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HomeMy WebLinkAboutMinutes - 20090611 APPROVED 8/18/2009 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SERSSION June 11, 2009 7:00 p.m. The Orange County Board of Commissioners met for a budget work session on Tuesday, June 9, 2009 at 5:30 p.m. at the Link Government Services Center in Hillsborough, NC. COUNTY COMMISSIONERS PRESENT: Chair Valerie P. Foushee, and Commissioners Alice Gordon, Pam Hemminger, Barry Jacobs, Mike Nelson, Bernadette Pelissier, and Steve Yuhasz COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEYS PRESENT: 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) Chair Foushee asked if the Board would make an addition to the agenda— Interim County Manager Appointment Terms. Chair Foushee said that Mr. Frank Clifton has been chosen as Interim County Manager. The terms are outlined in the abstract. Mr. Clifton has served as County Manager in two other counties and as a City Manager. A motion was made by Commissioner Hemminger, seconded by Commissioner Pelissier to confirm the terms of appointment as outlined in the attachment document, appointing Frank Clifton as Interim County Manager Appointment Terms to the agenda. VOTE: UNANIMOUS 1. FY 2009-10 Annual Operating Budget Decision Items • County Pay and Compensation Decisions There is no cost-of-living or merit increases recommended in the budget, with the exception of law enforcement officers. The 401(k) contribution will be suspended only for next year. Voluntary leave without pay is also a consideration. Laura Blackmon reviewed the Retirement Incentive Program and gave the qualifications for this program. ORANGE COUNTY 2009 RETIREMENT INCENTIVE PROGRAM DESCRIPTION Orange County has developed a Retirement Incentive Program ("Program")" in an effort to achieve cost savings and provide eligible employees an opportunity to retire and receive a lump sum payment. 1. ELIGIBILITY REQUIREMENTS: To be eligible for the Retirement Incentive Program, participants must meet all requirements listed below: • Be a full-time or part-time permanent or provisional employee; • Meet the qualifications for retirement (reduced and unreduced) under the North Carolina Local Government Employees' Retirement System (NCLGERS); • Elect to retire with an effective date of July 1, August 1, September 1, or October 1, 2009; • Complete and sign the Program Election and Release Form ("Release") and submit to the Human Resources Department (eligible employees who voluntarily elect to participate in the Program are required to execute and submit the Retirement Incentive Program Election and Release Form to the Human Resources Department and have seven days from that date to revoke their Release and withdraw from the Program); • Have submitted a "Claiming Your Monthly Retirement Benefit" (Form 6) to NCLGERS prior to the end of the Program. Any employee who elects to participate in the Program, but fails to timely and properly comply with the above requirements, will not be eligible to participate in the Program. 2. TIME LIMITS APPLICABLE TO THE PROGRAM • June 17, 2009— Preliminary information communicating Board of County Commissioners' approval of the Program will be distributed to employees. • June 17-July 1, 2009—Additional information regarding the Program will be distributed to all employees. Election and Release Forms will be distributed to Program-eligible employees as identified by the County. • July 1, 2009-October 1, 2009—The effective dates of this Program. • July 1, 2009 - The first possible effective retirement date under this Program. • July 11, 2009 - Deadline for employees who believe they are eligible but did not receive the Election and Release Form to notify the Human Resources Department that they may be eligible. • July 13, 2009 - Information for"missed" eligible employees will be distributed. • July 7-15, 2009 - Retirement Information Sessions (see below) will be held. • September 30, 2009—The last possible date to apply for retirement to the NCLGERS for participation in this program. • October 1, 2009 - The last effective date for retirement under the Program. • January 1, 2010 —The last date that the County Manager may delay an employee's effective retirement date for operational purposes. However, the employee must have met the eligibility requirement and applied to NCLGERS by September 30, 2009. All required County Election and Release forms must be submitted by the end of the Election Period. This is a voluntary Program. Any employee who believes that he or she is being coerced or pressured to retire should report this to the Human Resources Director. Employees considering participation in this Program are advised to consult with an attorney prior to executing the Election and Release Form. 3. BENEFITS AVAILABLE UNDER THE PROGRAM • Eligible employees who elect to participate in the Program and comply with all requirements of the Program shall receive in consideration for their participation in the program an incentive payment based on their base annual salary and years of service in a lump sum as shown below. The lump-sum payment will be made within 30 days following the effective date of retirement and will be subject to the usual deductions. The lump sum payment is an incentive payment and will not be considered in the final compensation amount used for the calculation of retirement benefits as provided in the North Carolina Local Government Employees Retirement System guidelines. • Employees will receive any earned but unused vacation and, in addition, longevity pay prorated to the date of retirement. Vacation and prorated Longevity Pay will be in the employee's