05152018Ext
MINUTES
CITY OF DUNN
DUNN, NORTH CAROLINA
The City Council of the City of Dunn held a Budget Work Session on Thursday, May 15, 2018, at 9:00 am. in the
Dunn Municipal Building. Present was Mayor Oscar N. Harris, Mayor Pro Tem Frank McLean, Council Members
Buddy Maness, Dr. Gwen McNeill, , Billy Tart, Chuck Turnage and Billy Barfield. Also present was City Manager
Steven Neuschafer, Finance Director Mark Stephens, Public Works Director Dean Gaster, Recreation Director Brian
McNeill, Human Resources Director Anne Thompson, Librarian Mike Williams and Attorney P. Tilghman Pope
INVOCATION
Mayor Harris opened the meeting at 9:00 a.m. and gave the invocation. Afterwards, the Pledge of Allegiance was repeated.
ITEM FOR DISCUSSION
Proposed Budget FY 2017-2018
Mayor Hams asked City Manager Neuschafer to begin with the basis upon which he developed this budget as a refresher and
how he arrived at the current figures and then the basis on which we stand on the previous 2017/2018 Budget and on the
grounds by which you fit in the budget for 2018/2019.
Mayor Harris recapped the major points that Mr. Neuschafer covered.
1. 3 % cost of living for everybody.
2. 2% merit increase - Based on evaluations
3. $785,000 paving project — trying to not borrow money in order to implement
Mayor Harris explained that the contractors don't want to move their equipment for less than a $1,000,000 project. They
want one street set to be paved, but you can't plan it that way in Dunn. Mayor Harris also pointed out that we're going to
have to put up with all the construction work that's going to be going on hiterstate 95. All of the contractors are going to
have everything they can do, and more. He explained that although some of the small contractors from this area would be
bidding on Interstate 95, not all of them will get a piece of the action. Although it may drive the cost of fuel up because it's
petroleum based, it won't be like he thought it would.
Over in the enterprise fund, we knew that we had a $518,000 repair bill this year— just one alone. But, then there was another
one about the same size. Due to of the age of our infrastructure, we can anticipate this each and every year.
Mayor Harris expressed a need for funds for restoration of ditches and things of that nature (Divine St for instance). We need
to continue that work because all of the ditches are falling in, the peoples yards are going away. We may have to do a special
capital project in reference to that
One staff person was added in Planning and one in Water. The big problem was the major projects that we were confronted
with, and an aging infrastructure. Our streets, water and sewer lines, processing of water, processing of waste products and
things of that nature. That's what's gobbling up the extra funds that we might have because we are blessed with increases in
revenue.
There's a $235,000 rebate to Rooms to Go, and we're on the second year of that with eight (8) more years to go. But, during
that ten (10) year period, their property valuation will decline because a Iot of that is based on equipment, and equipment
depreciates. It won't decline that much, but it will decline somewhat You can see the real benefit of the distribution centers
that we do have.
When the sales tax comes in from Rooms to Go that goes to the county, and it goes to Angier, Coats, Erwin just like it does
to Dunn on a prorate basis based on the county performance, everybody benefits. We'll all benefit from it even though it's
located in the City of Dunn.
We have a beautiful picture and we just thank the good Lord that it turns out that way. Because in 2007, 2008 and 2009 we
were struggling. We couldn't get increases to the employees because of the time. They've worked with us and helped us save
and have been frugal about their expenditures, and now is the time for us to give them the 3% that we're talking about and
also provide approval of 2% at the discretion based on merit on proper evaluation of each and every employee. That's a
benefit too.
