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HomeMy WebLinkAboutBudget Work Sessions 2020 1 May 26 & 28, 2020 IREDELL COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING MINUTES – Budget Work Sessions May 26 & 28, 2020 The Iredell County Board of Commissioners met on Tuesday, May 26 and Thursday, May 28, 2020, in the Iredell County Cooperative Extension for the purpose of budget work sessions. Tuesday, May 26, 2020 noon Board Members Present Chairman James B. Mallory III Vice Chairman Tommy Bowles Gene Houpe Marvin Norman Ken Robertson Staff present: County Manager Beth Jones, Deputy County Manager Susan Robertson, Assistant County Manager Joe Pierce, Finance Director Deb Cheek, Budget Analysist Caroline Taylor, and Clerk to the Board Amy Anderson. CALL TO ORDER: Chairman James Mallory called the meeting to order. A copy of the budget is available on the County’s website and Clerk to the Board’s office. County Manager Beth Jones said staff has made cuts and the budget is a worst-case scenario. If revenues do not tick back up this budget will get the County through the next fiscal year. Jones hopes revenues pick back up mid-year as things start to reopen. Sales tax has taken a hit but the first impact will not take place for three months. A steady decline in sales tax is predicted before hopefully picking back up. There is a decrease in fees for services. There has been an increase in the ad valorem, but not as much as anticipated because the collection rate was scaled back to the FY 18-19 rate (98.91%) and the 1¢ for the school capacity bond. Vice Chairman Bowles asked if it is necessary to levy the 1 cent increase. Deputy County Manager Susan Robertson said it is in the County’s best interest to do it because the County is already leveraging debt that is being paid off and a delay in issuing the bonds. Vice Chairman Bowles said Mooresville is ready. Jones said Mooresville has started their part. Commissioner Robertson said the 1¢ was in part to levy and accumulate it. It would not have been 1¢ if the Board had waited. Jones said the 1¢ was help to satisfy the debt service but also roll funds in to cover as well. The plan was at that debt rolls off, the other rolls in to pay for the bonds. Jones reminded the Board that the County put more ad valorem towards debt service for three to four years to help bridge the gap. Vice Chairman Bowles asked when the 1 cent increase is shown. 2 May 26 & 28, 2020 Robertson said tax bills are issued in August. Budget Schedules: Finance Director Deb Cheek, Deputy County Manager Susan Robertson, and County Manager Beth Jones explained each of the schedules and graphs of the General Fund. Cheek said staff looked closely at the following: Property taxes – End of year projection exceeds budget by 0.7%, but not going meet budget on delinquent collections, however delinquent notices were mailed May 11 so there may be an uptick. Cheek projected a shortfall of $725,000 and reduced delinquent collections for next year. This year’s collection rate will exceed 99%. As of Friday, the collection rate was 98.8%. Sales taxes – Cheek explained staff worked with the NCACC for projections and have reduced this year considerably, and went middle of the road for next year. Cheek said projections from NCACC included resort counties and staff does not feel Iredell County will take that big of a hit. Staff used a worst-case scenario but try to be judicious. Sales taxes from July through January were collected and is 12.8% over FY19. There was a 9% increase in February but a 10% reduction in March. Cheek projected a 10% decrease for fourth quarter projections over prior, and took a 50% hit for May and June. This equates to a $4.2 million short fall in sales tax revenue before the end of current year. Cheek noted it will be while before the hit is noticed. Cheek said salaries are budgeted at 100% and have always had lapsed salaries, because not everyone is at full capacity. In the past, a very small portion of lapsed salaries has gone to revenue. Staff looked at lapse salaries to see if it would help with some of the shortfall. The unused merit funding is budgeted in one department and is moved as it is used. There is $5.375 million in lapse salaries and $1.1 million in unused merit that has not been used and this is how staff anticipates covering the $4.2 shortfall in sales tax this current year. Chairman Mallory asked for a breakdown of the merit and lapse salaries. Taylor distributed a handout on different ways staff proposed to save money this year and next. Commissioner Robertson said asked if sales tax is considered revenue in the month it is earned or received. Cheek said the month earned. For July, August, and September those sales distributions are pulled back from the prior. They are reported in the year they are earned. Jones said several provisions went in place immediately after COVID-19 began in order to help with any loss. Commissioner Robertson said the sentiment of the Board is to estimate revenues low. Jones said worst-case scenario is given in hopes there will not be a massive second wave, and things can be added back to the budget. If things cannot be added back the proposed budget will sustain through the next year. Vice Chairman Bowles asked if there is a list. 3 May 26 & 28, 2020 Jones said yes. Budgets were due in February. At that time, all of the department directors were planning a budget based on everything