final pay check in accordance with County policies and procedures; these payments will be included in the calculation of the employee's retirement benefits. • An employee will receive applicable benefits as provided in the Orange County Personnel Ordinance and state and federal regulations. Incentive Amount The amount of an individual employee's incentive is determined by base annual salary as of the last day of employment and years of service as determined by the North Carolina Retirement System. NCLGERS Service # of Weeks Salary Credit Paid as Incentive 5 but less than 10 years 6 weeks 10 but less than 15 8 weeks years 15 but less than 20 10 weeks years 20 but less than 25 12 weeks years 25 but less than 30 14 weeks years 30 + years 16 weeks 4. RETIREMENT INFORMATION SESSIONS The Human Resources Department will offer several informational workshops in mid-July. All eligible employees who meet the Program requirements are encouraged to attend the workshops to receive information on a variety of related topics, including Retirement System procedures and Health Insurance. Spouses, domestic partners and significant others may attend these workshops with employees. Please see the proposed schedule of meetings. 5. RETIREMENT ELIGIBILITY The table below summarizes eligibility requirements. Please refer to the North Carolina Retirement System at www.myncretirement.com or 919-807-3050 for more detailed information. Unreduced Benefit Reduced Benefit Employees, Law Employees, Law excluding Law Enforcement excluding Enforcement Enforcement Officers (LEO) Law Officers Officers Enforcement (LEO) Officers Thirty (30) or Thirty (30) or At least age 50 At least age more years of more years of with at least 20 50 with 15 creditable creditable ser- years of years of service, vice, creditable creditable regardless of regardless of service as an age age service officer At least age 60 At least age 55 At least age 60 with at least 25 with 5 years of with at least 5 years of creditable creditable years of service service as an creditable officer service At least age 65 with at least 5 years of creditable service Sick leave may be applied to creditable service in accordance with the provisions of the North Carolina Local Governmental Employees' Retirement System. 6. RETIREMENT APPLICATION PROCESS The North Carolina Local Governmental Employees' Retirement System recommends that employees submit applications for retirement at least 90 to 120 days before the retirement effective date in order to timely receive initial retirement benefits to ensure timely payment of the first monthly benefit. Applications cannot be submitted more than 120 days prior to the retirement effective date. Employees who elect to participate in the Retirement Incentive Program and meet all program requirements are required to submit an application for retirement to the NCLGERS no later than one day prior to the chosen effective date. Eligible employees are encouraged to visit the Retirement System website prior to contacting the Human Resources Department for additional information. 7. REEMPLOYMENT An employee electing to participate in the Program shall not be eligible for reemployment with the County as a permanent or provisional employee. 8. MISCONDUCT/PERFORMANCE FAILURE Employees who elect to participate in the Program are still obliged to adhere to County and department policies and procedures. The election does not excuse an employee from complying with the County's conduct rules as well as disciplinary policies and procedures. 9. DELAYS FOR OPERATIONAL PURPOSES The County Manager has the authority to delay an employee's effective retirement date up to three months for operational purposes. However, the employee must have met the eligibility requirements and applied to the Retirement System according to the timelines specified. A delay will not reduce the incentive payment. There are 148 employees eligible for this benefit. Commissioner Yuhasz made reference to $900,000 in work force adjustments and asked what is included from Appendix A in this amount. Laura Blackmon said that the retirement program is about$375,000 savings, but this may depend upon how many employees take this program. The $375,000 is included in the $900,000. Other things include the hiring freeze, voluntary unpaid leave, health insurance increases, and the Archer Study. The $900,000 is a net amount because of the health insurance increases and the Archer Study. In answer to a question about the figure for voluntary unpaid leave, Human Resources Director Michael McGinnis said that it would be between $50,000-100,000 depending on who took the leave, and staff opted for the lower figure of$50,000 (p. 22 of Appendix A of budget document). Commissioner Hemminger asked if this retirement incentive plan had been tried before and Laura Blackmon said that staff looked at several counties and cities that have done retirement plans. This plan has never been done in Orange County before. Laura Blackmon said that she would not recommend that this be done again, and this is only being done this year as a cost-saving measure. Commissioner Gordon asked about the reclassifications proposed, including how many employees are lower-paid. Laura Blackmon said that employees go through an internal process and the Archer study decided that the proposed positions needed to be reclassified. New job descriptions are written on positions that need to be reclassified. The employees that are proposed have either taken on more responsibility or the job itself has completely changed and the employees would be compensated accordingly. At this time, those employees identified in the study are