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HomeMy WebLinkAbout060712mHARNETT COUNTY BOARD OF COMMISSIONERS Minutes of Budget Special Session June 7, 2012 The Harnett County Board of Commissioners met in special session to discuss the proposed budget on Thursday, June 7, 2012, in the Commissioners Meeting Room, County Administration Building, 102 East Front Street, Lillington, North Carolina. Members present: Staff present: Timothy B. McNeill, Chairman Beatrice B. Hill, Vice Chairman Dan B. Andrews, Commissioner Gary House, Commissioner Jim Burgin, Commissioner Scott Sauer, County Manager Tony Wilder, Deputy County Manager Dwight Snow, Staff Attorney Sylvia Blinson, Finance Officer Margaret Regina Wheeler, Clerk to the Board Chairman McNeill called the meeting to order at 9:00 am. Mr. Steve Ward, Director of Public Utilities, gave an overview of the on -going Capital Improvement Plan which includes recent discussions with the Board including the West Central Transmission Project. Mr. Ward reminded the Board that approval of the Capital Improvement Plan does not bind the county yet approval only signifies agreement with the department's vision. Mr. Ward discussed the capital project budget summary which combines all of the proposed capital projects discussed in the report. He said it provides a snapshot of anticipated capital needs over the next five years. Mr. Ward noted the expenditures section shows each projects total budget and the revenue section shows the expected funding sources for each year. Mr. Ward explained if the proposed $20,218,100 of new debt is incurred within the next year it would increase Public Utilities' debt to $70 Million with $270 Million in equity, resulting in a good debt to equity ratio. Mr. Ward noted the final page of the plan includes suggested rate increases of $1 on water and approximately $1.50 on sewer for this coming year. He said the rates were a little over 3% which is consistent with the 2011 CPI which is how they have done this the last 5 years. June 7, 2012 Budget Special Session Minutes Harnett County Board of Commissioners Page 1 of 7 Commissioner House questioned if the Erwin Infrastructure Improvements include replacement of any old water lines in the Town of Erwin. He said he receives a lot of complaints from those citizens. Mr. Ward said it does not and explained that when Harnett County bought the water system from the Town of Erwin in 2006 they agreed to do some improvements along Hwy 421 between Dunn and Erwin. Mr. Ward said the agreement calls for Public Utilities to build a 16" waterline from the intersection of Hwy 421 and Hwy 55 to the Black River however the City of Dunn already has a 24" water line that comes from their Powell Avenue tank to Red Hill Church Road. Mr. Ward said he is not sure the state will even permit running a 16" line beside of a 24" line. Mr. Ward said he was talking to the town about the possibly of using those funds for other areas of improvements because Harnett County Public Utilities feels like some of the proposed improvements seem redundant. Commissioner House questioned if the Erwin Infrastructure Improvements include replacement of any old water lines in the Town of Erwin. He said he receives a lot of complaints from those citizens. Mr. Ward said it does not and explained that when Harnett County bought the water system from the Town of Erwin in 2006 we agreed to do some improvements along Hwy 421 between Dunn and Erwin. Mr. Ward said the agreement calls for Public Utilities to build a 16" waterline from the intersection of Hwy 421 and Hwy 55 to the Black River however the City of Dunn already has a 24" water line that comes from their Powell Avenue tank to Red Hill Church Road. Mr. Ward also said he is not sure the state will even permit running a 16" line beside of a 24" line. He said the agreement also included running a gravity line along 421 starting at Red Hill Church Road all the way to the Black River and discussed issues with this concept. Mr. Ward said he was talking to the town about the possibly of using those funds for other areas of improvements because Harnett County Public Utilities feels like some of the proposed improvements seem redundant. Mr. Wards said Public Utilities is committed to spending the same amount of money that is called for in the agreement but there needs to be some serious thought of how to spend that money in Erwin. Mr. Ward said he did budget $65,000 under "other improvements" that could possibly be used to replace some of the water lines in Erwin. Mr. Ward said they had previously taken bids for some additional improvements around E Street in Erwin. Joseph Jeffries, Director of the Planning Department, clarified that the Developmental