053017wsmHARNETT COUNTY BOARD OF COMMISSIONERS
Minutes of Work Session
May 30, 2017
The Harnett County Board of Commissioners convened in work session on Tuesday, May 30,
2017, in the Commissioners Meeting Room, County Administration Building, 102 East Front
Street, Lillington, North Carolina.
Members present:
Staff present:
Gordon Springle, Chairman
Joe Miller, Vice Chairman
Barbara McKoy, Commissioner
Howard Penny, Commissioner
Abe Elmore, Commissioner
Joseph Jeffries, County Manager
Paula Stewart, Deputy County Manager
Dwight Snow, County Attorney
Kimberly Honeycutt, Finance Officer
Allen Coats, Deputy Finance Officer
Margaret Regina Wheeler, Clerk
The following agenda was before commissioners:
➢ Presentation of Budget Message and FY 2017-18 Proposed Budget Plan
➢ Budget discussion
➢ Harnett Regional Jetport — Terminal Building Schematics
➢ Electronic Records & Imaging Policy
➢ Technology Use Policy
➢ Property Liability Insurance Carrier discussion
➢ Town of Erwin's library request
➢ County Manager's Report:
- June 6, 2017 Regular Meeting Agenda Review
- CCCC Board of Trustee Appointment
➢ Closed session
• Adjourn
Mr. Jeffries presented the following Budget Message and FY 2017-18 Proposed Budget Plan to
the Harnett County Board of Commissioners:
In accordance with the General Statutes of North Carolina, I hereby submit the proposed
Harnett County Budget for the 2017-18 Fiscal Year for your review and consideration. The
budget as proposed is balanced and has been prepared under the guidelines of the North
Carolina Local Government Budget & Fiscal Control Act. The proposed budget also
incorporates the priorities and policy direction communicated to staff by the Board of
Commissioners. As we approach a new fiscal year, Harnett County's financial condition
continues to improve. Harnett County has continued to experience significant growth during
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Harnett County Board of Commissioners
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the past year including commercial and residential development, along with increased sales
tax revenue.
The proposed budget was developed following the submittal of budget requests by department
heads and meetings with each department regarding top priorities and capital needs. Harnett
County's department heads are to be commended for the fiscal restraint they have
demonstrated in their budget requests. I would also like to thank Finance Officer Kimberly
Honeycutt, Deputy Finance Officer Allen Coats and Deputy County Manager Paula Stewart
for their essential contributions in developing this document.
A number of factors had a significant impact on the proposed budget and the thought that
went into its creation. Some highlights of the proposed budget include:
• North Carolina General Statute 159-11 requires each taxing unit to publish a revenue -
neutral property tax rate ("revenue -neutral rate") as part of its budget for the fiscal
year following the revaluation of its real property. The revenue -neutral rate for
Harnett County following the 2017 Property Revaluation is 77.02 cents per $100
valuation.
The current ad valorem tax rate of 75 cents per $100 property valuation is proposed to
remain unchanged
Additional funding to increase supplements for Harnett County's teachers.
• Funding for Harnett County's first Early College for high school students, to be
located at the Dunn Center campus
➢ Funding for the renovation of the current Benhaven Elementary School as a second
Early College location
➢ Funding for construction of the new Benhaven Elementary School and expansion of
the Overhills High School cafeteria
• Funding for additional teachers to reduce classroom size for grades K-3
i= Tentative plans for design and construction of a new facility that would include
Veterans, Probation and DSS.
r Tentative plans for design and construction of a new terminal at Harnett Regional
Jetport
r Implementation of the Springsted Compensation Study recommendations to adjust
county salaries to market
• Expansion of the North Harnett Wastewater Treatment Plant from 5.6 MGD to 7.5
MGD
Implementation of software expansion in Finance and Development Services
➢ Veterans Exemption legislation will result in a loss of revenue of $661,359.00
• Funding for the second year of Harnett County's 5 -year Capital Improvement Plan for
the general fund
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Harnett County Board of Commissioners
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GENERAL FUND REVENUES
The following sections include highlights of the proposed budget relating to revenues and
expenditures.
