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06112013320 MINUTES CITY OF DUNN DUNN, NORTH CAROLINA The City Council of the City of Dunn held a Regular Meeting on Tuesday, June 11, 2013, at 7:00 p.m. in the Dunn Municipal Building. Present was Mayor Pro Tem Bryan Galbreath, Council Members Buddy Maness, N. Carnell Robinson, Billy Tart, Chuck Turnage and Billy Barfield. Also present was City Manager Ronnie Autry, Assistant City Manager Steven Neuschafer, Finance Director Mark Stephens, Public Works Director Billy Addison, Public Utilities Director Dean Gaster, Chief Building Inspector Mike Blackmon, Planning Director Samantha Wullenwaber, Interim Police Chief Jimmy Pope, Human Resources Director Anne Thompson, Librarian Mike Williams, City Attorney P. Tilghman Pope and City Clerk Debra West. Absent: Mayor Harris INVOCATION Mayor Pro Tem Galbreath opened the meeting at 7:00 p.m. and asked Council Member Tumage to give the invocation. Afterwards, the Pledge of Allegiance was repeated. Council Member Maness provided an update on the condition of Mayor Harris. While bicycling, Mayor Harris took a fall and suffered a broken collar bone and ribs and is very disappointed he cannot attend tonight's budget meeting and will not be able to participate in the All- America City delegation traveling to Denver, Colorado. Mayor Pro Tem Galbreath recognized former Mayors Abe Elmore and Dal Snipes in the audience. AGENDA ADJUSTMENT AND APPROVAL Motion by Council Member Robinson and seconded by Council Member Maness to adopt the June 11, 2013 meeting agenda with changes, if any, as listed below. Items Added to the Agenda: • Consideration to adopt a Resolution in Support of Hospitals and Healthcare Funding Agenda Items Removed: • none Motion unanimously approved. PUBLIC COMMENT PERIOD Mayor Pro Tem Galbreath opened the floor for a (30) minute public comment period. Former Mayor Dal Snipes, 905 W. Pope Street spoke on behalf of the Downtown Dunn Development Corporation (DDDC) as it relates to the sunset provision on tonight's agenda. Currently this tax brings in $32,000- $35,000 each year and to date the DDDC has invested $100,000 back into the recently completed Downtown Revitalization Project to pay for festival lighting. DDDC contributed back to the taxpayers, $75,000 in facade grants. To date $150,000 has been pledged in private funds to complete the Downtown streetscape with decorative benches, trees and trash receptacles. Two years ago, the DDDC obligated 85% of their tax revenue or $35,000, whichever is greater, to help the City of Dunn pay the debt service on the Downtown Revitalization Project over the next twenty-five (25) years. Mr. Cary Barfield, 600 S. Layton Avenue stated that he also owns several properties within the Municipal Service District (MSD) and currently pays an additional .12 cents per $100 valuation. With the additional .02 cents tax increase proposed tonight, it will be tough for those residents who reside within the MSD. He spoke against abolishing the sunset clause. He stated we will need some help, times are tough. He talked to Ms. Frances Jones and she gave him permission to use her name. He stated that she has a comer lot with a large home and she can hardly pay her taxes; adding we need some help. His understanding was this tax would end June 30, 2013. He asked that the Council not abolish the sunset clause. Mr. Willie Suggs, 713 W. Moms Circle, stated that he appreciates what this Council has been doing for the community and the successful Downtown project aesthetics. With this 3M dollar investment, over the next _ ten to twenty years, it could possibly multiply by seven times. If they continue to run the agenda properly with rules and regulations, this could be very important for our community and for the future of Dunn. Downtown is the heart of Dunn and used an analogy that compared this to the body whereby the flow has to be right for everything to benefit from the heart and stated that he wants them to continue to work on the heart to keep it strong and clean. He spoke of the Downtown enhancements with safe sidewalks, level streets, underground power lines and stated that parking spaces are full and he asked that the parking situation be addressed by adding more spaces and obey the parking rules and regulations. If folks can't find parking, then they will not stop downtown and they will never get the seven times investment. The downtown project has been very rewarding to him and he personally thanked everyone for this successful project. Hearing no further comments, the public comment period was closed. 