 3% increase in the cost of health insurance for employees. This expense is
expected to decrease over the next several years as the 3/5 Pay Plan and longevity payouts are
phased out. Of the forty-eight new positions requested, I propose funding seven of them — two in
Human Services, one in Parks and Recreation, one in Facilities Maintenance and three in Public
Safety.
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Harnett County Board of Commissioners
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• Performance Pay Plan - I propose maintaining the annual increase amount of 1.33%
this year with the goal of reaching 1.68% in future budgets.
• 401k Contribution -1 propose the County provide a 2% contribution to all eligible
employees with no employee contribution required.
• OPEB -1 recommend approving a resolution to establish an Irrevocable Trust
Agreement with the State Treasurer's Office to set aside $10 per month per employee
to fund OPEB (other post -employment benefits), with an estimated contribution of
$107,076 annually.
Capital Improvement Plan - This will be the third year since the County established a Capital
improvement Plan (CIP). The C!P has allowed us to purchase items annually within a set amount
instead of pushing necessary expenditures out into future budgets. The proposed budget sets aside
$2,480,710 for capital expenditures.
Board of Education - The Harnett County Board of Education requested just over $3.5 million in
funding for capital outlay items. Using the most current proposed capital funding formula
(percentage of prior year's lottery funds), I recommend allocating 70% of the previous year's
revenue or $1,100,107.
The Board of Education has also requested new school construction totaling $66,588,032. Our
financial advisors have suggested that we will need to increase the County's ad valorem tax rate in
the near future in order to address these needs. it would be prudent to wait on the results of the
statewide school bond issue since its passage would lessen the local burden for the new debt.
Article 46 sales tax (1/4 cent sales tax) only covers a portion of the current debt for the new
Benhaven Elementary School.
The Board of Education requested roughly $4.5M in additional current expense from the FY 2018
funding amount. This year's allocation for current expense is recommended to be $22,931,247. The
current expense allocation includes funding to provide increased supplements to teachers in lieu of
the bonuses which the Board of Commissioners provided in the two previous fiscal years.
I recommend considering a separate allocation at a later time for the requested security measures
in capital outlay and current expense based on the findings of the House Select Committee on
School Safety, chaired by Rep. David R. Lewis and Rep. John A. Torbett. That said, priority security
measures may be undertaken using a portion of the proposed capital and current expense
allocations.
Central Carolina Community College - Funding for CCCC's current expense is proposed to increase to
$1,140,207, or a 5.5% increase from FY 2018, and capital outlay is proposed to be $200,000, up from
$30,000 in FY 2018. Projects include resurfacing the parking lots on the Harnett Main Campus,
purchasing a maintenance vehicle, upgrading lighting and upgrading doors. I recommend
consideration of funding the Harnett Promise initiative during the FY 2020 budget process.
PUBLIC UTILITIES
• A budget of $33,135,753 is proposed for FY2019 compared to $34,809,109 in the current
year, which represents a decrease of approximately 5%. No appropriation of fund balance
is recommended.
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Harnett County Board of Commissioners
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• No new positions are requested.
• No rate increases are included for residential, bulk water, or bulk sewer.
• A few fee increases are proposed, mainly for the System Development Fees, which were
presented to the Board of Commissioners on April 10, 2018, and were posted on the
Harnett County website for 45 days.
o Water SDF going from $1,200 to $2,000 (Max of $7,774 could be charged)
o Sewer SDF going from $1,800 to $2,500 (Max of $4,392 could be charged)
o A public hearing will be held on these proposed fee changes along with the public
hearing on the proposed budget.
• Two waterline projects are scheduled for FY 2019 — one along N.C. 87 to Western Harnett
Innovation Park for the new Benhaven Elementary School and one in Bunnlevel for
hydraulic purposes. The wastewater plant in Lillington (North Harnett WWTP) is also
scheduled to be upgraded. The total cost of these three projects amounts to $7M.
SOLID WASTE
• A proposed increase is included for the MSW (municipal solid waste) fees to $45/ton, up
from $40/ton. This is based primarily on annual CPI increases in hauling contracts.
• Landfill tipping fees for all other non-household/recycling items are proposed to increase
to $45/ton, up from $40/ton.
• Included are plans for a new permanent household hazardous waste facility to be built this
year with grant funds as well as a new landfill expansion at Dunn Erwin.
• Funds for ongoing convenience center improvements are also included along with a few
capital items. The total solid waste budget increased slightly by 1%, to $5,811,400.
FIRE TAX DISTRICTS
• Harnett County Emergency Services recommends approval of the Summerville/Bunnlevel
fire tax levy to increase from 8 cents to 10 cents per $100 valuation. The department is
saving for a new fire truck in FY 2023 and needs to purchase new air packs this year.
• No other fire tax increases were requested.
RESCUE DISTRICTS
• The proposed budget includes a 3% increase across the board for rescue districts. Last year
saw the first increase since FY 2012.
• We realize the cost of doing business is increasing, so we plan to establish a funding
formula for FY 2020 based on the EMS Medicaid cost settlement program.
• Squads requesting funding increases include Benhaven, Boone Trail, Coats Grove, Dunn
and Erwin. Anderson Creek and Buies Creek did not request increases. The total request
was $401,113 and the amount included is $103,877 (without any Medicaid cost settlement
disbursements).
This FY 2019 recommended budget is an investment in Harnett County's future. it shows fiscal
restraint in many areas, but will also allow the County to better serve our citizens. Our goal was to
prepare a budget that supports the priorities you have established, and that will strengthen the
county's financial position to address future needs and priorities.
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Harnett County Board of Commissioners
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Mrs. Honeycutt said originally they had talked about setting up a funding formula to fund
capital needs for Harnett County Schools however staff now proposes funding the school capital
needs as a percentage of the prior year's lottery funds. Staff recommended funding the school
capital needs at 70% of the prior year's lottery funds which would average about $300,000
quarterly. It was the consensus of the Board to fund school capital needs at 65% of the prior
year's lottery funds. Commissioners also asked that Harnett County Schools includes the capital
that they have spent as part of their monthly financial report to the Board.
Proposed 2018/2019 budget discussions continued. Staff provided an updated budget summary
and responded to questions. Mrs. Stewart asked the Board if staff could start advertising for
badly needed new positions but hold funding until July 1. Staff briefly reviewed the proposed
fee schedule and will provide copies to commissioners. Staff asked the Board to consider
approving an increase in the threshold for Capital Outlay to $20,000 from $10,000 within the
forthcoming Budget Ordinance.
Mrs. Stewart reviewed the draft June 4, 2018 regular meeting agenda, invitations and
upcoming meetings. She noted staff recently attended the Freedom Balloon Fest meeting in
Fuquay-Varina that went very well. Mrs. Stewart said they talked about bringing it in to Harnett
County the following year; maybe landing some of the balloons in Harnett County. She also said
she was asked a lot of questions about the Northwest Harnett area. Last, staff shared proposed
signage for the Western Harnett Innovation Park.
Mrs. Stewart and Capital Projects Manager Steve Ward updated the Board on the air-
conditioning outage at the Department of Social Services and Health Buildings. She noted some
staff has been relocated but all services were being provided.
Chairman Springle requested a meeting with two commissioners, two Board of Education
members and staff from the Sheriff Office and Emergency Services to look at each school
individually and talk about what needs to be done. Commissioners said they would also need to
talk about the School Resource Officers.
There was no need for a closed session.
Commissioner Elmore moved to adjourn the meeting at 10:00 am. Commissioner McKoy
seconded the motion that passed unanimously.
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May 29, 2018 Work Session Minutes
Harnett County Board of Commissioners
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