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05232013dr, MINUTES CITY OF DUNN DUNN, NORTH CAROLINA The City Council of the City of Dunn held a Special Call Meeting/Budget Work Session on Thursday, May 23, 2013, at 8:30 a.m. in the Dunn Municipal Building. Present was Mayor Oscar N. Harris, Mayor Pro Tem Bryan Galbreath, Council Members Buddy Maness, Caruell Robinson, Billy Tart and Billy Barfield. Also present was City Manager Ronnie Autry, Assistant City Manager Steven Neuschafer, Finance Director Mark Stephens, Chief Building Inspector Mike Blackmon, Planning Director Samantha Wullenwaber, Recreation Director Perry Hudson, Interim Police Chief Jimmy Pope, Public Works Director Billy Addison, Public Utilities Director Dean Gaster, Human Resources Director Anne Thompson, Librarian Mike Williams, City Attorney P. Tilghman Pope and City Clerk Debra West. Absent: Council Member Chuck Turnage. INVOCATION Mayor Harris opened the meeting at 8:30 am and gave the invocation. Afterwards the Pledge of Allegiance was repeated. AGENDA ADJUSTMENT AND APPROVAL Motion by Mayor Pro Tern Galbreath and seconded by Council Member Robinson to adopt the May 23, 2013 meeting agenda with changes, if any, as listed below. Items Added to the Agenda: • none Agenda Items Removed: • none Motion unanimously approved. *Mayor Harris stated that the Council will recess from 11:30 am until l: 30 pm. ITEMS FOR DISCUSSION AND /OR DECISION Status Report for Current Budget Year (FY 2012 -13) Finance Director Mark Stephens gave the following status report for the current budget year (FY 2012 -13): • Revenues are in -line noting the biggest increase being the privilege licenses for internet cafes. With new legislature, $164,000 in revenue for internet cafes will be lost with the proposed FY 13- 14 budget. • Sales Tax trending upwards over last year. • Building Permit Fees are above projections. • Expenditures for HRA (Health Reimbursement Account) were higher than projected. Two major claims affected health insurance quotes for FY 13 -14. • Water and sewer revenues are lower than projected due to the delay in Eastover being on -line to purchase water and due to a wet cool spring. Discussion was held about changing the bulk water rate charge for users that do not have a minimum gallon per day usage requirement specified in their contract. • Sewer revenues are in -line. • $200,000 was pulled from water fund balance earlier in the FY 12 -13 budget to pay for an unexpected expense to replace a clarifier. • Fund balance is expected in the FY 2012 -13 Budget and as a result, Manager Autry and Finance Director Stephens recommended to pay off General Fund debt service for the Highway 421 widening project which would release $66,500 for FY 13 -14 and $64,020 for FY 14 -15 and to also pay for a current project (Codrington Park shelter and bathrooms) at $30,000 within the FY 12 -13 budget. This would equate to reducing FY 13 -14 debt by $96,500. Even with reducing the debt by $96,500, there will still be a fund balance in the current FY 12 -13 budget. FY 2013 -2014 Budget Manager Autry stated that he and Finance Director Stephens can offer variables to the proposed budget: Proposed to pay off the following debt service budgeted for FY 13 -14 as explained above. General Fund — completely pay off Highway 421 debt service — would release $66,500 for FY 13 -14 and $64,020 for FY 14 -15 Pay -off a current project (Codrington Park shelter and bathrooms) at $30,000 within the FY 12 -13 budget TOTAL of $96,500 would be put back in the proposed FY 13 -14 budget if this recommendation is approved. Discussion was held about the need to provide security cameras at the (3) City parks. Discussion was held about creating a Master Plan to renovate Codrington Park and the possibility of publieprivate partnerships to enhance this park especially in relation to the proposed senior apartment project on the Harnett High Campus. It was discussed to let the Recreation Commission begin the process of discussing a Master Plan and bringforth recommendations. 317 Mayor Harris summarized the following issues within the FY 13 -14 Budget: Loss of $164,000 in revenue in electronic gaming privilege license fees Minimal increase in sales tax Water and sewer revenues down Elevated health care expenses Mayor Harris reminded the Council that subject to their approval, a budget amendment to pay off the Codrington Park shelter/bathroom project and the Highway 421 debt service will be proposed at the June Council meeting to lower the debt in FY 13 -14. Council Member Maness mentioned legislature changes that could have a serious impact on the City. Manager Autry explained that any of those changes would be critical in the FY 14 -15 budget year. Mayor Harris yielded to Manager Autry to summarize the budget. Revenues: General • Ad Valorem Taxes: Figure is based on an approximate tax base of $698,000,000 with the tax rate of .50 per $100 valuation at a 98.60% collection rate. A 2 cent tax increase is proposed to offset the loss of Electronic Gaming Operations privilege license fees totaling $164,000, an addition of one full -time maintenance employee for the Recreation Department and overlapping debt for three years. Discussion was held if a 2 cent tax increase is sufficient. • The majority of the state revenues have been projected to remain as is or with a slight increase than this year's budget. A 2.2% 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. Expenditures: General • General Fund operation is comparable to