Mayor Harris directing council to page 2 of the Budget. We have been blessed to have tax increases and increases in our
fund balances in 2015, 2016, and 2017 after we had paid down future debt. We're supposed to have $635,200. We wind up
with about $535,000 this year. That's where we are at this point Most of that $535,000 has been committed to the septic,
except for a couple hundred thousand dollars. That budget would be $3,400,148 and the then the budget 2018/2019 would be
$10,865,000. When you're looking at the line items when you refer back to that's the basis on which we are proposing the
budget for 2018/2019. With the unusual items that Steven and I have previously mentioned, that's pretty much where we are
at this point
Council Member Tumage said that the evaluation system for employees is a way to quantify the quality of the workforce we
have. An employee needs to be part of that process, as you well know. If they know what their position or job description is,
then they need to be taught to quantify. What does that mean? To them, it's a measure above 100%. It's a great incentive
program to help employees strive to do better, but also supervises supervisors. It's hard to do, it's an additional duty for the
supervisors because it is a lot of administrative work to keep up with. But if they have an employee punch list weekly, and
see who's doing what and then when time comes for an annual evaluation, it's not as hard to write. Mr. Neuschafer said that
he thinks it is the employees. They have to take initiative and choose and strive to better as well.
401
Finance Director Mark Stephens summarized the highlights of the proposed budget
Revenues: General Fund
A. Ad Velorem Taxes: $4,266,100 projected on a collection rate of 99.0% with the tax rate remaining at .50
per $100 valuation.
B. Powell Bill Fund balance is allocated for the proposed street resurfacing project
C. Garbage rate increasing from $16.95 to $18.95.
D. Recycling rate increasing from $3.05 to $3.45.
E. Vehicle Tax Fee increasing from $5 to $30 additional revenue to go directly to street resurfacing.
Expenditures: General Fund
A. Is 3.0% COLA increases for employees
B. Merit increase of up to 2.0% effective January 1, 2019
C. Retirement contribution for state retirement increase to 7.85% for general employees and 8.50% for
sworn law enforcement officers.
D. 401K Contribution for all employees remains at 5%
E. Health insurance cost has increased to $6,500 per employee.
F. The incentive amount for Rooms to Go is budgeted at $235,000
G. New position created in Piannino/hi pections Department
H. Street Resurfacing $785,000
Revenues: Water—Sewer Fund
A. Propose basic water rates to remain at $12.75 base rate and $4.08 per 1,000 gallons.
B. Propose basic sewer rates to increase to $11.00 base rate and $4.80 per 1,000 gallons.
C. The City of Dunn bulls purchasers would increase the same to $2.12 per 1000 gallons for those with a
contract minimum gallons per day.
Revenues: Stormwater
A. Increasing the stormwater fee to $2 for Residential and $5 for Non ResidentiaL
There was discussion regarding doing a future storm water run-off fees study.
Capital Items for FY 2018/2019
General Fund
Police
Police cars $160,000
Inspections
1 car $ 22,000
Streets
F-50 Dump Truck
$ 30,000
1New Pickup
$ 21,000
Recreation
1 car
$ 22,000
1 New Pickup
$ 21,000
Total initial USDA loan with grant request this fall:
$276,000
There was a brief discussion regarding the Vehicle Tax Fee increase. Council Member McNeill expressed concern over the
increase and said that the people need to know what the increase is for, not just to put it out there. Mayor Harris answered
that it is going strictly to the resurfacing of roads, etc. Council Member Maness reminded the council that we don't get as _.
much for Powell Bill as we used to. We've got a lot less resources to do these projects, so we don't have them. But citizens
are demanding that we have them, so we've got to have another resource to do them with.
There was a lengthy discussion regarding the revenue increase and the reasoning behind the 21% increase over what was
spent last year.
Mayor Harris noted that tipping fees have been increased. This is a much needed increase, because we're not really reaching
the dilapidated houses that are out therein our city. It seems like it's growing by leaps and bounds. Mr. King's job is heavier
and heavier as we go along.
Council Member Maness reminded council that we're getting ready to almost a million dollar project and it will be two (2)
years with nothing but filling potholes.
The debt is $762,300. That's $32,200 to budget some new items on. That is 7.816% of the capability.
