05192009456
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 19, 2009, at 2:00 p.m. in the Dunn Municipal Building. Present was Mayor Oscar N. Harris,
Mayor Pro Tem N. Carnell Robinson, Council Members Buddy Maness, Bryan Galbreath, Billy
Tart, Chuck Turnage and Joey Tart. Also present was City Manager Ronnie Autry, Finance
Director Mark Stephens, City Planner Steven Neuschafer, Building Inspector Mike Blackmon,
Recreation Director Perry Hudson, Police Chief B.P. Jones, Public Works Director Billy Addison,
Public Utilities Director Dean Gaster, Librarian Mike Williams, City Attorney P. Tilghman Pope,
City Clerk Debra West and Daily Record Reporter Reece Murphy.
INVOCATION
Mayor Harris opened the meeting at 2:00 p.m. and gave the invocation. Afterwards the Pledge of
Allegiance was repeated.
AGENDA AD.ZUSTMENT
Motion by Council Member Joey Tart and seconded by Council Member Galbreath to adopt the May 19,
2009 meeting agenda with changes, if any, as listed below.
Items Added to the Agenda:
• Resolution Authorizing the Filing of an Application for Approval of a Financing Agreement
Authorized by NC General Statute 160A -20 (2009 Miscellaneous Street Improvements)
Agenda Items Removed:
• none
Motion unanimously approved.
PRESENTATION
A DVD of the Waste Not Recycling Project by Ms. Hayes Snipes was shown to the Council
ITEMS FOR DISCUSSION AND /OR DECISION
FY 08 -09' Budget
Mayor Harris yielded to Manager Autry and Finance Director Mark Stephens
Mr. Stephens summarized the process which was used to begin preparation of the budget and explained the
decrease in revenues expected including sales tax, investment revenue, and inspection fees. Revenues in
the General Fund were down $130,000 over what was budgeted the previous year. Revenues were
projected conservatively. With Harnett County's revaluation, it will delay the final numbers realized from
this because at this time there are approximately 7,000 to 8,000 appeals pending. There is an increase in
health insurance premiums. He explained that Powell Bill funding is based off the gas tax and new car
sales. With car sales down, the Powell Bill reduction is projected at 10 -11 %.
Mayor Harris asked Manager Autry to summarize the budget.
Manager Autry stated that in preparing the FY 2009 -2010, the variables have been the revaluation of
property, loss revenues from DMV taxes, interest on investments, sales taxes, building permits and Powell
Bill fund.
Mr. Autry pointed out that for every .01 cent tax increase, it would generate $66,500.00.
Revenues: General
• Ad Valorem Taxes: Figures are based on an approximate tax base of $678,097,500 which is an
increase of 15% from the previous year due to the revaluation. The recommended tax rate of .46
per $100 valuation with a 98% collection rate is required to balance the budget. A tax rate of .42
per $100 valuation is a revenue neutral rate that is designed to bring in the same amount of
property tax revenue as before revaluation, but is not adequate to balance the budget.
• The majority of the state revenues have been projected to decrease this year. The cable- franchise
fee is the only one that is showing a slight increase.
• DMV taxes will drop due to the value of automobiles decreasing.
• Fund balance has not been appropriated to balance the budget.
Revenues: Water
• Water rates will increase slightly for residential users that use in excess of 10,000 gallons a month.
This is due to a requirement by the State to adopt a uniform rate structure for residential
customers. This is also related to the conservation policy mandated by the State.
Expenditures: General
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• General Fund operating is comparable to the FY 08 -09 Budget.
• Employee hospitalization insurance is with Blue Cross Blue Shield of North Carolina at a cost of
$464.97 per employee per month This is an 8.2% increase along with an increase in deductible
from $500.00 to $1000.00. This is an increase in cost of approximately $58,000.00 and is
attributed to the fact that over 30% of the City employees met their deductible during FY 2008-
2009.
• All debt service requirements have been appropriated in this budget to meet our debt obligations.
(Approximately $317,000.00 in debt service). Our statement of debt is attached for your review.
