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HomeMy WebLinkAbout042418ss revisedHarnett COUNTY NORTH CAROLINA P a D NOTICE OF SPECIAL SESSION OF THE HARNETT COUNTY BOARD OF COMMISSIONERS www.harnett.org The Harnett County Board of Commissioners will convene on Tuesday, April 24, 2018, at 9:00 am in the Hamett County Administration Building, 420 McKinney Parkway, Lillington, North Carolina. The purpose of the meeting is to discuss the FY 2018/19 budget, closed session and consideration of naming a County Manager. This 18th day of April 2018. Harnett County Board of Commissioners strong roots new growth Margaret R Clerk to ina Wheeler e Board MOTION 4 (;Li/ 1 RC 606 bos 3—I I move that Paula Kelly Stewart be appointed as County Manager for Harnett County pursuant to an Employment Agreement which includes an annual salary of $155,000.00 plus benefits. 4/24/2018 Harnett COUNTY NORTH CAROLINA FY18-19 Budget Discussion April 24, 2018 strong roots • new growth Harnett -"In COUNTY NORTH CAROLINA Overview • Personnel Requests • Health Insurance & Benefits • OPEB (Other Post Employment Benefits) • Budget Summary Report • New Budget Impacts • On the Horizon strong roots • new growl)! 1 Harnett —In COUNTY NORTH CAROLINA 4/24/2018 Personnel Requests • Administration received requests for 46 new full-time positions in the following areas: • General Government: 9 • Human Services: 9 • Public Safety: 28 • Of the 46 position requests, 11 are repeat requests from 2017-18 ,•� Harnett fl COUNTY NORTH CAROLINA strong roots • new growth Health Insurance The Board will receive a presentation from John Gasiorowski with Independent Benefit Advisors (IBA) on May 7 strong roots • new growth 2 Harnett COUNTY NORTH CAROLINA 4/24/2018 Health Insurance • Proposing 3% increase for all health insurance tiers • Average increase since 2014-15: 14.3% • No increase proposed for dental or vision, or for voluntary benefits Harnett COUNTY NORTH CAROLINA strong roots • new growth Open Enrollment will begin May 7 Harnett County will have online open enrollment for the first time! strong roots • new growth 3 Harnett --)_� COUNTY l NORTH CAROLINA 4/24/2018 Benefits 401(k) *The County currently provides a match for employee contributions of up to 2%. Thin k about tojncvrro today_ 14 We propose the County contribute 2% for all employees, regardless of theft contribution. ,,--� Harnett 'in COUNTY l NORTH CAROLINA strong roots • new growth OPEB (Other Post Employment Benefits) • As of FYE 2017, the County reported $16,153,795 in post employment liability - General Fund Employees $13,711,621 - Law Enforcement Officers $ 2,442,174 • Irrevocable Trust Agreement ▪ Establish funding mechanism • Detailed Handout strong roots • new growth 4 Harnett h( -Th COUNTY b.ROLINA 4/24/2018 New Budget Impacts • Medical Examiner — use of County personnel • Capital Funding Formula for Schools (handout) • Funding for Fire/EMS Squads Harnett --In COUNTY NORTH CAROLINA strong roots • new growth On the Horizon... • Library consolidation (presentation at May 1 work session) • Central Carolina Community College — "Harnett Promise" • School Security • Sandhills — Intellectually & Developmentally Disabled • Library/Recreation needs • Schools — land purchase - Lottery Fund Balance as of 4/4/2018 = $2,305,576 • Additions? strong roots • new growth 5 Harnett County Other Post Employment Benefits (OPEB) Introduction: - -fig 6,06 WS Local Governments are required, on a periodic basis, to conduct actuarial studies of their total pension liability. This study takes into account inflation, salary increases and investment rates of return, as well as mortality tables that vary by age, gender, employee group (i.e. general, law enforcement officer) and health status (i.e. disabled and healthy). The ultimate goal of this study is to determine the County's annual OPEB cost (expense) based on the annual required contribution of the County (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities or funding excess over a period not to exceed thirty years. Background: Effective July 1, 2015, the Harnett County Board of Commissioners approved a revision to the County's Personnel Ordinance. This revision, which was effective for employees hired on or after of July 1, 2015, revised the insurance benefits policy for employees (ref. Harnett County Personnel Ordinance, Article VII, Section 1 Employee Benefits). The change adjusted the amount of minimum years of service the employee must have to be eligible for post-retirement benefits as well as the County's contribution. This was the first step in minimizing the County's long-term post employment liability. Over the past several years, the local governments have seen a surge in the amount of retirements, an increase in the cost of retiree benefits as well as retirees who are living longer. As a result, there is a growing concern that continued