Harnett Training School $87,558,600. We have not appropriated any income from Hamett Training School this year because
we had some unpaid development fees. In two more years, when those are paid off, then that 3.1 will start coming back to
the City of Dunn. But Hamett Training/DCDC is working exactly like it's supposed to work. It's putting out about $116 to
$160 thousand dollars cash flow a year and it's fully occupied.
Mayor Harris told Recreation Director Brian McNeill that we've got great facilities and things of that nature and we need to
make sure that we use a lot TLC because that projects the image of our city and he wants to make sure that that continues.
Mayor Harris advised council that future plans for the library have been deferred for a year that will enhance our facilities
and make it a great deal better.
In reference to the increase in the budget, saying that we're going to spend $9.6 million this year and next year we're
planning to spend $10,865,000. That's a $I2 million increase. In that is $875,000 in reference to the street paving program
and then increase in debt service, increase in recycling, and outlay for streets and things of that nature absorbs $553,300 of
402
that $1.2 million. The general increase in the budget for operating purposes was $691,600, which is 7.189% increase. 3% of
that, 2% of that and then 401Y, insurance, and other things that go along with employee increases make up a lot of that
Mayor Harris asked if we were going to take $500,000 - $600,000 hit to fond balance like we did last year. Manager
Neuschafer responded that according to the cost recovery, the red needle is just above the red. That's just what the narrative
says, it shows that we have no recovery. There's nothing built in to absorb any kind of repair, any catastrophe like we had
down on Clinton Ave. It shows that there's nothing extra in there. There is enough to cover the costs, paying the bills and
providing service. Council Member Turnage asked what it would take to put that in as a contingency line item specifically
for giving us flexibility. What would we have to do to have it only for input not to take out unless that's what it's meant for?
Manager Neuschafer responded that it would be Capital Reserve. He explained that we're still not covering the cost of
business. We're still not self-sufficient in the sewer fund. There was a lengthy discussion regarding establishing a capital
reserve line item for catastrophes. Mayor Harris suggested two things. Know what happened last year and know what we
have in the budget for this coming year. Let them do an analysis and an in-depth study and make a recommendation for this
administration istration on or before January ll.
Council Member Maness reminded council that at the last council meeting the recovery process for the worst outstanding
" debts on weedy lots and whatnot He asked, what is the status on that? Manager Neuschafer responded that looking at the
demolitions list there's $121,000 on that list alone. That's outside the grass cutting and all that. We're trying to assess what
Harnett County's timeline is for some of them because some of them will probably move quicker than the county. Mark's
office is drafting the letter going out to everybody as council agreed we would do. We'll send the letter out to everybody
letting them know that their debt's due, we have a lien on the property and we're going to start foreclosure proceeding within
the notice. The ones that we're going to initiate on are the highest, the oldest and the most likely the ones that don't have the
county looking at a tax foreclosure first That way, we're not spending money on something that doesn't come to us
specifically and we'll piggyback on the county taxes. That's where we're at right now.
There was some discussion about political signs in general and those placed in the NCDOT right of way.
AGENDA ADJUSTMENT AND APPROVAL
Motion by Council Member Maness and seconded by Council Member McLean to adopt the May 15, 2018 meeting agenda
with changes, if any, as listed below.
Agenda Items Added:
• none
Agenda Items Removed:
• none
Motion unanimously approved.
Mayor Harris noted a general consensus is needed from Council.
A general consensus was given by each Council Member unanimously.
Motion by Council Member McLean and seconded by Council Member Barfield to adjourn the meeting at 11:19 a m
Motion unanimously approved.
GITYOF"G�i scar N. Harris
:GORPpgQ :'GZ_ Mayor
Attest - - _
Me' as„4�:%sS2G1�.=Zo:- 3FAL TF -
R. Matti, CMC
Deputy Clerk .,y ...
CARO y��?,�
�.
aun❑00%