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HomeMy WebLinkAboutMinutes - 20090324 APPROVED 6/2/2009 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS WORK SESSION March 24, 2009 7:00 p.m. The Orange County Board of Commissioners met for a Work Session on Tuesday, March 24, 2009 at 7:00 p.m. at the Link Government Services Center in Hillsborough, NC. COUNTY COMMISSIONERS PRESENT: Chair Valerie P. Foushee, Vice-Chair Mike Nelson and Commissioners Alice Gordon, Pam Hemminger, Barry Jacobs, Bernadette Pelissier, and Steve Yuhasz COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEYS PRESENT: Geof Gledhill COUNTY STAFF PRESENT: County Manager Laura Blackmon, Assistant County Managers Willie Best and Gwen Harvey, and Clerk to the Board Donna S. Baker (All other staff members will be identified appropriately below) NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. ii Appointments — New a. Affordable Housing Advisory Board — New Appointment A motion was made by Commissioner Hemminger, seconded by Commissioner Jacobs to appoint Patsy Barbee to the Affordable Housing Advisory Board with a partial term ending 6/30/2011. VOTE: UNANIMOUS b. Agricultural Preservation Board — New Appointments A motion was made by Commissioner Pelissier, seconded by Commissioner Jacobs to appoint Joe Thompson and Tony Kleese to the Agricultural Preservation Board. Mr. Thompson will be serving a full term ending 6/30/2012 and Mr. Kleese will be serving a partial term ending 6/30/2011. VOTE: UNANIMOUS c. Commission for Women — New Appointment A motion was made by Commissioner Hemminger, seconded by Commissioner Pelissier to appoint Carolina Alzuru to the Commission for Women with a term expiring 6/30/2011. VOTE: UNANIMOUS A motion was made by Commissioner Jacobs, seconded by Commissioner Yuhasz to appoint Sharon McDaniel for the Hillsborough Township position (#2) and Donna Bickford for the At-Large position (#3). Both terms would expire 6/30/2010. VOTE: UNANIMOUS d. Equalization and Review Board — New Appointments A motion was made by Commissioner Jacobs, seconded by Commissioner Yuhasz to appoint Jerry Kruter as a regular member to the E&R Board. VOTE: UNANIMOUS A motion was made by Commissioner Gordon, seconded by Commissioner Yuhasz to appoint Jane Sparks as a regular member to the E&R Board. VOTE: UNANIMOUS A motion was made by Commissioner Gordon, seconded by Commissioner Jacobs to appoint Reg Morgan as a regular member to the E&R Board. VOTE: UNANIMOUS A motion was made by Commissioner Hemminger, seconded by Commissioner Gordon to appoint Janet Sparks as Chair of the E&R Board for 2009. VOTE: UNANIMOUS A motion was made by Commissioner Hemminger seconded by Commissioner Pelissier to appoint the following as alternate members to the E&R Board: Tom Heffner Pam Davis Bill Crowther Paul Snow Margaret Brown Arthur St. John Tim Kepley Barbara Levine William Barrows John Caswell Jeffrey Kigan VOTE: UNANIMOUS e. Orange County Planning Board — New Appointments A motion was made by Commissioner Gordon to appoint Calvin Davis to the Little River Township position on the Planning Board. There was no second and the motion failed. A motion was made by Commissioner Jacobs, seconded by Commissioner Yuhasz to appoint Earl McKee to the Little River Township position with a term expiring 3/31/2012. VOTE: Ayes, 6; No, 1 (Commissioner Gordon) A motion was made by Commissioner Gordon, seconded by Commissioner Nelson to appoint Dr. May Becker to the Chapel Hill Township position. VOTE: Ayes, 2 (Commissioner Gordon and Commissioner Nelson); Nays, 5 Commissioner Gordon suggested that the Board re-advertise the Chapel Hill Township position since there were not that many applicants on the applicant interest list from the Chapel Hill Township. A motion was made by Commissioner Jacobs, seconded by Commissioner Yuhasz to move Samantha Cabe to the Chapel Hill Township Position and appoint Pete Hallenbeck to the At-Large Position. VOTE: Ayes, 5; Nays, 2 (Commissioner Nelson and Commissioner Gordon); one abstain (Commissioner Hemminger—which is a yes vote) 2009 Revaluation and Its Impact on County's FY 2009-10 Budget Laura Blackmon said that there was a request for additional information on this issue. She said that there needs to be a determination on which way to go with this before the budget can be done. She pointed out each attachment. John Smith made reference to Attachment 2 and said that the average increase is about 24% for the revaluation. Commissioner Yuhasz asked for an explanation of revenue neutral in tax land. John Smith said that it means that the County receives the same amount of budgeted revenues this year as it did last year. Commissioner Yuhasz said that he was thinking that revenue neutral meant that the County would collect as much money this year with the revaluation as it would have collected this year without the revaluation. Laura Blackmon said that it is the same as last year's. Since some components fluctuate, other categories have to be increased to make up the difference. Commissioner Jacobs said that there may have to be another way to refer to revenue neutral for residents to make it more understandable because residents think that their tax bills are going to be the same, but they are not. Commissioner Gordon asked what revenue neutral applies to and it was answered real and personal taxes. She said that this needed to be explained to the residents. Tax Collector Jo Roberson spoke about the rate of tax collection at this time. The collections at this time are lower than they were this time last year. Commissioner Jacobs said that 24% is a moving target now and the majority of taxpayers are going to have a tax increase. John Smith agreed with this. Commissioner Jacobs said that the language needs to be clearer. Commissioner Yuhasz said that the County is going to have the same amount of money as it did last year but a resident's money is not going to be the same, and