going well. When COVID-19 hit in March, cuts were immediately made. Staff will create a recommendation of priorities and as revenues pick back up the list will be brought to the Board. Chairman Mallory asked the amount that will be added back. Jones will provide the Board with a number. Development fees – a 23% reduction is anticipated. Recreation fees – a 51% reduction is anticipated. Cheek expects a $300,000 increase is ad valorem this year and will roll over $1,020,000 in expenditures that will not be made this year. For June 30, 2020, Cheek predicted an addition of fund balance of $962,000. Plans for next year, there is some fund balance used to balance the budget; $250,000 for a Fairgrounds Master Plan; $30,000 for a Planning grant match. There is also a possibility of the Board assigning $6 million. With that, there will be a fund balance of 18.9%. Commissioner Houpe asked if that included the $6 million. Jones said yes. The $250,000 for the Fairgrounds Master Plan was in the State budget for the current FY that has not been passed yet. Hopefully, it will be in the budget if it passed and the funds will come to the County in order to replenish the fund balance. Commissioner Norman asked if this is for the current FY budget. Jones said yes. Commissioner Robertson gave an update on the CRTPO. The NCDOT budget is als o funded by general fund. The State is already seeing a drop in revenue that will exceed the great recession by leaps and bounds. Any highway construction project that has not already started has stopped and will not resume until 2021 at the earliest. The NCDOT is struggling to find funds to finish projects that have already started. The only projects that are progressing that are costing more to stop than complete it. Even then, the maintenance budgets are dry. Robertson said not to anticipate the $250,000 for the Fairgrounds Master Plan. Jones said if COVID-19 goes on long later than anticipated, some of the fund balance can be appropriated for operational expenditures, and still be at 18%. Jones shared appreciation for a conservative board who has set policies on how dollars are spent. FY21 Budget Revenues expected to be reduced include: property taxes, sales taxes, development fees, recreation fees, and investment earnings. Cheek noted that the Public Safety Project and Jail project are being closed out and will produce $2.3 million that will come into the general fund and be able to cover some of the capital projects. There is an increase in evaluation of property taxes totaling $969,036,000 (3.8%). One penny on the tax rate is $2.6 million. Evaluation growth is $5,196,000 in additional taxes, creating a total tax increase of $7.8 million (5.85%). The collection rate was reduced to the 2018-19 collection rate. A reduction is sales tax of $1,032,000 (20%) is expected for the first quarter, 10% in the second quarter, third quarter is expected to be even with the rate in January 2019, and a slight growth of 3% in the fourth quarter. 4 May 26 & 28, 2020 Cheek said development fees were reduced by 1.1 million (18%) and recreation fees by $141,000 (18%) and investment earnings were cut in half. The following measures were taken to help offset the shortfall: increased budgeted lapsed salaries to take the total budgeted amount to $3 million leaving some wiggle room and transferred savings from capital projects (Public Safety $1.1 million and Jail $1,250,000). The proposed FY21 budget is $230,357,300 and one cent on the tax rate is $2,638,397. Unassigned fund balance as of June 30, 2019 was $48,845,341 and no appropriations have been made this fiscal year. Estimated revenue as of June 30, 2020 is $215 million and estimated expenditures is $212 million. A projected in the year encumbrance rollovers in the amount of $2 million. Creating a difference of $962,970 that will be added to fund balance creating a total of $49,808,311. Assignment of fund balance is $6 million if the Board desires, $250,000 for the fairground master plan that will be in next year’s budget and $30,000 Planning grant match which creates an estimated unassigned fund balance of $43,528,311. Recommended budget is $230,357,300 leaving a fund balance percentage of recommended budget of 18.9%. Vice Chairman Bowles said the fund balance must be protected. New Positions Jones went over the following new position recommended requests: 1 GIS mapping technician; 2 full time and 1 part time day porters (Facility Services for cleaning at Cooperative Extension, Animal Services, Health Department); 4 SROs (funded 80% by ISS and 20% plus capital expenses by the Sheriff’s Office budget); 3 telecommunicators and technical support specialist for ECOM; administrative support assistant for Building Standards. Capital Outlay – capital request by department. Commissioner Robertson asked about the excavator for Facility Services. Jones said there was a cost benefit analysis done and staff decided it would not be used enough to pay for it. Jones explained there were several requests for desks and someone in the community donated some very nice desks, which was a savings. Expenditures Jones asked the Board to look at merit increases during a mid-year review of the budget. Cheek said this information is based on service types departments. Commissioner Robertson asked how there was a decrease in education when there is an increase in expense. Jones said the per pupil funding is in creased, but as a far a part of the formula a capital reserve is created. The Board agreed to add $5,000 to the Fort Dobbs funding and $3,000 to HealthReach funding. Jones said most departments have a decrease in a training and development because of COVID-19. 