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05152012225 MINUTES CITY OF DUNN DUNN, NORTH CAROLINA The City Council of the City of Dunn held a Special Call Meeting/Budget Work Session on Tuesday, May 15, 2012, at 8:30 a.m. in the Dunn Municipal Building. Present was Mayor Oscar N. Harris, Mayor Pro Tern N. Carnell Robinson, Council Members Buddy Maness, Bryan Galbreath, Billy Tart, Chuck Turnage and Billy Barfield. Also present was City Manager Ronnie Autry, Assistant City Manager Steven Neuschafer, Finance Director Mark Stephens, Chief Building Inspector Mike Blackmon, Recreation Director Perry Hudson, Police Chief B.P. Jones, Public Works Director Billy Addison, Public Utilities Director Dean Gaster, Human Resources Director Anne Thompson, Librarian Mike Williams, City Attorney P. Tilghman Pope, City Clerk Debra West and Daily Record Reporter Brian Haney. INVOCATION Mayor Harris opened the meeting at 8:30 a.m. Mayor Pro Tern Robinson gave the invocation. Afterwards the Pledge of Allegiance was repeated. AGENDA ADJUSTMENT AND APPROVAL Motion by Mayor Pro Tern Robinson and seconded by Council Member Maness to adopt the May 15, 2012 meeting agenda with changes, if any, as listed below. Items Added to the Agenda: • Authorization to Accept NC Building Restoration and Reuse Grant from the Rural Center — "The McKay House" —100 E. Divine Street Agenda Items Removed • none Motion unanimously approved. ITEMS FOR DISCUSSIONAND /OR DECISION Authorization to Accept NC Building Restoration and Reuse Grant from the Rural Center — "The McKay House" —100 E. Divine Street Motion by Council Member Billy Tart and seconded by Council Member Tumage to accept the NC Building Restoration and Reuse Grant from the Rural Center — "The McKay House" — 100 E. Divine Street. Manager Autry explained that at the February 7, 2012 Council meeting, the Council approved a resolution to authorize the Mayor to file an application on behalf of the City of Dunn with the Rural Center for a Building Restoration and Reuse Grant to assist in the productive reuse of a vacant building known as "The McKay House" and owned by Mr. & Mrs. John Mercer. This grant, in the amount of $32,000, will finish the restoration of this 4,969 sq. ft. unoccupied historic property to commercial use income producing. Upon completion, the building will create a minimum of four (4) new jobs through a business called Breezeway Cafe. Total project cost is $66,000. Funding sources for this project include $2,000 from the City of Dunn, $32,000 from Mr. and Mrs. Mercer and the Committee of 100 and $32,000 from the NC Rural Center. Mr. Autry stated that Mr. Mercer is aware that he will have to expend his personal money first. Motion unanimously approved. A copy of the Rural Center Agreement for a Building Reuse and Restoration Grant for the project described as "The John A. McKay House" is incorporated into these minutes as Attachment #1. Status Report for Current Budget Year (FY 2011 -12) Finance Director Mark Stephens gave the following status report for the current budget year (FY 2011 -12): Expenditures are in -line even with rising fuel prices. • Sales Tax increased by approximately $50,000 over last year. Building Permit Fees are down by approximately $30,000 due to lack of growth with the present state of the economy. • Contributions from the ABC Board are down by approximately $30,000 compared to same time last year. • Rental Housing Fees were not collected due to the change in state law. Utility Franchise Tax is down due to a mild winter. • The City is in the same approximate financial position as last year. • Surplus should be seen in the Water & Sewer Fund. • Surplus is anticipated in the General Fund. • Fund Balance for FY 2010 -11 was $28,000 and FY 2009 -10 was $120,000. 226 Synopsis of FY 2012 -2013 Budget Manager Autry provided the following highlights of the proposed FY 2012 -13 Budget: FY 2011 -12 General Fund Budget was $8,990,400 FY 2012 -13 General Fund Budget is proposed at $9,050,000 —Increase of only $59,6001less than 1 % Significant adjustments to revenue accounts are: Garbage charge increase for fuel adjustment • Privilege Licenses — Modification to Electronic Gaming Operations Fee Schedule Sales Tax — 2% increase Decrease in revenue accounts resulted from: • No Rental Housing fees • $25,000 from Safe Routes Grant Cemetery Lot sales down Building Permit fees down Expense Adjustments are: • Police fuel: Increase from $115,000 to $143,000 • Public Works: Yard Debris Cart proposed: Adjustment to cover cost for Debris Cart was to reduce: Landfill tipping fees - $25,000 Fuel- $18,000 Maintenance - $7,000 Part-time Labor - $14,000 FY 2011 -12 Enterprise Fund Budget was $4,631,500 FY 2012 -13 Enterprise Fund Budget is proposed at $5,000,000 — Increase of $368,500 Significant Adjustments to revenue accounts are: • Water charges based on increase in sales to Eastover Sanitary District • Debt payment from Eastover Sanitary District • Sewer charges based on increase in outside City rates Significant Adjustments to expense accounts resulted from: • W WTP Improvements debt service - $332,000 Eastover Sanitary District Water Line debt service - $395,800 Average residential tax bill is $564.51 Based on 3,281 homes and a total residential value of $385,865,304 Discussion was held about implementing the yard debris cart in September. Discussion was held about the pros and cons of implementing this cart. FY 12 -13 Budget Mayor Harris yielded to Manager Autry to summarize the budget Revenues: General • Ad Valorem Taxes: Figure is based on an approximate tax base of $695,000,000 with the tax rate of .48 per $100 valuation at a 98.50% collection rate which is with zero growth. • The majority of the state revenues have been projected to remain as is or with a slight increase than this year's budget. A 2% increase in sales tax has been proposed which is less than the 3% recommended by the