• Capital items have been addressed. A list of items proposed for funding is as follows:
Police Department
Five (5) vehicles (Finance purchase) $125,000
Public Works - Cemetery :
Mower $ 5,500
Public Works:
Boom Truck for Limbs/Yard Debris
(Finance Purchase) $100,000
Recreation:
Storage Area attached to rear of Dr. P.K, Vyas, MD
Recreation Center $ 20,000
Building Inspections /Planning Dept.:
HVAC and window replacement $ 15,000
$265,500.0
Exoenditures: Water
• Capital needs have been addressed for repairs and replacement to pumps and motors at the Water
and Wastewater Plants
• All debt service requirements have been obligated in the FY 2009 -10 budget to meet our debt
responsibilities. {Approximately $439,000.00 in debt service }.
• $200,000.00 has been placed in the Contingency line item for unforeseen capital expenditures.
Highlights:
REVENUE. GENERAL FUND
^^ ,
Ad- Valorem Taxes
Increase - $283,287.00
0.01= $66,500.00
Cable — Franchise Fees
Increase - $ 10,000.00
State Shared — Utility Franchise
Increase- $ 70,000.00
TOTAL INCREASE
$363,287.00
DMV Taxes
Decrease -$ 53,000.00
Garbage Fees
Decrease -$ 15,000.00
Interest on Investments
Decrease -$ 50,000.00
NC Powell Bill
Decrease -$ 65,000.00
NC Sales Tax
Decrease -$ 21,000.00
NC Sales Tax -' /2% County Ratio
Decrease -$ 37,000.00
Building Permits
Decrease -$ 20,000.00
TOTAL DECREASE $261,000.00
FY 08 -09 $8,701,556
FY 09 -10 $8,431,900
3.1 Reduction
Due to the current economic situation, there is no salary adjustment recommended
The FY 2009 -2010 budget represents a level of funding which will allow the City to continue the present
level of service to our citizens. This is a realistic estimate of our revenues and expenditures for next year. �l
Mayor Harris spoke about the current grants that are being considered for award to the City of Dunn and
how the Council will have to make decisions with regard to accepting and funding these grants.
The Council spoke about the decrease in revenues seen in the FY 09 -10 budget and the likely possibility
that declining revenues will reoccur in the FY 10 -11 budget year. With the declining economy, they also
spoke about not decreasing the current tax rate in order to address future decreasing revenues. Mr. Autry
stated that in comparison with other surrounding municipalities, the City of Dunn currently has the lowest
tax rate along with the Town of Erwin at .48 per $100 valuation.
The Council discussed the effects a revenue neutral budget would have on the economy. Once the tax rate
is set, it cannot be adjusted until the next fiscal year.
Discussion was held about how the revaluation has affected struggling industries, and the declining
equipment evaluation for industries which decreases the revenue received by a municipality. They
discussed how one industry in town brought in $60,000.00 taxes during FY 08 -09 but has since closed and
will not bring in this revenue for FY 09 -10; these are the type of factors that need to be considered.
Some of the accounts that the Council had questions about are as follows:
General Fund Expenditures
10- 420 -5700 @ $17,000 (increase of $11,000 for a potential annexation study)
10 -500 -1500 @ $92,000.00 (roof repair to the municipal building- overlay and not replacement- discussion
was held about allocating funds to replace the roof; not patch -work. Discussion held about the structure
damage and the need to replace the roof at the library. Discussion was held about directing Manager Autry
to obtain a report on the state of condition of all City -owned buildings. Discussion was held about the cost
effectiveness to patch the roofs).
10 -510 -3301 @ $10,000.00 (police dept. bullet -proof vests that must be replaced on a routine basis -
includes targets for target practice, crime scene supplies and tape, new reflective traffic vests)
10 -521 -0202 @ $45,000.00 (monies transferred from recreation account to Police Athletic League (PAL)
account since PAL is responsible for temporary employees that work for the pool)
Discussion was held about Manager Autry and Chief Jones evaluating the pay rate for PAL employee,
Ryan Ray. His responsibilities exceed the pay rate established by the JCPC grant funded for this position.
The City can supplement the salary for positions that warrant more pay than established and approved in
the grant application.