funding may not be available for employees as they reach retirement. In response, units of local government had the option to participate in the NC State Treasurer's OPEB fund or opt for a "pay as you go" funding mechanism. At the Spring Government Finance Officers' Conference, Dale Folwell NC State Treasurer, discussed the State's OPEB plan and highly encouraged units to participant and begin setting those funds aside. He also stated that units going out for debt would be asked to discuss their plan for funding their OPEB liability. By participating in the State's OPEB plan, units of local government will be allowed to participate in investments that are currently restricted by G.S. 159. For the fiscal year ended June, 2017, the County had OPEB liabilities in the amount of: General employees Annual Required contribution $ 2,358,772 Interest on net pension obligation 468,790 Adjustment to annual required contribution (447,841) Annual OPEB cost 2,379,721 Contributions made 387,869 Increase in net OPEB obligation 1,991,852 Net OPEB obligation, beginning of year 11,719,769 NET OPEB obligation, end of year $ 13,711,621 S:\Kimberly\Special Research\OPEB - New Requirement Overview 4/24/2018 Law Enforcement Beginning balance $ 2,409,096 Service cost 136,917 Interest on the total pension liability 83758 Changes of assumptions or other inputs (61,731) Benefit payments (125,866) Ending balance of the total pension liability $ 2,442,174 Proposed Solution: Establish a plan that will automate the setting aside of these funds on a monthly basis. Step 1: Approve a resolution. Local governments must approve a resolution stating the County's intent to establish an Irrevocable Trust Agreement with the State Treasurer's Office. Step 2: Establish a separate fund and identify a source of initial investment. There currently remains a balance of $218,894.01 in the Health Reimbursement/Health Savings Fund. This balance represents the funds set aside by the County to cover these options under a prior health insurance plan. It is proposed that this balance be used as the first step in an automated funding mechanism. Step 3: Establish a perpetual funding mechanism. A payroll benefit can be attached to each employee so that a benefit of $10 per employee, per month can be set aside in this separate fund. It is estimated that this benefit will generate an approximated amount of $107,076 annually. Step 4: Annual deposits. The State Treasurer allows units of local government to transfer funds to the trust account on a semi-annual basis. The minimum amount is $100,000. It is recommended that the County begin with the required minimum and monitor the fund's activity for additional contributions. As the trust continues to grow, through County contributions and expanded investment opportunities, post retirement payments to employees will be made from this fund. Until such time, as the County determines, those payment will continue as "pay as you go". S:\Kimberly\Special Research\OPEB - New Requirement Overview 4/24/2018 Education Capital Funding Funding Formula Proposals Introduction: Lre g— i,(6 The County has an approved formula that calculates current expense funding but not capital. This formula is based upon the most recently known 2nd month average daily membership (ADM) count of students within the Harnett County Public School System, times the most recent known three-year average of approppriations per ADM for Harnett County as determined by the NC Department of Public Instruction. Background: The funding of capital and capital maintenance items for schools in the past was based on available funding. This method was inconsistent and was amended throughout the year. A funding formula would allow consistency and enable the schools to better plan the upcoming year . It would also eliminate unnecessary the "back and forth" required by staff and board members in addressing these types of items. The table below reflects prior years' activity . Adjusted Fiscal Year Fund Original Budget Budget Activity 2013 110 $ - $ - $ - 2014 110 - - - 2015 110 308* - 1,300,000 - 1,300,000 - 278,389 2016 110 3.08* 255,707 - 280,707 - 280,707 1,039,787 2017 110 229** 308* - 972,126 - 750,000 122,625 972,126 - 122,625 929,737 9,334 2018 110 1,884, 630 1,112,106 Fiscal Years 2015 - 2017 Avg Original Avg. Adjusted Budget Budget Average Activity 421,306 $ 445,910 $ 443,430 * CP1501 School Projects (Article 46). When the local option sales tax was approved by the voters, the schools requested that they be allowed to use $1.3 million for maintenance and repairs in various schools. This project was approved on 1/14/2015 and the final funds were spent on 9/21/2016. ** Fund 229 represents the sales tax expansion funds ($3,800,000) that are restricted for Education, Community College and Economic Development uses. On July 1, 2017, the schools were allocated $972,126 for