Investment Earnings
0.17%
Sales & Services
6.34%
Other Revenues
9.47%
_ Ad Valorem Taxes
47.46%
Intergovernmental Revenue
16.65%
Permits & Fees
2.96%
Other taxes
1.02%
Sales Tax
15.93%
The proposed 2017-18 budget was developed with a conservative approach to revenue and
expenditure projections, which has served the county well in the past. The following items
highlight the status of major county revenue sources:
Ad Valorem Tax
The proposed budget was developed based on a total assessed value $8,172,170,841. Utilizing a
tax rate of 75 cents per $100 property valuation and a 2015-16 total property tax collection rate
of 99.28 percent, we are projecting tax collections of $60,849,984 for the coming fiscal year.
Sales Tax
We project the County's sales tax revenue to grow by 5 percent, bringing total projected sales
tax revenues to $20,655,250. The projected increase in sales tax revenue is a reflection of our
growing economy. According to the U.S. Census Bureau, Harnett County was the 92nd fastest
growing county in the United States from 2010 to 2015. We anticipate continued growth, both
in terms of population and development, which will have a positive impact on future sales tax
revenue.
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Harnett County Board of Commissioners
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Unassigned Fund Balance
The Harnett County Board of Commissioners has set a goal of maintaining a targeted
unassigned fund balance equal to 20 percent of the County's annual budget. As of June 30,
2016, the County's unassigned fund balance is $26.3 million or 23.4 percent of the County's
annual budget. The proposed budget does not include any appropriation from fund balance.
GENERAL FUND EXPENDITURES
The following is a breakdown of the County's proposed expenditures:
Board of
Education
Expense
19.39%
Interfund
Board of CCCC Transfers
Education 1.48% 0.79%
Debt
8.46%
County - Debt
Service
S.79%
Contingency
_0.36%
General
Governrnent
10.87%
Cultural &
Recreation
1.8O%
Humap
Services
23.25%
Economic & Physical
Development
3.20%
Public
Safety
24.08 %
Transportation
0.36%
Environmental
Protection
0.16%
Proposed expenditures reflect an overall increase of 4.29 percent, with most of the increase
coming from debt for the new Benhaven Elementary School, increased health insurance costs,
new software implementation, implementation of the Springsted Compensation Study
recommendations, increased expenditures for education, and the Capital Improvement Plan.
Total proposed expenditures for the 2017-18 Fiscal Year are $129,661, 787. The following items
highlight expenditures of particular interest:
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Harnett County Board of Commissioners
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Personnel
As we continue working to improve benefits and compensation for county employees to better
reflect the current market, the proposed general fund includes $1.8 million to implement the
recommendations of the Springsted Compensation Study, which were approved by the Board of
Commissioners on March 6, 2017.
Additionally, the Board of Commissioners approved the new Performance Pay Plan to go into
effect on July 1, 2017. As adopted, the Performance Pay Plan allows employees to earn salary
increases every three years beyond the 3/5 Pay Plan based on their performance reviews. Per
the Harnett County Personnel Ordinance (Article III, Section 6.2), the amount of the increase
must be set every three years by the Board of Commissioners as part of the budget process. It is
my recommendation that the increase for the first three-year cycle be set at 4 percent which will
equal 1.33 percent per year. The proposed budget includes $235,755 for the first year of the
Performance Pay Plan's implementation.
Department heads requested 20 new positions in the 2017-18 budget. I propose funding two of
those positions—one in the County Staff Attorney's Office and the other in the Harnett
County Sheriffs Office. While the remaining 18 position requests were not without merit, I
do not propose funding them at this time in the interest of fiscal restraint.
Education
Overall funding for Harnett County Schools is proposed to increase by $4.78 million. The
majority of this increase is due to the need for additional teachers funded by local dollars to
reduce classroom sizes for Kindergarten through Grade 3; funding for additional teachers to
assist at low performing schools; funding for the county's first Early College program in Dunn;
and an increase in teacher supplements. In addition, the County sold $29.5 million in bonds to
finance construction of the new Benhaven Elementary School (with debt payment of $2.5
million), the cafeteria expansion at Overhills High School, and renovations to the existing
Benhaven Elementary School to accommodate Early College in western Harnett County. As a
result, total debt service for Harnett County Schools is $134,637,314 with a debt payment of
$10,967,051 in 2017-18. The Board of Education requested $3.1 million in funding to pay for
Capital requests, of which I propose funding $1.375 million through a variety of methods. We
were able to provide $122,000 out of the current budget, an additional $503,000 through general
obligation bonds, and $750,000 from the County's General Fund. I propose $25,762,766 in
total local funding for Harnett County Schools.