321 Mayor Pro Tem Galbreath opened Public Hearings at 7:27 pm PUBLIC HEARINGS Fiscal Year 2013 -2014 Budget Manager Autry stated that the Council held a Budget Work Session on May 23, 2013, met for approximately five (5) hours with lengthy discussion and recommendations were made by the Council to staff. From those recommendations, the budget was prepared and is before the Council tonight. Also the budget has been on display at City Hall for review and public notice was duly given for adoption of the budget. Manager Autry provided the following brief summary of the proposed budget: REVENUES: GENERAL • The tax base is proposed to increase by .02 cents from .48 per $100 valuation to .50 per $100 valuation and is to assist and offset revenues received last year in the amount of $164,000 for gaming operations privilege license fees. • The Council requested hiring two part-time maintenance staff employees for the Recreation Department to assist with the recent Tyler Park improvements. • Monies added in the over -time line item for police officers to work when other officers are on vacation instead of hiring additional full -time police staff. 2.2% increase in sales tax has been proposed. REVENUES: WATER • Propose inside City limit sewer rate increase 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 which equates to a 3.14% increase on the average 5,000 gallon a month customer and .60 per month increase for minimum usage by senior citizens. • Residential water rates will remain the same. Propose to adjust the bulk rate customers which do not have a minimum gallon per day allotment in their contract to increase from $1.90 per 1,000 gallons to $2.15 per 1,000 gallons effective November 1, 2013. EXPENDITURES: GENERAL • Retirement contribution for state retirement increased from 6.74% to 7.07 %. • New law requires 1% of salaries to be set aside for unemployment costs in addition to normal annual cost. • Health insurance cost increased by 15% plus. • Monies could not be found in this budget to resurface streets. A contingency of $70,500 was budgeted for emergencies or budget short falls and should these funds not be required, then they will be used for resurfacing in the spring of 2014. • Capital items consist of $160,000 for police cars ($28,000 USDA Grant), $6,000 for cemetery mower, $140,000 for N. Clinton sidewalk project and $30,000 for security cameras at the Parks. • Propose salary bonus versus COLA increase for employees. EXPENDITURES: WATER • Capital items consist of $20,000 for a pickup truck and $5,000 for walkway railing kick plates at the Water Plant, $115,000 to rebuild a clarifier and $15,000 for walkway railing kick plates at the Wastewater Plant and $5,000 to upgrade the Grove Park Lift Station. • $63,800.00 has been placed in a contingency line item for emergencies or budget shortfalls. The Public Hearing was duly advertised on May 28, 2013. Mayor Pro Tern Galbreath asked if there was anyone present who wished to speak for or against the proposed FY 2013 -2014 budget. Former Mayor Abe Elmore, 124 Fairfield Circle, stated that with the slow state of the economy, he feels the department heads and administration should have a second bare bones budget. Department heads have things they can get along without. As of today, he has not read of any surrounding community that increased their tax rate including Harnett County. He referred to an article he read from Sampson County that said last year they did more with less and this year they will do less with less. On June V, his family started their 59h year of business in Dunn. They have always had stores in the downtown area. He recommended that the Council direct the City Manager and Finance Director to go back and revisit this budget, to make cuts and to use fund balance to balance the budget. He stated that Mayor Harris has made comments on how well the City funds have grown; adding let's use some of that money. He suggested the Council wait to find out what legislature will be passed down from Raleigh before imposing a tax increase. He would like to see administration and all department heads live in the City Limits of Dunn and it would be great information to let the citizens of Dunn know how many of the 100+ city employees live in the City Limits of Dunn. In the last year, there were only ten to twelve new houses built in the City Limits of Dunn. If this Council imposes this tax rate, people will say they're not going to live in the City of Dunn. He asked that the Council not approve this budget and direct the Manager and Finance Director to modify the budget. He wished the City success when they travel to Denver, CO to compete for the All- America City award. Mr. Rick Lashmit, 715 Westbrook Avenue, stated that a .02 cents tax increase equates to 4% added to the tax rate. He added that with the last revaluation, values increased 24% and the tax base dropped from .52 to .48 at that time. Property owners downtown are paying an additional .12 per $100 valuation which 322 equates to a 36% increase since the last valuation. He stated that the loss of the electronic gaming operation fees should not be a factor in raising taxes. Federal, State, County