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05272017320 MINUTES CITY OF DUNN DUNN, NORTH CAROLINA The City Council of the City of Dunn held a Budget Work Session on Thursday, May 25, 2017, at 2:00 p.m. in the Dunn Municipal Building. Present was Mayor Oscar N. Harris, Mayor Pro Tem Billy Barfield, Council Members Buddy Maness, Dr. Gwen McNeill, Frank McLean, Billy Tart, and Chuck Turnage. Also present was City Manager Steven Neuschafer, Finance Director Mark Stephens, Public Works Director Dean Gaster, Planning Director Samantha Wullenwaber, Recreation Director Brian McNeill, Human Resources Director Anne Thompson, Librarian Mike Williams, Attorney P. Tilghman Pope, City Clerk Jennifer Fortin, and Daily Record Report Melody Brown - Peyton. INVOCATION Mayor Harris opened the meeting at 2:00 p.m. and gave the invocation. Afterwards, the Pledge of Allegiance was repeated. AGENDA ADJUSTMENT AND APPROVAL Motion by Council Member Tart and seconded by Council Member Maness to adopt the May 25, 2017 meeting agenda with changes, if any, as listed below. Agenda Items Added: • none Agenda Items Removed: • none Motion unanimously approved. ITEM FOR DISCUSSION AND/OR DECISION Proposed Budget FY 2017-2018 City Manager Neuschafer noted a power point presentation was handed out to highlight some of the objects we are looking to accomplish. Under the 4 -year Historical and Proposed budget FY 2017-2018 General Fund it shows the 2014, 2015 and 2016 budget and the projected 2017 budget. You will see the growth we have had over the years with the Ad Valorem Taxes. In the second group under Sales and Service Tax the increase in that is unrestricted with a slight increase as well. The total revenues have increased over the years with the exception of 2015.There is also the projected surplus we might have at the end of the year if we continue on our current spending and we don't have any other equipment repairs. We do have some expenditures we plan to make at the end of the year and with some budget amendments that will be presented to you in June to balance and shuffle the end of year budget. The proposed budget for 2017-2018 is $9,967,000. The North Carolina League of municipalities anticipates a 4% increase in the sales tax. We have only budgeted 2% increase and that is the same as past years. There is $100,000 allocated for the Powell Bill Fund, which is restricted for the paving project. That is how we are going to have a paving project that is greater than our yearly allocation. The fust year we are going to do as many streets as we can with the funds available. That is why we are going to try and do $400,000 worth of paving this year instead of $300,000. We are anticipating to project. We have proposed to begin a Business Registration Fee. With the reduction and elimination of the privilege license, we have lost the ability to regulate some of our inspections and keep track of the business. We are allowed to by the stats to carry on with a business registration fee. The annual fee for each business would be $40.00. Attorney Pope inquired if the City would use the old records and send out notices to the businesses that there is a new business registration fee with an application. City Manager Neuschafer stated yes and a new ordinance would have to be adopted. Council Member Maness stated this would apply to any business inside the city limits but it is not effective for someone operating in the City that does not have an office here. Looking at the expenditures, there is a 2.5% cost of living allocation increase for the employees. We are required to increase our retirement contribution and the increase for sworn law enforcement is a little higher. We have proposed a 401K contribution at 5% for all employees. Currently the general employees receive 2% and law enforcement employees receive 5%. This allocation would bring all employees up to 5%. We have shown a decrease in health insurance per employee per year. We are saving $2,000 per employee per year. We have also budgeted the full incentive of $232,000 for Rooms to Go. Mayor Harris noted the net amount collected from Rooms to Go and the incentive we return to Rooms to Go for locating here, the net difference is $58,000. In the 10' year it will be at the regular rate. We propose a new position to be created in the street department. This would be a new -year hire and it would be for a crew supervisor. We are merging the Planning and Inspections Departments into one department and appointing a new department head into the position, if this budget is passed. We have a street resurfacing of $400,000 and that is part of the program being proposed. There is