the revenue neutral does not translate into anything for the resident. He said that this needs to be addressed. Commissioner Pelissier said that she has probably told people the wrong information since she herself did not quite understand this issue. Commissioner Jacobs said that the residents did not lose school construction funds or lottery funds, but the County did. He said that the County Commissioners represent the entity that is the County. He said that the Governor is raising teachers' salaries and the County has to match this and there are unfunded mandates for health, safety, welfare, and education. Commissioner Yuhasz said that the County Commissioners also represent the taxpayers and he thinks that the County should work really hard to spend less money because the people who are paying taxes are making less money. Laura Blackmon said that in the past the Board increases taxes because of unfunded mandates, etc. Commissioner Gordon said that if the property tax is going to have to take the entire burden of the increases, then the taxes will go up unless we make cuts. Last year the budget was $183 million and this year it will probably be $174 million. It is her understanding the County intends to cut$8 million and maybe more. John Smith made reference to Attachment 3, which shows the counties conducting a revaluation this year, the number of parcels, etc. Commissioner Jacobs asked if there was a way to make the appeal process more user- friendly. John Smith said that he has always expressed this concern when he talks with people about the appeals process and it should be made open and transparent. Commissioner Jacobs suggested having a way to reach out to people, especially those with properties that are increasing more than 100%. Commissioner Gordon said that she went on the internet and, although a citizen would have to know how to get documentation from the website, the form is fairly easy to fill out and is clear. Commissioner Jacobs said that it would not be unreasonable to contact the people whose properties have increased more than 100% (approximately 240 parcels). Commissioner Gordon said that a resident told her that on their 11-lot street, the values went up everywhere from 5%, 15%, 20%, and 34-38%. She said that the question is why there is a neighborhood with such drastic differences. John Smith said that when they analyze a neighborhood, they have to figure which sales have been improved or renovated, and then they have to look at everything else. Commissioner Jacobs asked about bulk mailing rates for a one-page letter. Jo Roberson said that it costs the tax office $6,400 for 5,600 one-page letters with an envelope and a return envelope. This includes paper costs, mail costs, production cost, return envelopes, etc. Geof Gledhill said that regularly the County approves late applications for Homestead Exemptions and these can be made up until December 31st. This same rule is for the Circuit Breaker Exemptions. Commissioner Jacobs said that for the last three years, an insert has been put into the tax bill about the Homestead Exemption. He said that similar information could be put in the tax bill about appeals and the Circuit Breaker Exemption. Donna Coffey made reference to Attachment 4 and said that this was information about four scenarios for the revaluation. The dotted line is the current tax rate and budget. Approved FY 2008-09 Budget: - Tax rate is 99.8 cents - Budgeted revenue from real, personal, motor vehicles, and public utilities is $126.9 million - Total County revenue— all sources including property tax$183.0 million Scenario 1 — Real property values increased due to 2009 revaluation, all properties assessed revenue neutral tax rate: - Tax rate would be 86.0 cents - Budgeted revenue would be $126.9 million - Total County revenue would be $174.3 million - Shortfall from FY 2008-09 budget would be $8.7 million Scenario 2— Real property values increased due to 2009 revaluation, real property owners whose property increased 24% or less (compared to 2008 valuations) "held harmless": - Tax rate would be 80.5 cents - Budgeted revenue would be $118.8 million - Total County revenue would be $166.3 million - Shortfall from FY 2008-09 budget would be $16.7 million Scenario 3— Real property values unchanged from 2008 values, property tax rate remains at FY 2008-09 approved rate of 99.8 cents per$100: - Tax rate would be 99.8 cents - Budgeted revenue would be $120.6 million - Total County revenue would be $168.0 million - Shortfall from FY 2008-09 budget would be $15.0 million Scenario 4— Real property values unchanged from 2008 values, total property tax received by County remains at FY 2008-09 approved amount of$126.9 million: - Tax rate would be 104.7 cents - Budgeted revenue would be $126.9 million - Total County revenue would be $174.3 million - Shortfall from FY 2008-09 budget would be $8.7 million. Donna Coffey explained each scenario in detail. Discussion ensued about the public utilities considerations about revaluation. Commissioner Jacobs asked about the biggest decrease in per pupil allocation for the schools and Donna Coffey said that it decreased by about$1 in 1991. Laura Blackmon said that there are some issues that need consensus. They are listed as recommendations for the Board to consider. The Manager recommends that: - The Board not rescind the 2009 Revaluation - The Board agree to implement a revenue neutral tax rate for FY 2009-10 for all taxpayers - The Board apply the same principles for all taxing districts including the County wide ad valorem tax, Chapel Hill-Carrboro City Schools district tax, and fire district taxes - The Board agree the funding target for schools for FY 2009-10 is 48.1% of County revenues Commissioner Hemminger said that there is statement about a "revenue neutral tax for all taxpayers" and she suggested taking off"all taxpayers" because it is confusing. Commissioner Yuhasz said that he does agree that