Discussion about the various PAL grants, length of grants, and reporting requirements
10 -540 -0200 @ $138,200 (Bldg. Inspection salaries and wages decreased — eliminated Fire Inspector
salary /position)
10 -540 -4502 @ $55,000.00 (Bldg. Inspection contract services for Fire Inspector — The City proposes to
contract out this service to Dunn Emergency Services since they have several certified fire inspectors on
hand. Mr. Autry explained that for the past year, the City of Dunn has not been successful with hiring a
qualified fire inspector with level III certification)
10 -540 -7400 @ $15,000.00 (Bldg. Inspection Capital Outlay for HVAC and partial window replacement
for Planning/Inspections building— discussion held about allocating monies to replace all the windows in
the Planning/Inspections building)
10 -560 -1301 @ $245,000.00 — Street Lighting (increased funds for lighting upgrades)
10 -560 -3200 @ $6,800 — Chemicals (Street Dept. - treating fire ants at the cemeteries and parks by city
personnel who are certified to apply these chemicals)
10 -572 -1700 @ $35,000 (Street- Powell Bill - Maintenance to equipment — if not sufficient, then the general
fund maintenance and repair account is used)
Discussion was held about the feasibility to sweep all streets in town. Mr. Autry stated that the basis for
sweeping streets has been that the only streets swept are curbed and guttered. It would be time consuming
and costly to purchase the sweeping attachment to enable the machine to sweep all city streets that do not
have curb and gutter.
10- 610 -1000 @ $25,000 (Community Assistance — monies have been allocated for requests)
10- 620 -0203 @ 20,000.00 (Recreation - part -time salaries — reduced to shift monies to PAL which oversees
the City pool)
Council Member Maness stated that he spoke with Recreation Director Perry Hudson, and asked about the
number of activities provided by the recreation department and how much it cost to provide the various
programs such as basketball, baseball, softball, t -ball, football, cheerleading, and soccer. In the proposed
fee schedule, there is a proposed sports registration fee increase for in -town participants from $15.00 to
$20.00 and an increase for out -of -town participants from $30.00 to $40.00. This proposed fee increase
prompted him to gather information. He provided the following estimate of funding required to provide
these activities:
Equipment @ $35,000.00
Officials @ $33,000.00
Field Maintenance @ $10,000.00
Trophies @ $3500.00
Total Conservative figure to provide activities = $81,500.00
Participant data base for recreation programs reflects 1854 individuals
From the fall of 2008 to current, there have been 1162 participants in the recreation program
Out -of -town participants are approximately 43.37% and using the number provided from the fall of '08 to
present, this equates to 658 in -town participants and 504 out -of -town participants.
Based on the current fee structure of $15.00 for in -town participants and $30.00 for out -of -town
participants, they are looking at $24,990.00 in fees generated compared to $81,500.00 expenses incurred on
the low end - that equates to approximately 30.3% of the City's expenses.
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Mr. Maness stated that right now with the current expenditures of $81,500.00 divided by 1162 participants,
it averages $70.14 per participant to break even. The City is absorbing a lot of the cost and the Council
needs to consider raising the fee structure specifically for out -of -town residents. This is creating an extra
burden on the recreation department.
Mr. Maness asked that they consider adjusting the out -of -town participant fee to off -set some of the costs.
He suggested a registration fee of $60 to $65 for out -of -town participants and $20.00 for in -town
participants. The proposed rate of $20.00 and $40.00 is considerably lower than other surrounding towns.
Council Member Turnage asked D Perry Hudson for comparable comps to other towns. Mr. Hudson
stated that just as the tax rate, Dunn has always been lower than surrounding areas. He added that
recreation has never been a service. They want as many children involved in the program as possible
without pricing them out but there is a lot of funding involved with the program. Dunn's registration rates
are probably comparable to the Town of Erwin. Mr. Hudson stated that there should be some adjustment\
and his recommendation is to propose the rates at $20 for (in -town) and $40 for (out -of- town). He added
that the City of Dunn's economy has benefited from folks participating from Dunn's ETJ area and the
Sampson County area because these folks buy from the local merchants (restaurants, gas, etc). In his
experience, recreation departments do not usually break even.
Mayor Harris stated that in this situation, they want the very best recreation program as well as the most
participants they can possible take care of. He added that this is an investment in the children. He asked
Mr. Maness what is his recommendation. Mr. Maness responded it would be reasonable to set the out -of-
town registration fees at $60.00 to $65.00 and leave the in -town fee as proposed at $20.00.
4:35 pm: 10 minute session break
General Fund Expenditures = $8,431,900.00
Water Fund Expenditures
30- 810 -7408 @ $1,000 (Co- Safety — purchase safety vests, etc.)
