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Minutes 05-07-2019W81 MINUTES CITY OF DUNN DUNN, NORTH CAROLINA The City Council of the City of Dunn held a Special Called Meeting - Budget Work Session on Tuesday, May 7, 2019, at 9:00 a.m. 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 Dr. David L. Bradham. Also present was City Manager Steven Neuschafer, Assistant to the City Manager Mathew Boone, Finance Director Jim Roberts, Public Utilities Director Heather Adams, Interim Public Works Director Vince Washington, Planning Director George Adler, Chief Building Inspector Steven King, Chief of Police Chuck West, Parks and Recreation Director Brian McNeill, Human Resources Director Anne Thompson, Librarian Mike Williams, Attorney Tilghman Pope, Administrative Support Specialist Connie Jernigan and Tom Woerner with The Daily Record INVOCATION Mayor Harris opened the meeting at 9:00 a.m. and gave the invocation. Afterwards, the Pledge of Allegiance was recited. AGENDA ADJUSTMENT AND APPROVAL Motion by Council Member Tart and seconded by Council Member McNeill to adopt the May 7, 2019 meeting agenda as presented. Motion unanimously approved. PROPOSED B UDGET 2019-2020 WORK SESSION City Manager Steven Neuschafer reported that he has met with all department heads and reviewed all priorities and requests and the results are included in the packet. Revenue projections are based on property tax information obtained by the County and sales tax information from the NC Department of Revenue and League of Municipalities, along with the City of Dunn's past history. Revenue expectations have been lowered based on the fact that only about $1 million on total valuation for the ad valorem tax has been recovered after the $7 million loss of value which occurred from the 2017 revaluation. So far, sales tax is meeting expectations and has met or exceeded budget. Revenues are holding steady while the cost of doing business continues to increase. Fee increases proposed are the garbage and recycling by 2%, water rate increase, and increase in the storm water fee to help fund the storm water fee rate study. The proposed increase on storm water will increase commercial to $7 while residential remains at $2. Fund balance can be used for major storm water projects that were discussed at the retreat. Top areas of focus include: - Infrastructure improvements - Commission on Accreditation for Law Enforcement Agencies (CLEA) enrollment, which may include some additional expenses. - Proposed personnel changes to include full-time Communications Coordinator, additional part-time seasonal employees for Public Works, part-time GIS Technician for Public Utilities, and Finance will be transitioning a part-time position to full-time, increasing responsibilities. City Manager Neuschafer proposed a 2.5% COLA and 1% for merit increase. The budget as presented is not balanced but is demonstrating the results of increasing the Contingency to $500,000, as suggested by the LOC. The LGC stated that the City needs to be closer in line with peers. To balance the budget, it only allows .5% in contingency. With no tax revenue growth, it is very difficult to do all the things needed every year and continue to add to the fund balance. The City usually adds to the fund balance due to conservative budgeting and coming under projected expenses. A strong fund balance is important to the City to have cash flow to handle emergencies such as the two Hurricanes in 2018. The City currently has more than the minimum required by the State. Once the $500,000 contingency is taken out, the budget will be balanced. This plan was presented during the Work Session to illustrate the recommendations from the LGC and to show that it will probably take a tax increase to satisfy their concerns. Council Member Maness recommended showing the citizens how much the City's expenses have increased since the last tax increase, which was several years ago. City Manager Neuschafer reviewed the proposed budget for the General Fund. Discussion followed on the City's technology and IT support provided by Harnett County. The Finance Department technology was discussed due to the problems with putting the budget together. The hardware is up-to-date but the software is not. After concern was expressed on the need to make the accounting software a priority, City Manager Neuschafer assured the Council that new Accounting software is a priority for staff but the automated meter systems project really needs to be completed prior to changing the software. Once the automated meter systems project has been completed, the staff will investigate software and will be coming back to the Council. City Manager Neuschafer told Council that the Police Department budget increases are mainly due to the School Resource Officers, which is reimbursed by the County. Public Works increase is due to some additional seasonal staff, new leaf vacuum truck and new software for the Garage. Before purchasing leaf truck, staff will be investigating contracting the service and leasing equipment to determine best option for the City. Debt service was reviewed. Goal is to pay off some debts early, if possible, which will free additional funds to be used in the budget. Discussion followed on the Parks — still bidding out Tart Park project. Mayor Harris stressed the need for the parks to be ready for the State Games. "The parks are the face of our City and need to be pristine for events." Maintenance plan was discussed. pit, Mayor Harris reported that Harnett County is still looking at consolidating libraries. He feels a plan is forthcoming but they are still in planning stages. After inquiry on the Dunn Enrichment Center indebtedness, City Manager Neuschafer stated that there are two more annual disbursements on tax credits so it will be two more years before the City receives cash flow of $100,000 to 5150,000 from the project. City Manager Neuschafer then reviewed the Water/Sewer Fund. Revenues are a little over $6 million and expenditures just a little below $6 million. Budget includes sewer increase that has already been approved by the Council. Another part is to increase water rates, so that needed repairs on the water system can be handled. The water rate has not been adjusted for individual users in several years and staff is proposing slight increases across the board. Council Member Maness found the information in the water bill very helpful and encouraged staff to keep sending that message to the consumers. With the proposed increases, the basic user will see a $10.15 monthly increase on their water and sewer bill. City Manager Neuschafer reviewed the proposed rate schedule with the proposed increases to help fund maintenance, recover from the past major breaks and so the Water/Sewer Funds can be self-sustaining. After inquiry, it was confirmed that the City will need to be close to $34 for the 5000 gallon user to qualify for grants and the City is currently at $27.00. Mayor Harris stated that the plan makes good sense but it is going to be hard for residents to see both the water and sewer increases at one time. Council Member Maness stated that the consumers that use the most should pay the most. After further discussion, Consensus of the Council was to have increased rates based on usage Mayor Harris stated there is need for another budget session with two things still needing consensus, the amount to place in Contingency and the increase of the Water Rates. Consensus of the Council was to finish the budget work session at the next Council meeting. With no further business to discuss, a motion was made by Council Member McNeill and seconded by Council Member McLean to adjourn the meeting at 11:20 a.m. Motion unanimously approved. 1111111111111' OFD•,, -Z!. ORATQ, --Oscar N. Harris :p ®,® :Mayor Attest: SEPI •=_`� irkY`,-.. �t�411 neea111 Tawny Willarri� City Clerk ,J