and Local Governments want to grow but as citizens, they have to cut back on gas, groceries, vacations, etc. It is morally wrong to impose a 4% increase based on the loss of electronic gaming operation fees. The taxpayers are stressed and there are places that cut -backs can be found. It is morally wrong to put any additional taxes on property owners in the City of Dunn. If this Council votes for this .02 cents tax increase, when election time comes, people will look at the way this Council votes. He stated that he hopes this Council does what is right for the citizens of Dunn and the taxpayers. Mayor Pro Tem Galbreath closed the public hearing at 7:44 p.m Minutes — Council considered approval of minutes of the May 14, 2013 City Council meeting. Minutes - Council considered approval of minutes of the May 23, 2013 Special Call/Budget Work Session Budget Amendments — Council considered approval of Budget Amendments #10412. In referring to BA #12, Council Member Barfield stated that $56,000 in private funds was raised to fund the All- America City delegation to travel to Denver, CO for the All- America City competition. At the request of Council Member Robinson, Manager Autry explained that BA #11 is for an additional $15,000 to increase the budget for repairs to Codrington Park (roof and restrooms). Roof trusses have been ordered and he anticipates renovations to be completed in the next 30 -45 days. A copy of BA #10412 is incorporated into these minutes as Attachment V. Motion by Council Member Barfield and seconded by Council Member Tumage to approve all consent items. Motion unanimously approved. ITEMS FOR DECISION Adoption of Fiscal Year 2013 -2014 Budget Mayor Pro Tem Galbreath stated that the Budget Ordinance/Budget Document for FY 2013 -14 has been prepared and is before the Council for consideration. Motion by Council Member Robinson and seconded by Council Member Maness to adopt the Fiscal Year 2013 -2014 Budget. Mayor Pro Tem Galbreath asked if there were any comments from the Council. Council Member Barfield stated that comments have been made tonight by two citizens of Dunn and he agreed with their comments to direct the Manager and Finance Director to go back to modify this budget and use fund balance if possible. He cannot vote for the .02 cents tax increase with the fund balance on hand. Other surrounding communities are not increasing taxes. He stated that City employees will be given a 15% health insurance increase, COLA and the benefit of working from 7:30 — 4:00 pm; adding City employees are being given a lot. Council Member Robinson stated that this Council, Manager and department heads have done more with less over several years without a tax increase. This Council has been committed to make the opportunity for employment with the City of Dunn beneficial to the employees and citizens. He regrets they cannot do more for the employees who are suffering with hard economic times as well. Current revenue is used to pay current debt. This Council has absolutely no assurances of what will come from the legislature because of the prohibitions against annexation. They must maintain a level of public service to the citizens and they cannot operate the City on the same amount of money as they did five to ten years ago and anyone who would take issue with the reality of this Council needs to simply follow the kinds of things the Council went through during their budget work session. Not only did the Council talk about and evaluate cuts in service, they also talked about the possibility of staff reductions; could they maintain services to the citizens and cut staff. He commends the Council for having the foresight to look at the reality beyond the appearance of what goes on in this City. The Council cannot predict what's going to happen in the future and it would be absolutely ridiculous to start dipping into fund balance to pay for current expenses. Further discussion was held by Council Member Barfield as it relates to employee raises, health insurance increase for employees, electronic gaming fees, and not being in favor of the proposed budget. Council Member Robinson reminded Council Member Barfield that when they discussed the electronic gaming fees last year, he opposed it and in fact, he did not vote for last year's budget because of certain reasons which they do not need to go back through. Council Member Robinson called for the question. Motion carried 5 -1 with Council Member Barfield opposing. A copy of FY 13 -14 budget Ordinance (02013 -03) and fee schedule is incorporated into these minutes as Attachment #2. Consideration of Resolution to Award Bid — N. Clinton Avenue — 323 US 301 Sidewalk Project Assistant City Manager Steven Neuschafer stated that at a prior Council meeting, the Council voted to award this bid to Tyn -Co Services Inc.; however, Tyn -Co did not meet the DOT filing