Review Board (DRB) approves subdivision plans consistent with the ordinance. Commissioner House questioned if the DRB puts any emphasis on other needed infrastructures such as schools when considering approval. Mr. Jeffries responded that the DRB mainly looks at it from a technical stand -point and making sure they are in compliance with the subdivision standards without June 7, 2012 Budget Special Session Minutes Harnett County Board of Commissioners Page2of7 considering other infrastructure needs which would be more of a policy type decision for the Board. Mr. Jeffries said they do send all subdivisions requests to the Board of Education as an advisory member to the DRB and he is not aware of any comments received. Mr. Jeffries said there had been discussions in the past regarding an Adequate Public Facilities Ordinance, which would include schools, but he understood it seemed to have a lot of legal issues and required a capital improvement plan in place. Commissioner House requested clarification regarding the FY 2014/2015 $3.4 Million developer participation included in the budget. Mr. Ward said the $3.4 Million developer participation is the other part of existing development out there like Lexington. Mr. Ward said this would be the thoroughfare to let them serve all 3000 lots because the existing capacity is not there through the force main. Mr. Ward said that project is a means for that to happen without them doing the construction themselves and is an estimate of half from the federal government and half from the developer for that project as required by their ordinance. Mr. Ward responded there are approximately 39,200 residential customers that would pay the $1 rate increased for water. Commissioner Burgin asked about the possibility of an increase in the water bulk rate to off -set the increase in the residential rate. Mr. Ward said you have to be careful not to price yourself out of the market as several customers have other options at which point Commissioner Burgin requested a comparison of bulk rates in surrounding counties. Mr. Ward also pointed out when you raise the bulk rate of water sold to the towns in the county the cost will still be passed on to the citizens. Mr. Ward said the rate had remained at $17.50 for 3 years. Mr. Sauer reported the Sheriff's Department and Emergency Services had identified revenue and some cost savings options and were requesting budget adjustments and flexibility. Mr. Sauer announced the Sheriff is willing to give up 10 patrol cars for some flexibility on a couple of frozen positions, additional training dollars, travel, material and supplies. Mr. Sauer also noted the Sheriff's Office is averaging 60 to 62 inmates each day which is higher than expected. Mr. Sauer reported, in regards to EMS, the county received $1.8 Million from the Medicaid settlement which was higher than anticipated and budgeted. Mr. Sauer said the Sheriffs Office and Emergency Services had generated enough additional funds to cover their requested changes without negatively impacting the upcoming budget. Commissioner Burgin said he had suggested to the Cumberland County Commissioners that they send their inmates to Harnett County instead of adding on to their facility. Mr. Jerry Blanchard presented the solid waste fee comparisons and discussed options for increasing revenues for the Solid Waste Enterprise Fund. Staff has researched the "Ordinance for Availability and Use Fees for Solid Waste Disposal Facilities, Harnett County, North June 7, 2012 Budget Special Session Minutes Harnett County Board of Commissioners Page 3 of 7 Carolina" which does not currently allow the County to charge a tipping fee to commercial and municipal haulers. Staff noted the Ordinance would have to be amended to allow the option of assessing tipping fees for Commercial Haulers for Residential MSW. The greatest advantage of this option is that the County could generate revenues up to $1.2 million dollars annually based on approximately 30,000 tons of residential MSW at $40 /ton. However, MSW tonnage varies from year to year and there is no way of knowing how much MSW tonnage may actually be diverted out of the County due to the assessment of tipping fees. Staff noted another disadvantage of this option for the upcoming fiscal year is the Towns have already presented their budgets and have negotiated their solid waste contracts which are based on the premise that Harnett will not charge tipping fees for residential disposal for FY 2013. Staff provided a table of the potential increase in costs for the Towns if tipping fees were collected from commercial haulers based on MSW tonnages reported in their FY 2011 NCDENR Municipal Reports. Mr. Blanchard gave an