the FY 12 -13 budget. • Retirement contribution for state retirement increased to 6.74% to 7.07 %. • New law requires 1% of salaries to be set aside for unemployment costs in addition to normal annual cost. All debt service requirements have been appropriated in this budget to meet our debt obligations. Health insurance cost increased by 15 %; however, the present carrier proposed a 35% increase. Other carriers would not quote the City because of a 400% loss ratio. The broker is now working on a quote and as of present, the quote is at 18% increase which equates to an increase of $83,000 to $99,000. The broker is trying to reduce the increase to 15 %. Discussion was held about offering post 65 retirees a comparable supplement that would be a reduction in cost to the City. Discussion was held to bring back to the Council some alternatives to cost savings for post 65 retirees and to standardize everyone's plan to be equitable for all post 65 retirees. • Capital items have been addressed and a list of items proposed for funding is as follows: Police cars Public Works -Mower for Cemetery Public Works - N. Clinton Sidewalk Project (Grant from NCDOT) $160,000 ($28,000 USDA Grant) $ 6,000 $ 140,000 i 1. 111 11 Contingency of $43,000 was budgeted for emergencies or budget short falls. 1.5% COLA increase for employees. Council Member Robinson recommended a straight across the board bonus equal for everyone. Council Member Maness stated that it is more equitable to give a bonus based on years of service. Mayor Harris stated that with a bonus, this affects long- time employees' retirement. A proposed salary bonus will be proposed instead of a COLA increase. Discussion was held that a 2 cent tax increase may not be sufficient to cover impending cost increases Council Member Robinson mentioned the need for additional police manpower. Mayor Pro Tem Galbreath suggested the addition of two (2) police officers over the next two (2) fiscal years for a total of four (4) new officers. Mayor Harris explained they are transitioning to a new chief and in the process of converting PAL to a non- profit. At this point, two additional officers may not be sufficient. Mayor Pro Tem Galbreath stated that the Council needs to hear from Interim Chief Pope Manager Autry explained that in comparing to other towns, the police department is comparable however other departments such as Public Works are under - staffed in comparison to like -size towns. He questioned how to best obtain additional police protection — hire additional officers or pay overtime for the current officers to come back in. Another option discussed was to hire part-time officers. Interim Chief Pope explained that most officers do not want to come back in on the weekends and he suggested two (2) additional officers to split. Council Member Maness questioned if the County could transport to Lillington instead of using City officers. Interim Chief Pope responded that the actual officer must testify in front of the Magistrate which 318 is located in Lillington now. Interim Chief Pope stated that staffing is the same as in the 80's. Council Member Maness suggested schedules be adjusted to meet demand. Council Member Robinson and Mayor Pro Tern Galbreath stated that the Police department responds to populations above the current City population when you factor in commercial businesses and restaurants patronized by outside populations. Mayor Harris suggested that a study be completed to determine additional staff needed in the Police department. Mayor Harris suggested that the $96,500 in excess additional monies be placed in over -time for the Police department, part -time and full -time staff for Recreation department, security cameras for City parks and resurfacing residential streets. Mayor Pro Tem Galbreath asked Recreation Director Hudson for a summary of daily duties performed by his staff: Mr. Hudson responded: Maintenance Staff - two (2) full -time maintenance employees and one (1) temporary part-time employee — maintain community building, cut grass at three (3) parks, weed -eat, prepare ball fields and clean control tower. Management and administrative staff consist of three (3) employees including the Recreation Director, Athletic Director and Administrative Assistant. Recreation Center — two (2) full -time and two (2) part -time employees dedicated to the Dr. P.K. Vyas Recreation Center. Council Member Robinson asked Mr. Hudson if his department has the capacity to maintain Codrington Park. Mr. Hudson responded monies are in the PAL budget and a lift chair must be in place before the pool at Codrington Park can be opened. Council Member Robinson questioned why the chair has not been ordered. Manager Autry stated that a lift chair will be ordered. Mayor Harris asked Recreation Director Hudson how many additional maintenance staff will be needed. Mr. Hudson responded one (1) additional full -time employee for maintenance and two (2) seasonal maintenance employees from March to August. Council Member Robinson asked if there are any major maintenance issues with City-owned buildings to consider. Manager Autry responded only carpet replacement for City Hall is needed at this point. Assistant Manager Neuschafer responded that Inspector Blackmon provided an initial inspection previously to the Council but there are several major items that need to be repaired including the carpet at the Library, repair shingles on a roof at the park and safety inspection issues. Mayor Pro Tern Galbreath stated that an