deadline to become pre - qualified. Mr. Neuschafer reported that sealed bids for the N. Clinton Avenue US 301 Sidewalk Project were received and opened on Friday, June 7, 2013 from the following contractors: Sandhills Contractors Inc. $ 89,715.10 Carolina Earth Movers Inc. $105,854.60 Tyn -Co Services Inc. $122,203.00 Narron Contracting Inc. non - responsive Jones Grading and Fencing non - responsive Staff recommends that the Council award the bid to Sandhills Contractors Inc. in the amount of $89,715.10; all bidders must be prequalified with NCDOT to perform the work. This project consists of construction of sidewalk with crosswalk improvements on US 301 (N. Clinton Avenue) from Edgerton Street to Granville Street. The project shall be complete by October 30, 2013. Cost to NCDOT shall not exceed $140,000 (construction only) and the cost to the City of Dunn is expected not to exceed $45,000 (engineering and miscellaneous expenses). Total projected cost is $185,000.00. Motion by Council Member Turnage and seconded by Council Member Maness to adopt the resolution awarding bid to Sandhills Contractors Inc. for the N. Clinton Avenue, US 301 Sidewalk Project contingent upon final approval from NCDOT. Motion unanimously approved. A copy of Resolution (R2013 -16) accepting the low bid from Sandhills Contractors Inc. is incorporated into these minutes as Attachment #3. Board Appointments Motion by Council Member Barfield and seconded by Council Member Robinson to postpone the Advisory Board Appointments. Motion unanimously approved. Request to Abolish Sunset Provision for Downtown Dunn Municipal Service District Tax Manager Autry stated that a formal request has been received from the Downtown Dunn Development Corporation requesting the Council abolish the seven (7) year Sunset Clause which was established in 2006 when the Downtown Dunn Municipal Tax District was created. This .12 tax is set to expire on June 30, 2013 unless the sunset provision is abolished. City Attomey Pope explained that when the issue came up about the original resolution that established the Downtown Tax District having a sunset clause, the idea of the sunset clause issue surfaced only at the night of the public hearing when the Council adopted the Downtown Tax District when some of the downtown property owners asked the Council to consider a sunset clause to see how the money was going to be used and whether or not it would be good to continue it; therefore, the resolution did contain the provision that it would sunset in seven (7) years which is June 30, 2013. Attorney Pope stated that when this issue arose, he along with the Finance Director contacted the Institute of Government (IOG) regarding the sunset provision and the IOG has determined that the City Council at the time, did not have the statutory authority to set the sunset provision and the sunset provision is therefore not valid and enforceable and the Municipal Tax District will continue until such time as the City Council abolishes it. Mr. Pope explained that since the public has always been aware for the past seven years that there was a sunset provision contained in the resolution, it was his recommendation to the City Manager, that it be placed on an agenda for this Council to be made aware of that so legally per the IOG, the NC Legislature did not give the City Council the legal authority to impose a sunset provision. The Council can either adopt a district, abolish a district or set a tax rate but again because it was in the original resolution that said it had a seven (7) year sunset provision for the benefit of the public and for the sake of clarity, it was his recommendation that it be put on this agenda for a vote of the Council. Discussion was held by Council Member Barfield that it is morally wrong to continue this downtown tax when downtown property owners were initially told that it would end in seven years. He mentioned that the Downtown Tax brings in $35,000 per year and is given back to the City of Dunn which means those who own property downtown are paying a.12 tax to subsidize the budget by $35,000. It's not fair for the downtown property owners to pay .12 more than other people in the City of Dunn. Council Member Robinson stated that the $35,000 is applied to the debt service that would be incurred by the City in order to make the Downtown Renovation possible. Council Member Maness stated that the Downtown Tax District was established at the request of the Downtown property tax owners. It was brought to the Council and those owners requested this tax. The Council did not levy this .12 tax but did it at the request of the property owners. He explained that the Downtown Revitalization Project was started based on a memorandum of understanding that the DDDC would pay $35,000 per year or 85% of revenue generated, whichever was greater and was a factor in the 324 revenue