5 May 26 & 28, 2020 County Commissioners –new agenda management software Administration – request includes marketing for county services Human Resources – new HR software; reduction in contracted services, telephone Elections –expenses for the presidential election Finance – includes reclassification of Budget Analyst Tax Assessor –replacement vehicle and overtime for tax listings Tax Collector –incentive program; reduction postage Mapping – GIS mapping tech and replacement scanner/plotter Information Technology Services – change in ant-virus software and contract increases for various software Register of Deeds – carryover of funds in Technology & Preservation Facility Services – addition of day porters (one FT, one PT), transfer of 4 grounds staff to Parks and Recreation Buildings – added GeoGrid parking for Elections, cut renovations request at Animal Services, Gov. Center Complex, Human Services Building, and Parks and Recreation, cut additional camera request at PSC, cut day porter at GCS Vehicle Services – includes funds for 2 vehicle lift replacements Courts – 3 lateral file cabinets, new furniture for new judge Legal – no changes Economic Development – matching funds for future transportation/road project General Governmental – increase in retiree health insurance and vehicle tax system fees, eliminated employee performance pay Special Appropriation Sheriff – 1 SRO, 26 marked, and 5 unmarked replacement vehicles, xray imager, recording system for interview room in SVU, security camera for SVU building; seven SROs cut Jail – increase to hospital/medical care, utilities, food service, and contracted services; 2 marked vehicle replacements, 2 copier replacements Animal Services – increases to professional services and 2 replacement vehicles included dog boxes and safety lights; decrease to medical supplies and departmental supplies ECOM – 3 telecommunicators, tech support specialize; cut telecommunicator, a QA specialist, and a PT background investigator Emergency Telephone 911 – set by state 6 May 26 & 28, 2020 EMS – 1 PT operations officer, and 3 reclassifications; increase for new Medicaid cost study EMS (Specialty Services) – increases to equipment maintenance and repair Fire Marshal – increases to vehicle maintenance and repair, supplies; request for Assistant Fire Marshall was denied Emergency Management – replacement of 2 APX8500 mobile radio replacement Building Standards – new admin support specialist and reclassification of 2 building inspectors, vehicle replacements, and one additional vehicle Planning – part-time Planner III, reclassification of Erosion Control Inspector II, Transportation Plan Grant, replacement vehicle Central Permitting – overall decrease with a slight increase in contracted services Cooperative Extension – increase in NCSU contract in contracted services COVID-19 Relief Funding Jones said the County received $3.2 million in COVID-19 Relief Funding for the County as a whole. The County is required to submit a plan to the State by July 1, 2020 on how those funds will be spent. The majority of the response to COVID-19 has been the County, however the other governmental agencies have had expenditures. Jones reached out to the municipalities regarding their expenditures. The funds may not be used to replace loss revenues. Commissioner Robertson asked if the County is responsible for managing the funds. Cheek said yes. Robertson suggested the municipalities provide documentation for what they have already spent and process the reimbursement. And, going forward they request to draw down those funds. Chairman Mallory recommended At 5:12, Chairman Mallory recessed the meeting until noon, Thursday, May 28, 2020. Thursday, May 28, 2020 – Noon Commissioner Robertson said this is a tough budget year and complimented the budget team on producing a balanced budget. The budget is the finished product of a lot of work and hard decisions. The Board has not lost appreciation on what it took to get a balanced budget. Jones explained that Kent Greene will come in regarding the Fire Tax District and Sheriff Darren Campbell has requested to address the Board. Human Service Departments Health Department – 3.1% increase, decrease in salaries and benefits because of defunding an administrative support position, adding new cisco switches, new equipment for dental and women’s clinic. 7 May 26 & 28, 2020 Chairman Mallory said the State has identified 250 contact tracers and would like to double it. The health department never stops doing contract tracing. The department has gone above and beyond. Mallory suggested the department taking a look at what they need to augment their contract tracing. Social Services – 1.28% increase, includes two reclassifications, two copiers, three printers, and vehicle replacement. Chairman Mallory said there have been 25 adoptions to-date. Veteran’s Service – Overall reduction due to cancelled travel because of COVID-19, requesting a renewal license to enhance security to transfer documents. Public Library – 1.22% increase There is a separate appropriation for the Town of Mooresville Library. Jones said there is a 10-year contract from 2005 and automatically renews for the