overview of detailed research and comparisons related to this option. Mr. Blanchard reported the advantage of Option 2 which is increasing the availability fees for households only is the high rate of collection on the tax bill and guaranteed revenue based on the number of households. The County would generate approximately $960,000 based on approximately 48,000 households at a $20 per year increase. It is estimated that this increase will cover the funding gap through FY 2014. He noted the disadvantage is that with this increase, the household availability fee would be $70 per year. Mr. Blanchard discussed the advantage of assessing availability fees for commercial properties. He said the advantage of this option is that the County can collect from commercial properties that may not be currently paying for tipping fees or availability fees. As previously discussed, collection of availability fees for these properties is allowed by the Ordinance. Based on data from the tax office, Mr. Blanchard said it is estimated that there are approximately 2,000 commercial property listings and approximately 1,500 church and non - profit properties. Currently availability fees are only collected from households. He told commissioners based on our current availability and recycling fees of $50 per year, this option could generate approximately $175,000 in revenue annually. Mr. Blanchard said the disadvantage of this option is finding a method to assess the fee. Tax records do not take in to account multiple businesses that may be on one property. In conclusion, staff believes in order to collect the revenues for the next fiscal year; the most expedient option would be to increase availability fees for households. Mr. Blanchard reported a multi - faceted approach should be considered to equitably cover the cost for solid waste June 7, 2012 Budget Special Session Minutes Harnett County Board of Commissioners Page 4 of 7 management. He suggested, in the upcoming fiscal year, that the County could develop a method to impose availability fees for commercial enterprises including individual businesses, manufacturers, industrial plants, utilities, churches, school, hospitals, rest home facilities, and non - profit institutions in accordance with the Ordinance. The County can also work to revise the Ordinance to allow the collection of tipping fees from commercial haulers beginning in FY 2014. Chairman McNeill mentioned having citizens apply for a business license through the county as a way to identify businesses. Mr. Jeffries mentioned this would also be a way to pick up video poker machines in the county. Paula Steward, IT Director, said she believes staff has a good starting point for identifying almost all businesses between 911, EMS and Public Utilities databases. Commissioner Burgin questioned what was being done with the additional $5 recycling charge. He also requested numbers on recycling tonnage which Mr. Blanchard will provide as well as polling haulers regarding recycling. Commissioner Burgin pointed out that a $20 increase would equal a 40% fee increase; saying he wished staff would do something different suggesting a $10 increase instead. Amanda Bader, County Engineer, mentioned the possibility of borrowing money from Public Utilities to defer said citizens have enjoyed subsidized rates for years. Commissioner Burgin noted the foot notes in past audits referenced landfills and added auditors put those footnotes in for liability. He said we knew this expense was hanging out there and said we would take from fund balance. Commissioner Andrews said he thought it would be best to raise the rate $20 and charge availability fee for every business. Commissioner Burgin asked if the rate was increased by $20 if it could be only for one year and let the public know this. Mr. Sauer reported Harnett County has been awarded the Adult Services and Dislocated Worker Programs contract for FY 2013 in Workforce Development. Mr. Sauer noted the budget for this program has increased from $300,000 to over $700,000. He noted this additional work would probably require a 2.5 increase in employees funded with state funds. Staff responded to initial budget questions from the Board of Commissioners. Staff distributed a sheet showing the gross payroll which did not include benefits but averaged over 2.7 Million a month. It was noted November included longevity. Commissioner Burgin also asked for the total amount of longevity. Also distributed was the Recommended Budget — Salaries by Department which estimated it would cost approximately $838,821 to give 3.5% COLA to employees which included full -time and part-time staff. June 7, 2012 Budget Special Session Minutes Harnett County Board of