funding in order to move forward with the Downtown Revitalization. The Council would have never entered in to the Revitalization Project without the commitment of DDDC and others. To suggest that the .12 tax be abolished, would not be very financially sound advice because the City would lose $35,000 in cash flow to pay for the Revitalization Project. It would be irresponsible to eliminate the .12 tax after the project has been done. The Council entered into good faith with the Revitalization Project with that understanding during an open public meeting. Council Member Robinson stated that Mr. Cary Barfield brought up the fact that Ms. Frances Jones, who is in her nineties, owns property in the Municipal Service District and he would like to see if there is a way to exempt owner - occupied residential property within the Municipal Service District. Motion by Council Member Billy Tart and seconded by Council Member Maness to abolish the Sunset Provision for the Downtown Dunn Municipal Service District Tax. Motion carried 5-1 with Council Member Barfield opposing. Resolution Ratifying Adoption of Deferred Compensation Plan 457 Manager Autry explained that the Council is being asked to adopt a Resolution ratifying action previously taken by the City Council at the November 13, 2012 Council meeting adding the Deferred Compensation Plan 457. Formal adoption of a resolution is required by the administrator, Prudential Retirement. Motion by Council Member Barfield and seconded by Council Member Robinson to adopt a Resolution Ratifying Adoption of the Deferred Compensation Plan 457. Motion unanimously approved. A copy of Resolution (82013 -17) adopting the Deferred Compensation Plan 457 is incorporated into these minutes as Attachment #4. Temporary Blocking of Street — The Love Center St. John Missionary Baptist Church Little Avenue from Cumberland Street to Divine Street A request has been received from The Love Center — St. John Missionary Baptist Church, to close Little Avenue from Cumberland Street to Divine Street on Saturday, June 22, 2013 from 11:00 am until 3:00 pm for the purpose of having an "Out of School Jam ". Motion by Council Member Maness and seconded by Council Member Robinson to approve the temporary street closing as requested by The Love Center — St. John Missionary Baptist Church. Motion unanimously approved. Consideration to Adopt a Resolution in Support of Hospitals and Healthcare Funding Manager Autry explained that Harnett Health System (HHS) requested this resolution today. HHS is requesting Council support of this resolution as the General Assembly is considering several proposals that would adversely impact the financial health of hospitals if enacted, including additional reductions in Medicaid reimbursement and the potential loss of sales tax exemptions. These additional reductions in funding will adversely impact Harnett Health System's ability to continue the level of services it provides our community and will likely result in job losses. Motion by Council Member Barfield and seconded by Council Member Tumage to adopt a Resolution in Support of Hospitals and Healthcare Funding. Motion unanimously approved. A copy of Resolution (R2013 -18) Supporting Hospitals and Healthcare Funding is incorporated into these minutes as Attachment #5. ITEMS FOR DISCUSSION AND /OR DECISION Financial Report Finance Director Mark Stephens provided the following financial report for the period ending April 30, 2013: • As of April 30, 2013, the City had $3.4M in cash in the General Fund and $13M in the Water - Sewer Fund. In April of 2012 the City had $3.OM in the General Fund and $2.4M in the Water - Sewer Fund. • Investment earnings are in the .10 % -.08% range. • Building permit fees were $66,479 or 147.73% of budget. Benchmark for this month is 83.33% of budget. • Water and sewer revenues were $3,606,219 or 78.14% of budget. Benchmark for this month is 83.33% of budget. • Average fuel cost in April for unleaded was $2.89 per gallon and diesel was $3.14 per gallon. The City budgeted $3.35 per gallon. 325 • Sales tax revenue was $1,050,246 or 77.22% of budget. Benchmark for this month is 75.00% of budget. • Expenditures were 78.92% of budget in the General Fund and 80.29% of budget in the Water and Sewer fund. The benchmark for this period is 83.33% of budget. Council Member Robinson stated that he spoke with Finance Director Stephens about the current comp time especially in the Police Department and requested a report of the comp time hours particularly for the Police Department. Council Member Robinson requested the Council be provided a copy of the compensatory policy at the next Council meeting. Motion by Council Member Barfield and seconded by Council Member Tumage to accept the Financial Report. Motion unanimously approved. ADMINISTRATIVE REPORTS Motion by Council Member Tumage and seconded by Council