30- 811 -1300 @ $202,200 (Water plant utilities- increased cost)
30- 811 -3200 @ $292,400 (Water plant - chemicals & lab supplies- increased cost)
30- 821 -1300 @ $202,200 (Wastewater plant utilities- increased cost)
30- 821 -1500 @ $5,000 (Wastewater plant building maintenance & repair reduced since roof repairs were
recently made)
Water Rate Structure
Manager Autry stated that this information was provided to the Council during the budget retreat held in
February. The proposed uniform water rate structure does not impact the normal user. This new rate
structure is mandated by the State and affects those customers that use in excess of 10,000 gallons per
month. This new structure is designed to conserve water as opposed to the current graduating scale that is
now in place that provides the customer with decreasing costs as they use more water. Mr. Autry presented
a schedule which showed the small percentage of residential customers who used more than 10,000 gallons
per month in 2008. 1.84% of customers used more than 10,000 gallons during the winter of 2008 and
6.56% of customers used more than 10,000 gallons during the summer of 2008.
The Council will be asked to adopt the uniform water rate structure along with the FY 09 -10 budget. Mr.
Autry will proceed with proposing a uniform rate of $3.50 per thousand gallons for consumption above the
minimum 2,000 gallons /per month for residential customers. The minimum fee for 2,000 gallons will
remain at $12.75 inside the City limits and $25.50 outside the City limits. Each gallon used after the
minimum will be at a cost of $3.50 per thousand gallons for inside the City limits and $7.00 per thousand
gallons for outside the City limits.
FY 2009 -2010
Proposed Fee Schedule
After reviewing the schedule, Council consensus was to double the current fees being charged to mow
weedy lots.
Town of Angier Contract for
Building Inspection Services
The existing contract provides for up to 15 man hours per week for the City of Dunn to provide building
inspection services to the Town of Angier for an annual contract price of $36,000 /year. With the decline in
construction, Town Manager Coley Price of Angier, is requesting that the number of man hours reduce to
10 hours per week at a contract price of $30,000 /year.
Mayor Pro Tern Robinson suggested that they defer this issue until after the Council discusses the Rental
Housing Ordinance.
Fire Inspections Contract
Manager Autry stated that over the last year, the City of Dunn has not been successful in hiring a Certified
Fire Inspector with grade III certification. Most employees with this grade do not want to step out of the
realm of a Fire Department. Dunn Emergency Services D Gary Whitman is proposing a contract to
provide the City of Dunn with this service at $55,000 per year. This is a one -year contract.
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Council consensus was to proceed with the contract.
Rental Housing Ordinance
Attorney Pope stated that if the Council feels this issue will require his presence, then they will need to
defer until a later date because he will have to leave in the next few minutes.
Council consensus was to defer discussion until a later date.
Mavor Harris revorted the followine Seven
Oven Issues to Address In the General Fund.
• Recommendation by Council Member Galbreath to provide a report on the status of the state of
repairs on all City -owned buildings
• Roof Replacement for the Municipal Building at $160,000.00 ($72,000.00 is budgeted)
• Review and report back from the Police Chief with reference to Ryan Ray's salary of $9/hr.
• Window replacement for Planning/Inspections Building at $25.000.00
• Recreation Registration Fee Suggested at $20.00 for in -town participants and $60.00 for out -of-
town participants
• Roof Replacement for the Library at $55,000.00
• Weedy lot mowing fees — recommended to double the fees
Mavor Harris revorted the followine issues
which were deferred.
• Town of Angier Contract for Building Inspection Services
• Rental Housing Ordinance
Resolution Authorizing the Filing of an Application
For Approval of a Financing Agreement Authorized
By NC General Statute 160A -20
Motion by Mayor Pro Tem Robinson and seconded by Council Member Maness to adopt a Resolution
Authorizing the Filing of an Application for Approval of a Financing Agreement Authorized by North
Carolina General Statute 160A -20 (2009 Miscellaneous Street Improvements). Motion unanimously
approved. A copy of Resolution (R2009- 22)authorizing an application with the North Carolina Local
Government Commission forApproval of a Financing Agreement is incorporated into these minutes as
Attachment #1.
5:43 p.m. - Motion by Council Member Maness and seconded by Council Member Turnage to recess the
meeting until Wednesday, May 27, 2009 at 2:00 pm in the Dunn Municipal Building. Motion
unanimously approved.
Attest:
D,�. a
Debra G. West
City Clerk
OITY .. .. '
OORPOR
u % AL
Oscar N. Harris �
Mayor
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