also a line item with a contingency of $25,000. Those are the main points of the budget for the General Fund. Council Member Tumage inquired if the resurfacing project and utilities repairs and upgrades was included in the $400,000 proposal or does the utilities have to come out of another budget line item. City Manager Neuschafer noted that would come out of another budget line item. For the first year or so we have selected streets that need little or no utility improvements. We hope to start the repairs this year for the next years paving. We have a line item in the Water and Sewer Fund for that. The $400,000 would be strictly for paving and that does not cover the utilities. Mayor Hams noted with the proposal for the resurfacing project we will not be incurring any debt. 321 City Manager Neuschafer discussed the following proposed Capital Items for Fiscal Year 2017-2018 Budget. • Police vehicles — Police Department • Inspections vehicle — Inspections Department • Dump truck and pick-up truck — Cemetery • 2 new pick-up trucks — Recreation Department This begins the rotation of the vehicles and specifically the pick-up trucks. Mayor Harris noted there are a lot of concept changes and if Council does not agree with these changes they need to talk about them as we go. City Manager Neuschafer noted under the 4 -year Historical and Proposed budget FY 2017-2018 Water/Sewer Fund it shows the 2014, 2015 and 2016 budget and the projected 2017 budget. There is not a lot of growth in the revenues because that is usage and purchasing. We just went through a rate increase for sewer rates and we are not proposing any rate changes in water and sewer at this time. Please keep in mind at the Budget Retreat we talked about applying this fall for a project, which we have to talk about in the coming months and what we want to try and do as an improvement to the water and sewer distribution system to eliminate these overflows. We do have to do a project and when we apply for that project, we are going to have to look at some kind of rate that would cover the debt. Council Member Tumage inquired if the sewer lines were a higher priority than the variation in the waste water treatment or is the meter reading feasibility study, when you rank order which one is the higher priority? City Manager Neuschafer noted they are all important and we will be looking at all three of them. City Manager Neuschafer noted the expenditures were the same as the General Fund for the employees. City Manager Neuschafer discussed the following proposed Capital Items for Fiscal Year 2017-2018 Budget. • Water and Sewer line work and that money is what has been allocated in the budget for the next years paving for line repair • Roof replacement - Water Plant • Various pump replacements — W WTP • Equipment purchases There are other budget items that also need to be addressed. • Technology Grants to be applied for • Grants we have already applied for • Water and Sewer projects • Stormwaterprojects • Public Works facility For stormwater, the impacts are much greater for commercial properties and parking lots. We would like to establish and bring to you a possible change in the way we calculate for commercial properties. We would like to make it more equitable between what the residences are paying and what commercial business are paying. We feel we can come up with a calculation that is far and nor over burdensome, but will still be more on a level in what we are asking the residences to pay. If we are going to be working in the right-of-ways and spending money on the storm drain systems that would help us with that process. Council Member McNeill inquired about the new position in the public works department. Public Works Director Gaster noted the department was looking for someone to hire with equipment and supervisory experience. This would allow us to have two crews working and get twice the amount of work done. Council Member McNeill also inquired about the Planning Director position. City Manager Neuschafer noted Ms. Wullenwaber has been supervising both departments for a few months now on a trial period. We are proposing the combine the departments and have one budget with a pay increase for Ms. Wullenwaber, which is included in the proposed budget. City Manager Neuschafer noted a general consensus is needed from Council. A general consensus was given by each Council Member unanimously. Motion by Council Member McNeill and seconded by Council Member Tart to adjourn the meeting at 3:22 p.m. Motion unanimously approved. u�e—AAI— 4�— Oicar N. Harris Mayor Attest: 4ke ferM.Fo,n, Clerk ���`G�SY OFO''.,� �: OAPORAT G SEA`- ?'Q 20 • ; CAPO�•,`,.