Commissioners Page 5 of 7 Chairman McNeill said we would need to know the total budget impact which would include taxes, FICA, etc. Commissioner Burgin said another option would be for the county could to put additional money in HSA account. Chairman McNeill noted he had been approached by employees who did not take the county insurance saying they feel like they are being penalized and asked if they could also get the $1000. Chairman McNeill asked department heads if they had issued they would like to discuss. Mr. Jeffries mentioned that the rehab at the airport was not funded. Mr. Jeffries said staff has talked to the Division of Aviation and been told if the County doesn't fund the project they will lose over $3.5 million. Sylvia Blinson, Finance Officer, reported that it looks like the county will hold flat at approximately $18 Million in the general fund. Commissioner Burgin said the county did in one year what Davenport had said they would do for the general fund in 4 to 5 years. It was the consensus of Board to add back in the budget the funds needed for the airport rehab. Mrs. Blinson explained that staff had added 242 Special Districts Fund which had always been in the budget just arranged different. It was noted that the budget needed to reflect a .01 cent increase for the Summerville Bunnlevel Fire Department. Detailed budget discussions continued. It was noted $72,000 was put in a separate account for legal fees for County Attorney Dwight Snow but legal fees were broken out in other departments to make consistent across the budget. Finance staff mistakenly included an increase in Mr. Sauer's salary which he did not reinstate and this was corrected. It was confirmed that funding had been included in the budget for senior centers at $6000 each. It was noted the CCR &R coordinator position was reinstated in Cooperative Extension budget this year. Mr. Jeffries told commissioners staff had received approval that they would be receiving approximately $38,000 in state funds to use toward abandoned homes? Commissioner Burgin asked to put $30,000 in the budget for S.A.F.E. Chairman McNeill asked to put $10,000 in the budget for Special Olympics. It was also the consensus of the board to add $25,000 to the budget for the H.A.L.T. program. Mr. Blanchard said there is a need to increase fees for transportation up to at least $1.40 and was directed to work with the County Manager to include this increase in the proposed budget. Vice Chairman Hill said HARTS drivers feel they are underpaid as part time employees. June 7, 2012 Budget Special Session Minutes Harnett County Board of Commissioners Page 6 of 7 Commissioner House asked about the proposed fees for environmental health and questioned if the $750 fee for septic tank would stay the same. It was noted Home Health revenues went down as a result of business declining but John Rouse was not available at this time to answer questions. Carl Davis, Director of Parks and Recreation, responded they had over - estimated recreation fees the first year in response to Commissioner House. It was also noted that Public Utilities helps underwrite the general fund activities by over $1 Million a year. Staff change the way they were accounting for unemployment benefits in this budget and Commissioner House asked about bank fees. Mrs. Blinson discussed the Worker Comp program noting the Local Government Commission recently wrote the county up regarding the funding of this program. Commissioner Burgin offered to get the experience mod for Harnett County. Commissioner House said he would like Triangle South to be funded at $30,000. Commissioner House questioned if the Anderson Creek library would be kept open and was assured the cost was included in the Library's budget. Commissioner House also questioned if we bid out contacts for sludge haulers. Commissioner Burgin asked about the status of all contracts being put on -line. Staff noted IT was working with legal staff as to what exactly could be posted on -line. Commissioner Burgin recommended taking $500,000 away from the Harnett Forward Together Committee (HFTC) and $500,000 from the General Fund for $1 Million to be used for an increase for county employees. Commissioners House and Burgin said they understood that HFTC was getting $600,000 for an upcoming land sale. Commissioner Burgin said he also understood that Cumberland County only puts $500,000 toward their economic development which Chairman McNeill responded he was comparing apples to oranges as the City of Fayetteville also puts money into economic development. The meeting adjourned at 11:31 am. cNeill, Chairman • eeler, Clerk June 7, 2012 Budget Special Session Minutes Harnett County Board of Commissioners Page 7 of 7