term of the contract, so it renewed for another 10 years. There is a provision that both parties can agree to amend the contract. Jones reached out to Town of Mooresville’s manager for a meeting to revisit the contract to be more line with how other counties fund the library. The County funds them almost $33 per capita the next highest in the State is Chapel Hill library at $9 per capita. Jones added the contract states they will provide like services as the County, but they do not. The Town does not use NC Cardinal. Commissioner Houpe said this is the year to discuss the contract. Parks & Recreation – transferred personnel from Facility Services and makes up a large portion of the increase, requested a ball field conditioner Recreation Center – reduction from last year, requested a PA system. Departmental budgets were approved by consent. Debt Capital Taylor said debt service has a 6.8% increase and 2 debt issuances that rolled off this current year (DSS facility and rescue squad financing). The debt service includes the new radio lease and equipment for the Recreation Center. Vice Chairman Bowles asked if the debt service included the new school bond. Taylor said no, debt service for schools is under education. Commissioner Robertson asked the reason for the increase. Taylor said the lease for the radios is more than what rolled off, because those were the last payments. Chairman Mallory said the cost for the radio lease essentially comes from the 9¢ fire tax. Capital Improvement Funding Taylor said the capital reserve is coming from education. Education capital is being funded by the sales tax. 8 May 26 & 28, 2020 Facilities & Improvement Vice Chairman Bowles shared concern over the air wall panels (at Cooperative Extension) being high on the priority list. Jones said the rooms are frequently used and Facility Services has to come each time to move the panels because they are not easy to move. The panels are currently tearing the carpet when moved. Vice Chairman Bowles asked about the jury room in the courthouse. Jones said the best time to do work in the jury room is when it is not being used. Jones said the wallpaper in there is peeling off and there are several holes. Vice Chairman Bowles said it is difficult to explain to the public about investing in the jury room. Chairman Mallory asked for a breakdown of the cost of the renovation and a list of any areas in the courthouse that asbestos not been mediated. Capital Improvement Plan was approved by consent. All-County Fire Tax District Kent Greene went through the fire tax. Greene said it was important to the fire departments to know they would not go backwards in funding. Staff used the estimated revenues to come up with an approximate 5% increase for each department. Over the last 10 years before the current year, departments had not seen an increase, except for the tax districts and Lake Norman. The apparatus line item is a little different, there is more apparatus expected this coming FY. There will be a carryover of $300,000 from the current year and approximately $30,000 for equipment. Greene said $996,000 was expended this year in apparatus replacement. Chairman Mallory said the individual departments have to get clearance to buy apparatus. Before now, the departments were operating without a contract and there was no common radio system. They had multiple complaints communications and there was no control over the appetite to buy apparatus. The new plan has signed contracts and an apparatus replacement schedule. Sheriff Commissioner Norman asked who cut the request for SROs. Jones made the recommendation to cut based on the school’s recommendation based on the number of SROs. Campbell said schools are looking at nurses and SAPs with some of the grant money they received. Cam Chairman Mallory said the issue is not so much on the spending side it is on the revenue side. Campbell noted that the Sheriff’s Office does not have access to the security cameras inside the schools if there is an incident. Each patrol car has WIFI capability to be able to pull up the camera, if there is an incident. 9 May 26 & 28, 2020 Chairman Mallory said the issue needs to be resolved. Campbell said the schools may be concerned about liability. Jones said County Attorney Lisa Valdez has tried to be the mediator but it is up to the law enforcement agency and the school system. Vice Chairman Bowles asked Campbell to let the Board know if there is anything they can assist with. Vice Chairman Bowles asked about federal equity sharing funds. Campbell said federal equity shared funds are more restrictive. Commissioner Robertson said the Sheriff feels there is a difference in starting salaries for his office and competing departments. Robertson said if the department is having difficulty with retaining entry-level people, those have to be looked at. Jail Jones noted the budget is a best guestimate because the new jail has not been in operation for a year. There is a request for in crease medical care, contracted services, two marked vehicle replacements, and two copier replacements. The request for an additional bailiff was cut and the elimination of the inmate reduction created a wash. Jones said the jail’s departmental budget would not be fine-tuned until there is a full year and a half of utilities and operating expenses. Chairman Mallory asked about the turnover in the entry-level jail positions. Bert Connolly said