Member Billy Tart to accept the Administrative Reports. Motion unanimously approved. ANNOUNCEMENTS The following announcements and/or comments were made. Mayor Pro Tem. Galbreath: ➢ City offices will be closed on Thursday, July 4, 2013 in observance of Independence Day. ➢ The next regular City Council meeting is scheduled for Tuesday, July 9, 2013 at 7:00 pm. Council Member Maness: ➢ He is a very conservative and frugal person and he takes it seriously, when spending taxpayer dollars. He has never been an advocate of tax increases unless there is no other alternative to continue to provide the level of services that are expected and demanded. In 2009 the tax rate was lowered and during a storm of economic turbulence, the City held the line on expenses, they did more with less, they asked the employees to give more, did not give the employees what they deserved and battled and saved to build back a fund balance that had been depleted. He is proud of what this Council has accomplished. He voted for the tax increase tonight because he did not believe there were more places to find an additional $164,000 in cuts from the operating budget. He encouraged the public to attend the budget work sessions. He was shocked to find a dissent tonight because there was a consensus among the Council during their work session as it related to a tax increase. He does not do what is politically correct but tries to do what is fiscally responsible and that is what he did tonight. It would be irresponsible to try and balance the budget by using fund balance because that is nothing more than kicking the can down the road and expecting someone else to deal with it a year later. He encouraged the public to come and attend the workshops and if they have ideas or suggestions or if there are services that the citizens no longer desire, then they need to share that with the Council. Council Member Robinson: ➢ Echoed Council Member Maness' comments. This Council has done an awesome job in trying to be responsible with spending and no one can accuse them of tax and spend. This Council has been concerned with quality of life and good quality services for the citizens of Dunn. He is very proud of what this Council did this year and he wished there would have been an alternative. When it comes to being fiscally responsible, he didn't join this Council to make friends. The next election will take care of itself, he is very proud of what this Council has done tonight. ➢ Extended an invitation to a Premier of a Documentary on the life of Mr. W.N. Porter, taken from the book, "The Unstoppable Leader" written by Mr. James Howerton, at the Stewart Theater on June 22, 2013 at 2:00 pm. Mayor Pro Tem Galbreath: ➢ He concurred with Council Members Maness and Robinson' comments. The department heads, City Manager and Finance Director did an excellent job in putting the budget together. Things do cost more and the needs of the community have grown. People expect good quality service and in order to render good quality services, it costs a little more. The .02 tax increase was a modest increase. As Council Member Robinson stated, the next election will take care of itself; he is here to vote and to make the best decisions for the citizens to provide good quality service. Council Member Billy Tart: ➢ Last year a tax increase was discussed and they did not raise taxes at that time because of the revenue received from the electronic gaming fees. He does not like to raise taxes. The Council was in agreement after the budget work session. Council Member Tumage: ➢ He was not in attendance at the Council Work Session but he did ask questions of the Council, Finance Director and City Manager and felt secure in the knowledge he gained during the work session. The Council looked at the electronic gaming fees and discussed what would happen if they ceased; the Council made a conscious decision on this budget. Council Member Barfield: 326 ➢ Budget vote is over with a 5 -1 decision. He had problems with the .02 cents tax increase. > He would like to see limbs larger than 6" in diameter picked up. ➢ At one time flag pole holders were installed downtown and he would like to see these holes put back in front of businesses. He feels the trees downtown are more dangerous than flag holders. ➢ He congratulated Chief Building Inspector Blackmon on his upcoming retirement. Manager Autry: ➢ Detours will be in place at Ashe Avenue and Powell Avenue for the Round -a -bout utilities in the next few days. Projected start date for the Round -a -bout is August of 2013. With no further business to discuss, a motion was made by Council Member Billy Tart and seconded by Council Member Barfield to adjoum the meeting at 8:53 p.m. Motion unanimously approved. Attest: w ��F Debra G. West City Clerk CITY o, O ': CORPO, � Z '. O `SEAL =� = " C^,ROLD �'�"n i n i t O's lw� Og6ar N. Harris Mayor