NCLM. • Fund balance has not been appropriated to balance the budget. • An increase of $1.50 per month for garbage fees due to fuel increases. Manager Autry asked that this increase be amended to $2.00 per month. The last increase in garbage rates was in FY 08 -09 (from $11.00 to $12.00). • Privilege license fee for Electronic Gaming Operations is proposed at $1,000 for basic privilege license plus $1,000 per machine. This proposed fee will put the City in -line with other municipalities. Revenues: Water • Proposed out of town sewer rates to increase from $3.16 per 1,000 gallons to $6.32 per 1,000 gallons. • Fund balance was not required to balance the budget. • Revenues from the Eastover Sanitary District have been appropriated. Expenditures: General • General Fund operation is comparable to the FY 11 -12 budget with the exception of a significant increase to various departments' fuel line items. • Retirement contribution for state retirement decreased to 6.74% from 7 %. • All debt service requirements have been appropriated in this budget to meet our debt obligations. • Health insurance cost remained the same. 227 • Capital items have been addressed and a list of items proposed for funding is as follows: Police cars $125,000 Public Works -Mower for Cemetery $ 6,000 Public Works - N. Clinton Sidewalk Project $ 140,000 (Grant from NCDOT) $271,000.00 • Contingency of $50,000 was budgeted for shortfalls of fuel costs or emergencies. • Line items have been adjusted to accommodate for the initiation of the yard debris cart. • 3.5% COLA increase for employees. Expenditures: Water • Capital items have been addressed and a list of items proposed for funding is as follows: Water Operations: Backhoe, pumps and tapping equipment $125,000 Water Plant: Installation of valves on finish pump $ 28,000 Wastewater Plant: Relocation of generator and shelter over chlorine container $ 36,200 Wastewater Plant Lift Stations: Rebuild pumps at Food Lion Station $ 16,000 $205,200.0 • All debt service requirements have been obligated in the FY 2012 -13 budget to meet our debt responsibilities, which included a new debt of $395,000 for the Eastover Water Line Project. • $10,000.00 has been placed in a contingency line item for shortfalls in fuel cost. • Retirement contribution appropriated for as explained above. • Health insurance cost remained the same. • 3.5% COLA increase for employees. Discussion was held about increasing the COLA amount proposed for the employees. Manager Autry stated that one option would be to see how much fund balance would remain for next year for another possible COLA increase. Mayor Pro Tern Robinson provided a second option of implementing a small tax increase to accomplish a larger COLA. Discussion was held about the current tax rate of Dunn in comparison to surrounding municipalities. Discussion was held about the need to repair or replace the picnic shelter at Codrington Park Manager Autry stated that there will be monies placed in the Recreation Department account to accomplish the repair /replacement of the picnic shelter. Manager Autry provided the Council with a summarization of the debt service schedule. Proposed Fee Schedule for FY 12 -13 The proposed fee schedule was presented to the Council and discussion was held about various fees. Discussion was held about the requirements and guidelines which are written in the City Code that an itinerant merchant must follow whenever they sell items in town. Discussion was held about property owners who are delinquent in paying the City for mowing vacant lots. ✓ City Attorney Pope stated that he trained staff in the Finance Department to file for delinquent weedy lot bills in small claims court to hold down attorney fees; however, to serve an out of state property owner, it would cost more in attorney fees than the fee to collect. Discussion was held about the possibility to file suit to collect from a property owner, once an accumulative amount has accrued- City Attorney Pope suggested that Inspector Blackmon and Finance Director Stephens provide the Council a current list of property owners who owe for unpaid weeded lot fees, and the amount each owes in uncollected fees. The Council can then direct staff or Attorney Pope of a threshold amount before pursuing legal action to collect. Discussion was held to increase the weedy lot fees so that it becomes cost - efficient more quickly in order to collect the fees. O Motion by Council Member Maness and seconded by Council Member Barfield to direct Inspector Blackmon and Finance Director Stephens to provide the Council a current list of outstanding uncollected fees for weeded lots mowed and to bring back a fee recommendation to mow lots. Motion unanimously approved. Mayor Harris summarized the highlights of the proposed FY 2012 -13 budget This budget does not increase property taxes. This budget includes a $2.00 monthly rate increase for garbage collection • This budget includes a 3.5% COLA for employees • The General Fund includes a contingency fund of $50,000 • The Water and Sewer Fund includes a contingency fund of $10,000 Motion by Council Member Turnage and seconded by Council Member Maness to direct the staff to proceed in the final preparation of the FY 2012 -13 budget as directed by the Council. Motion unanimously approved. Motion by Council Member Barfield and seconded by Council Member Galbreath to direct staff to proceed with implementing the proposed FY 2012 -13 fee schedule with the budget document for public display by June I' and call for a public hearing at the June 12'h City Council meeting. Motion unanimously approved. With no further business to discuss, a motion was made by Council Member Barfield and seconded by Council Member Billy Tart to adjourn the meeting at 10:40 am. Motion unanimously approved. Attest: / , I . W40�1& Debra G. West City Clerk CORPO9 �. 9'A :Z- =z: m: 9 sFq L Ty •.. CgROL \\NP n n n 0"` %N =V&,J