the County should look at a funding target for the schools of 48.1%. He suggested looking at the potential for deeper cuts to bring the tax rate below revenue neutral. Commissioner Jacobs agreed with Commissioner Yuhasz about the 48.1% for the school funding and most of the principles for all taxing districts, except if the legislature dictates that it is only going to pay for one school system. This will be another problem that will have to be addressed with the Chapel Hill-Carrboro District Tax. He would like to flag this, that under those circumstances, the County is not lying but that it may have to be adjusted based on an act of the State legislature. He tends to agree that the County should try and get close to "tax neutral" and not revenue neutral. Commissioner Jacobs made reference to the advisory letter to Alamance County and asked if this changed the County Attorney's opinion on the four-year schedule for revaluations and Geof Gledhill said no. Geof Gledhill said that Alamance County is on an eight-year revaluation schedule. He said that there is nothing in the law that allows the Alamance County to postpone a revaluation in the eighth year. Orange County's situation is different. He said that Orange County has made its own timeline, and it has to comply with this. Commissioner Jacobs asked Geof Gledhill why the County Commissioners should listen to him because other attorneys are giving different advice on this. Geof Gledhill said that he researched the problem and outlined his opinion. He reviewed this outline with the lawyer of the School of Government whose specialty is property tax, who agreed with his analysis in every respect but one. He also spoke to another lawyer that is respected with regard to property tax law in North Carolina who also concurred. He said that he heard anecdotally that the North Carolina Department of Revenue also concurs with this opinion. Commissioner Hemminger said that there seems to be no relief if the revaluation were rescinded. She would like to see another scenario of going lower, somewhere between 80-86 cents. She suggested doing an 83-cent scenario. She agreed with most of the recommendations and said that she would like to hear from both the fire districts and the school districts before making any unilateral decision. Commissioner Pelissier said that there is no such thing as a tax neutral rate. She would like the Board to consider a dollar amount that might be palatable instead of doing exercises. Commissioner Nelson made reference to the second bullet and suggested saying that the Board agreed to implement a tax rate that is no higher than revenue neutral. Commissioner Gordon agreed with the wording "no higher than revenue neutral tax rate." Commissioner Jacobs would like to reach out to the 10% at the top of the revaluation and ask staff to send a letter to them. The Board agreed to send a letter to those property owners with an increase in revaluations from 40% and up. The letter would have information about appealing, with the other side explaining the Circuit Breaker and Homestead Exemptions. John Smith will take out the sale properties. The following are the Board's recommendations: • Board will not rescind 2009 revaluation. • Board agreed the tax rate will be no higher than the revenue neutral tax rate for fiscal year 2009-10. (While not specifically part of the resolution, it was understood that the manager would bring back budget recommendations for possible additional cuts to allow the tax rate to be set below the revenue neutral rate.) • Board agreed to apply the same principles for all taxing districts, including the countywide ad valorem rate, CHCCS district tax and fire district taxes, after hearing from each entity. • The Board agreed the funding target for schools for FY 2009-10 will be 48.1% of county revenues. • For properties that saw a revaluation increase of more than 40%, the staff will send letters to residents explaining possible exemptions and the appeal process. Commissioner Yuhasz said that implicit in bullet#2 is that the Manager is to look at rates that would be lower and what the cuts would be. Commissioner Pelissier asked Laura Blackmon if she would consider doing furloughs. Laura Blackmon said that the question is who would be picked for furlough and it is difficult to single people out. Commissioner Nelson said that he would be interested in hearing from the employees and what they might prefer— layoffs, furloughs, or pay cuts. Chair Foushee suggested that the Employee Consortium look at this issue. Laura Blackmon said that the Consortium is participating in this discussion and they suggested doing an anonymous survey. Commissioner Gordon said that she wants to figure out how to explain this revaluation process to people. It will require a concerted effort. She suggested having staff come up with a way to get this information out to people universally and how to explain it. Commissioner Nelson said that it seems simple but the County does not do a good job of communicating complicated issues. He suggested that staff start with explaining the tax rate reduction with bullet points. The first bullet point could be, "the tax rate will be reduced to 86 cents." Commissioner Pelissier said that the big message should be the fact that the County Commissioners have said that they will spend less money than last year. Commissioner Jacobs said that he is in favor of use value, but there are people who are involved in challenging what the County is doing and persist in talking about how farmers are being taxed into oblivion, and this is not true. The use value system is a great way to insulate agriculture and forestry. The Board agreed that it should review the communication to the 40% and above as well as to the general public before those pieces go out. Adjournment A motion was made by Commissioner Jacobs, seconded by Commissioner Hemminger to adjourn the meeting at 9:23 pm. VOTE: UNANIMOUS