PUBLIC UTILITIES
Harnett County Public Utilities, in accordance with its Capital Improvement Plan, has three
major water transmission capital projects slated for the coming year. These include
transmission improvements to serve the new Benhaven Elementary School in Western Harnett
Industrial Park, an upgrade to address hydraulic deficiencies in the Bunnlevel area, and
construction of a new line and pump station to serve the U.S. 421 corridor in the Seminole
area. As part of the Public Utilities Efficiency Study, the department will continue the upgrade
of its customer service and billing software. The following wholesale bulk rate increases are
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Harnett County Board of Commissioners
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proposed for water and sewer -6 percent for water and 8 percent for sewer. Capacity fees are
also proposed to increase by $200 per lot for water and by $600 per lot for sewer. The overall
budget for Public Utilities is $32,812,608.
SOLID WASTE
Harnett County Solid Waste has continued improvement of its financial position over the past
year. The department has a current cash -on -hand balance of $2,031,395. Capital outlay
needs for 2017-18 include new scales at the Dunn -Erwin Landfill for implementation of a fast
lane, land acquisition for additional convenience sites throughout the County, expansion of a
recycling program, and construction of a new maintenance facility at the Anderson Creek
Landfill. Cell expansion projects are ongoing at both the Dunn -Erwin and Anderson Creek
landfills. Lastly, Solid Waste proposes implementing a $10,000 credit for each of the county's
five municipalities, which is reflected in the proposed budget. The total budget for the
upcoming year has been reduced by 11 percent from last year to $5,677,488.
FIRE TAX DISTRICTS
Harnett County Emergency Services recommends approval the Fire Tax Levy requests from
Benson Banner to increase from 9 cents to 10 cents per $100 valuation and from Erwin Fire
Department to increase from 8 cents to 8.5 cents per $100 valuation. Due to an increase call
volume, future equipment needs and maintaining compliance with Medical Director's
recommendations, I propose a 3 percent increase for all seven EMS agencies for a total budget
impact is $100,851.
CONCLUSION
I believe the proposed 2017-18 budget meets the Board's expectation offiscal responsibility. The
budget achieves the goal set forth by the Board of Commissioners of maintaining a fund balance
equal or above 15 percent with a target of 20 percent of the County's annual budget. Most
recently, the Board's sound fiscal policies and direction resulted in an upgrade to Harnett
County's general obligation bond rating by Moody's Investors Service from Aa3 to Aa2. In
announcing the upgrade, Moody's stated it "reflects the favorable location between Raleigh and
Fayetteville, the sizable and growing tax base with below average wealth levels, healthy reserves
and liquidity, and manageable fixed costs." The upgraded bond rating allows the County to
attract a more competitive interest rate when issuing general obligation bonds, which has
already resulted in dividends related to the Benhaven Elementary project.
As Harnett County continues growing and experiences more demand for programs and services,
it will be even more essential to proactively plan for the future. You have expressed your
commitment to doing this by prioritizing the education of our children, seeking out creative and
innovative ways to provide additional services for our citizens, making sure the County is able
to attract and retain a talented and capable workforce, and working to improve the lives of our
citizens. You have done all of this while keeping a watchful eye on taxpayer dollars. I truly
believe the best is yet to come for Harnett County and that the proposed 2017-18 budget is a
significant step in that direction.
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Harnett County Board of Commissioners
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Mr. Jeffries led the budget discussion. He clarified what was included in the proposed budget for
the Board of Education and outlined items for consideration. Mr. Jeffries stated that funding for
K-3 class size reduction had been set aside in previous years, with approximately $300,000 being
used towards that goal, and the Board of Education's request is based on current needs. He said
no additional classrooms are needed at this time. Mr. Jeffries will research if we are able to
replace the amount for teachers with state funding. Discussions continued. Mr. Jeffries also
noted that the schools are waiting for budget approval to order some new school buses. He also
noted that Early College is impacted by the state's budget and could go up to $581,000.
Mr. Jeffries said he had included within the proposed budget a $10,000 solid waste credit for
each of the five municipalities. He also proposes a 3% increase for all seven EMS districts,
saying this may not meet all their needs but believes it is heading in right direction.