capital and maintenance needs. At the end of the year, $42,389 of the allocation remained unspent and was reappropriated for use in this fiscal year. S:\Budget\FY 2018 - 2019\Education - Capital Funding Formula Proposal 4/24/2018 Proposed Solution: Establish a tunding tormula based upon a percentage of the prior tiscal years net Article 39 (General Fund) sales tax collections. By using the net sales tax, the funding will remain more consistent than in prior years and should enable the schools to better plan for these items. Note: The Sales Tax Expansion ($3.8 million) is not proposed for use in the capital funding formula. The portion of these funds that represent education will be used toward the current expense funding of the $1,500 teacher supplement. For FY 2018, this amount was projected at $2,199,000. Using the table below, the FY 2018-2019 capital appropriation to the schools would be $896,881. 2014 2015 2016 2017 Article 39 Sales Tax $ 5,469,096 $ 6,061,497 $ 6,993,302 $ 7,232,427 Less: City Hold Harmless (847,576) (932,445) (993,361) (1,075,170) Schools Hold Harmless (1,398,432) (1,549,804) (1,568,663) (1,672,850) Article 39, net $ 3,223,088 $ 3,579,248 $ 4,431,278 $ 4,484,407 Allocation Based upon selected percentage 15% $ 483,463.20 $ 536,887.20 $ 664,691.70 $ 672,661.05 I 20% * $ 644,617.60 $ 715,849.60 $ 886,255.60 $ 896,881.40 I 21% 22% 23% 24% 25% 676,848.48 $ 709,079.36 $ 741,310.24 $ 773,541.12 $ 805,772.00 $ 751,642.08 787,434.56 823,227.04 859,019.52 894,812.00 $ 930,568.38 $ 941,725.47 $ 974,881.16 $ 986,569.54 $ 1,019,193.94 $ 1,031,413.61 $ 1,063,506.72 $ 1,076,257.68 $ 1,107,819.50 $ 1,121,101.75 * At the budget work session on February 27, 2018 the Board expressed an interest in setting the funding percentage at 20% S:\Budget\FY 2018 - 2019\Education - Capital Funding Formula Proposal 4/24/2018 saainaas Aauaalaw3 Ja31410 aDJnosaa looyDs 0 M 0 S S y 00) S( 6, (D n CCl d N 0 'ca ,o '' (D c m °y -, vii cr, E. 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W N N I lD N O I-+ 00 O O O O 00 O O A 0 0 0 No O 00 0 0 ti* N A A J Ln N N O O J J O O 0 0 0 0 O O O 0 tR N )L H N r I- r F - o O O O O O O O o O O O O O O O o 0 0 6.0666 o 0 0 0 0 0 0 :sanuanab T co a. m fl C 00 O Q 00 papuawwoDaa aaai;}O 1a2pne 0 D) 610Z - 810Z Ad T rn m N 0 lD saan;ipuadx3 'e;ol alse\ Nos to O O 0 0 0 0 o :;uawpedea T CO Q_C m CN 00 a O a 00 0 fD fD .fl � C m 3 papuawwoaaa Jaawo lapns 6102-810? AJ -n m 0 r 121Od32i A2iVWWf1S 13Dan N Ps 0 00 PROJECT Additional Personnel Cost for School Deputy PREPARED BY: Sheriff Wayne Coats Budget Proposal Additional School Deputies Hamett County 175 Bain Street 1 P.O. Box 399 i Lillington, NC 27546 Sheriffs Office 910-893-9111 QUANTITY DESCRIPTION Monthly Cost Sheriff's Office School Board 1 Deputy Sergeant (Entry Level Position) Salary with $6,653.11 $13,306.22 $66,531.10 Bennefits 1 Deputy 111 (Mid -Point Position) Salary with Bennefits 55,645.16 $11,290.32 556,451.60 1 Deputy III (Mid -Point Position) Salary with Bennefits $5,645.16 $11,290.32 556,451.60 1 Deputy III (Mid -Point Position) Salary with Bennefits 55,645.16 511,290.32 556,451.60 4 Equipment Costs for Full Time Deputy (Start-up) $44,700.00 $178,800.00 5 Part-time Field Training (240 Hours) at $20.00 hr 54,800.00 524,000.00 5 Part-time Inservice Training (60 Hours) at $20.00 hr $1,200.00 $6,000.00 5 Equipment Costs for Part-time Deputy (start-up) 58,830.00 $44,150.00 THIS PROPOSAL INCLUDES THE CONDITIONS NOTED. Proposal written for four (4) full time deputies and five part-time deputies. Figues are based on 10 months cost for School and 2 month cost for Sheriff for deputy salary. This equates to the School covering 83% of the deputy salary. Equipment costs for part-time deputies doesn't include equipment for the following items: patrol vehicle, computer, camera, vehicle radio, lockout kit, first aid kit, crime scene tape and road cones. Wayne Coats Harnett County Sheriff SUBTOTAL 5300,127.18 $235,885.90 TOTAL COST 5536,013.08 Unit Harnett County Fire & Rescue Fiscal Year 2017 Cash & Cash Equivalents Anderson Creek Angier & Black River _Benhaven - Boone Trail Buies Creek - Coats -Grove Crains Creek* Cypress Dunn Erwin Flat Branch Godwin 4 Northwest Spout Springs Summerville Westarea $ 720,276 638,808 945,602 283,044 285,969 276,906 59,199 216,962 771,556 240,640 159,037 171,412 510,308 772,656 471,382 554,654 Less: Current Liabilities $ 1,742 657 217,416 103,531 103,817 131,188 35,128 179,479 153,185 99,029 52,063 28,964 151,926 163,687 20,246 136,512 Operating Expenditures $ 1,746,524 625,064 517,948 764,139 962,075 729,820 317,385 850,886 2,467,748 1,004,167 503,076 441,222 439,060 1,467,063 478,292 1,188,548 y--a4-IS 1-(G 61,)°,5 Fund Balance % 41.14% 102.09% 140.59% 23.49% 18.93% 19.97% 7.58% 4.41% 25.06% 14.10% 21.26% 32.28% 81.62% 41.51% 94.32% 35.18% S:\Budget\FY 2018 - 2019\Fire & Rescue Cash FYE 2017 4/24/2018