some are leaving for police departments. Chairman Mallory said they have unique job and for the pay, they could be doing something a lot easier. Dollars make the difference. Instead of giving everyone in the same pay grade a raise, focus in on people doing the hazardous duty. Connolly said officers who are sent to BLET sign a two-year agreement. Campbell said two deputies left this week for municipal departments. One was well on his way to being a supervisor. Campbell noted it is not just entry-level. A lot of different departments are getting hazard pay. Campbell shared that he understood the job is dangerous but is hoping to cover the merit as well in swoop. Troutman starts entry-level at $39,600 and $41,580 after six months probation; and Iredell is at $31,800 (around $40,108 including shift differential). Campbell said it is important to do what can be done to retain qualified officers. The County has had a reduced crime rate of 32% in a four-year period. Chairman Mallory said there is a systemic problem. It may be worse in the jail, but is present in more positions. A single merit raise will not solve the problem. There may be other issues within the department and there needs to be a thoroughly understood so the appropriate response can be made to address the issues. Commissioner Robertson asked Campbell for an amount that would fix the problem. Campbell did not have a number. 10 May 26 & 28, 2020 Connolly described what deputies go through. Eighty percent employees leave for the money and 10% because of the stress. Chairman Mallory said a one-time increase is not going to solve the problem long-term. Commissioner Robertson suggested Campbell narrow down the problems down. Commissioner Houpe added that those problems may be able to be fixed if a second wave of COVID-19 does not come through. Jones said if things do not pick up the conversation may turn to furloughs. The Board agreed to examine the Sheriff’s Office salaries. Rescue Squad Funding Jones said staff has a base allocation based on area square miles served and population. Those funds were based on that formula, but applied the apparatus replacement plan as well. Staff is trying to achieve a new methodology similar to the fire funding. Rescue is funded out of the general fund. Taylor said currently, 4/10 of a cent is dedicated rescue squads. This increases every year and goes directly to Iredell and North Iredell. Staff is recommending to dedicate 6/10 of a cent to rescue squads. Three tenths would be given to the rescue squads, split based on population and area square miles served; 2/10 would be given to Iredell and North Iredell; remaining 1/10 will be dedicated to equipment and apparatus. Greene will work with the departments similar to the way he did with the fire departments. Chairman Mallory said the rescue squads are being asked to do more. Commissioner Robertson said the fire departments are getting a lot more money. For a while, fire departments were hoping to get rescue certification for more funding. The rescue squads have unique abilities. Robertson warned about morale throughout the County. Vice Chairman Bowles said Iredell Rescue will be busy running Statesville’s alpha calls. Jones said the city sometimes chooses which calls they run. Vice Chairman Bowles asked why it is necessary to dedicate part of ad valorem to rescue. Jones said to achieve a standard formula. Commissioner Houpe asked if the funding can go in a fund and the Board approve the funding. Jones said yes. Chairman Mallory asked about the different percentages. Taylor said the percentages are based on population and square mileage. The Board asked staff to take another look at the formula and bring it back for consideration. COVID-19 Funds 11 May 26 & 28, 2020 Staff recommended creating a special revenue ordinance so it is not comingled with the general fund. The Board approved a special revenue ordinance by consent. Noted Changes Chairman Mallory said the County had $22,000 that was part of the Airport Manager’s salary. There was a collective unease among the Board. On Tuesday, the Board agreed to leave it in the budget but not allocate those funds. Mallory asked approval from the Board to allocate those funds to be used as operating expenses of the airport with an emphasis on marketing. It will send a message to the City that the airport success is important. Commissioner Robertson asked to add the caveat that this year be the last. MOTION by Commissioner Houpe to approve the generic operations grant for the Statesville Airport in January 2021 if funds are available. VOTING: Ayes – 4; Nays – 1 Jones went through the following changes:  Addition of $5,000 to Fort Dobbs  Addition of $3,000 to HealthReach  Modified the Airport Manager $22,000 in the Economic Development to allocate for airport operations and marketing, to be dispersed in January 2021, if funds are allowed.  Adjusted Sheriff’s budget to the 4 year actuals  Rework the Rescue budget Commissioner Robertson added that the Board is committed to examine the salary issues. Commissioner Houpe asked staff to see if the funds could be offset in the Sheriff’s departmental budget. Chairman Mallory thanked everyone for a successful budget workshop. MOTION by Commissioner Norman to adjourn at 5:50pm. The next regular meeting will be Tuesday, June 2, 2020 at 5pm in the Commissioners’ Meeting Room of the Iredell County Government Center. VOTING: Ayes – 5; Nays – 0