Barry Blevins, Director of General Services, presented the schematics for the new terminal
building for the Harnett Regional Jetport. He noted that preliminary project cost for the terminal
rehabilitation or the terminal replacement is estimated at $2 Million. Mr. Blevins reported that
the Airport Committee recommended the split-level design (building elevation) with the layout
requiring refinement and approval. He asked commissioners their recommendation. Mr. Blevins
said he is confident that parts of the project can be funded with FAA monies. Airport Committee
member Rhett Raynor addressed the group saying the Airport Committee is very excited about
the design as well as Economic Development being housed at the airport. Discussions
continued. The group also discussed the need to look at new hanger space in the future.
Vice Chairman Miller asked what could be done to make citizens responsible for their dogs,
noting issues with dangerous dogs. Mr. Blevins responded that staff has been working with
rescue groups and are trying to come up with proposed changes to the local ordinance that goes
beyond state statute. Discussions continued.
Ira Hall, Director of Harnett Information Technology, gave a quick overview of the proposed
Electronic Records & Imaging Policy which establishes guidelines and requirements governing
the creation, maintenance, use and retention of County documents and to assign responsibilities
for administering these functions. He also reviewed the proposed Technology Use Policy that
establishes guidelines and requirements governing the acceptable use of County technology
resources. Lisa McFadden was also present. Commissioners will consider approval of the
proposed policies during their upcoming regular meeting.
Heather Pollard, Director of Human Resources, recommended a change of Property Liability
Insurance Carrier. She briefly reviewed the RFP process used to select Traveler's Insurance to
be the County's property liability insurance carrier effective July 1, 2017. Staff said this should
allow for substantial cost savings and the opportunity to obtain higher limits of coverage.
Angela McCauley, Director of Harnett County Library, sought direction regarding the Town of
Erwin's request for the County to assume responsibility for their library operations given their
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Harnett County Board of Commissioners
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currently budget shortfall. Mrs. McCauley provided a brief overview of where we are and where
we hope to go with a county -wide library system. She noted a current division of expenses but
said much of the framework already exists for consolidation. Discussions continued. Staff
provided a proposed total operating budget of $93,070 for the Erwin Library. Mrs. McCauley,
who supports consolidation, said we have four municipalities interested in doing this she hopes
we can offer to provide for all of them at the same time. It was the consensus of the Board to
deny the Town of Erwin's request until we have a plan in place for the entire county, including
what the structure and cost will be. Commissioners directed staff to continue with the process in
place; noting it seems like a good plan to help all four municipalities and serve the citizens.
Mr. Jeffries reviewed the proposed June 6, 2017 regular meeting agenda. He mentioned as a
potential add-on Information Technology's request for approval of a special salary adjustment of
5% increase for Information Systems Admin/Assistant IT Director Lisa McFadden upon the
completion of her Master's in Public Administration.
The group discuss the revaluation and the appeal process through the Board of Equalization and
Review. Mrs. Honeycutt responded that the proposed budget is based on projected revenues
given to her as of March but staff is budgeting conservatively. They also talked about a planning
an event in June to celebrate the last payment on the Harnett County Courthouse.
Mr. Jeffries reported that Clem Medley is not able to serve on the CCCC Board of Trustees
however Chairman Springle is interested in being appointed to serve on this Board.
Commissioner McKoy moved that the Board go in to closed session for the following purposes:
1) To discuss certain personnel matters; and
2) To instruct the county staff concerning the position to be taken by the Count in
negotiating a contract for the acquisition of real property.
This motion is made pursuant to N.C. General Statute Section 143-318.11(a)(6)&(5).
Commissioner Penny seconded the motion which passed unanimously.
Commissioner Penny moved that the Board come out of closed session. Commissioner Elmore
seconded the motion which passed unanimously. Commissioners directed staff to add to the
upcoming regular meeting agenda Harnett County Public Utilities' request for approval to
purchase three acres of property adjacent to an existing sprayfield at Carolina Lakes in Spout
Springs.
Commissioner Elmore moved to adjourn the meeting at 11:27 am. Commissioner Penny
seconded the motion which pass unanimously.
t Regina eler, Clerk
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Harnett County Board of Commissioners
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