annual inspection needs to be completed and delivered to the department affected. Inspector Blackmon mentioned that safety inspections are performed monthly and it was suggested that the Building Inspector accompany the safety committee each month to note any structural issues at the same time safety issues are noted. Inspector Blackmon stated that the only structural issues he is aware of involve Codrington Park picnic shelter and bathrooms. Manager Autry informed the Council that Chief Inspector Blackmon is retiring effective July 1, 2013 and the City is offering him part-time employment two days each week to address code enforcement and to fill in for Inspector Steven King when on vacation and at school. He advised there is one (1) current Public Works employee who is schooled in inspections and will be utilized to help in the Inspections department. Council recessed at 11:15 am and reconvened at 1:30 pm. Revenues: Water /Sewer • Water rates are proposed not to increase. Proposed inside city sewer rate increases from $3.16 per 1,000 gallons to $3.46 per 1,000 gallons and outside city limit sewer rate from $6.32 per 1,000 gallons to $6.92 per 1,000 gallons. The base rate on sewer will remain the same. This equals a 3.14% increase on the average 5,000 gallon a month customer. Manager Autry provided the Council with a summary of charges which equates to a .60 cent monthly increase for an average user. Fund balance was not required to balance the budget. Mayor Harris suggested the fee schedule be amended to reflect different charges for bulk water users depending if there is a minimum consumption clause in their respective contract with the City of Dunn. Expenditures: Water • Capital items have been addressed and a list of items proposed for funding is as follows: Water Plant Pickup Truck $ 20,000 Walkaway Railing Kick Plates $ 5,000 Wastewater Plant: Clarifier Rebuild $115,000 Walkaway Railing Kick Plates $ 15,000 Wastewater Plant Lift Stations: Grove Park Lift Station Upgrade $ 5,000 $160,000.0 319 • All debt service requirements have been obligated in the FY 2013 -14 Budget to meet our debt responsibilities. • $63,800.00 has been placed in a contingency line item for emergencies or budget shortfalls. • Retirement contribution appropriated for as explained above. • Health insurance cost increased by 15 %. • 1.5% COLA increase for employees. Manager Autry pointed out that in addition to $100,000 allocated in the "infiltration" line item, $100,000 has been allocated in a new line item account "water line upgrade" to provide for the repair to the water /sewer lines at Pope and Clinton —Bay and Clinton. Discussion was held that the City is in the process of implementing a GPS system to identify water and sewer lines through -out the City. Additional discussion was held about the bulk water rates and it was suggested that it be increased for those users that do not have a minimum gallon per day usage specified in their contract. Manager Autry suggested having negotiations with current bulk water users to advise them if they do not agree to a minimum bulk use within their contract, then their bulk rate will increase. The Council instructed Manager Autry to negotiate with non - minimum bulk water users that their rate will be increased to $2.15 for bulk usage not under minimum contract. Manager Autry suggested that when the FY 13 -14 fee schedule is adopted, that this increase in bulk water rate be effective November 1, 2013. Mayor Harris suggested that Manager Autry prepare the changes as proposed and distribute them to the Council. Manager Autry stated that he will address the following issues within the proposed budget: Police — Additional staff or overtime Recreation — Additional staffmg Cameras at all City parks Health Insurance Rates for Post 65 retirees Paving residential streets Use the 2 cents tax increase to reflect the short-fall Proposed Fee Schedule for FY 13 -14 The proposed fee schedule was presented to the Council and discussion was held about various fees. Discussion was held previously as it relates to bulk water rates. ETJ Manager Autry stated that Council Member Barfield requested that he contact David Owens with the School of Government as it relates to extending the EJT and Mr. Owens advised that the ETJ can be extended. With the City of Dunn population, it can be extended one (1) mile from the City limits. He provided a map to the Council designating the boundaries. It would involve advertising to let affected residents know their property would be brought into the ETJ, boundary surveys, description of properties, asking the County to release the particular area to the City, and the City would take over inspections/planning for that area. This may send a signal to those folks that the City intends to annex their property. At the current time, there would be a cost to the City without benefit since the main territory along Fairground Road is already developed. Planning Director Wullenwaber advised that there is a bill before the legislature being considered which could eliminate the ETJ. Council discussed the advantages and disadvantages to extending the ETJ. The County is already fully zoned. With no further business to discuss, a motion was made by Council Member Barfield and seconded by Council Member Robinson to adjourn the meeting at 2:40 pm. Motion unanimously approved. Attest: IYO l ilk Debra G. West City Clerk `"gin uu4, .GORPOR4r�\, y =_ �. '• `SEAI- '.C9 Ty Cr "ERG •` I /,111111 \,♦ &M441- 44A� ostfir N. Hams Mayor