not being paid for the work that they do, but for the work that they were originally hired to do. Her recommendation is that the reclassifications be done as part of the budget each year. Commissioner Gordon said that the Board decided to look at the Archer Study in the fall 2009 as part of a work session. She asked how the proposed reclassifications were related to the study, and what they were asking the commissioners to approve now. The Archer Study had proposed a lot more classifications (pp. 18 and 19). She said that the Board has not even adopted the Archer Study and it is problematic to accept anything from the study when the Board has not even discussed it. Laura Blackmon said that her recommendation is to not adopt the expanded pay grades of the Archer Study because it was so expensive. The recommendation was to adopt the job descriptions, keep the County's pay grade, and do the reclassifications as part of the budget process. The modifications are just title changes. Commissioner Gordon said that she does not know what the budget implications are and the Board has never really discussed this. Commissioner Yuhasz said that there are at least four positions where the pay grade is going down. He asked if these were occupied positions and Laura Blackmon said yes. These employees are aware of this reclassification. Michael McGinnis said that in all of those cases there is not any adjustment to these employees' salaries. Commissioner Yuhasz said that doing this reclassification does not mean that the Board accepts the Archer Study. He wants to make that clear. Michael McGinnis said that the disparity between the $1,675,000 (p. 22 of Appendix A) and the $900,000 is the $500,000 for the 401(k) and the $275,000 for the health insurance increase. Commissioner Gordon made reference to Decision Point 1 on Attachment 3 and suggested revisiting the Employee Pay and Compensation decisions if needed when going through the budget. She pointed out that the last thing on the agenda is adoption of the annual operating budget. She said that this is not correct and that it should be approval of the intent to adopt the budget and not the actual adoption of the budget tonight. The Board was in agreement with the retirement plan. Service Delivery Changes as Included in the FY 2009-10 County Manager's Recommended Annual Operating Budget: Laura Blackmon said that the two main items for discussion were Solid Waste and the Library. Commissioner Yuhasz said that when the Board comes back in the fall, he wants to look at personal mileage and personal time versus County vehicles and mileage, etc. Commissioner Jacobs suggested having an item on the agenda for June 16th with a list of items the County Commissioners would like to talk about in the fall so that there can be agreement. Commissioner Nelson respectfully disagreed because the list of proposed discussion items is a lot and there is already a rolling calendar that has so many items on it. Laura Blackmon said that the Board should spend some time in the very beginning of the fall identifying, out of the whole list, what the Board will focus on in the next year. Commissioner Jacobs said that he does not care how it is done, but he just knows that many times in the budget processes, the County Commissioners have told staff to follow up with items and no one remembers them afterwards. Commissioner Nelson suggested referring the list to staff to schedule as a discussion item on the rolling list for the fall. Solid Waste: Solid Waste Operations Manager Paul Spire went through his memo, which was Attachment 1. The two scenarios for keeping the Solid Waste Convenience Centers open on Sundays are M-W-F-Sat-Sun or M-T-F-Sat-Sun. These scenarios require that the employees would be required to work every Saturday and would have alternating Sundays off. The first scenario would mean that employees would never have two concurrent days off. Commissioner Yuhasz asked which scenario would work better for the system and the employees and Paul Spire said Scenario 2. Commissioner Jacobs verified that the Bradshaw Quarry Road SWCC would be closing. The citizens will be notified. Laura Blackmon said that the original departmental recommendation still remains closing the convenience centers on Sundays. Commissioner Yuhasz said that Sunday is the day where there is the greatest volume, and he would support Scenario 2 even though it will cost an additional $34,000. Commissioner Jacobs agreed with Commissioner Yuhasz and said that this is about the customers first and Sunday the convenience centers are heavily used. Commissioner Pelissier said that she preferred the staff's original recommendation with closing the convenience centers on Sunday. She has concerns about the staff that would be impacted because when the employees took their jobs, they did not agree to work every Saturday. Chair Foushee said that she has a hard time expecting employees to work every weekend. A motion was made by Commissioner Pelissier, seconded by Commissioner Hemminger to follow the original staff recommendation on the Solid Waste Convenience Centers (this includes closing on Sundays). VOTE: Ayes, 5; Nays, 2 (Commissioner Jacobs and Commissioner Yuhasz) Library: Donna Coffey went through the options: Option 1: Keep the main library open for 50 hours a week and allow all branches to stay open. Option 2: Allow branches to stay open and the main library to be open for 54 hours a week. There were proposals for exchanges to allow these hours. These exchanges include: - Reduce BOCC travel by 50% $12,000 - Reduce BOCC contingency $30,000 - Reduce FY 2009-10 Appropriation to DSS Safety Net (carry forward Critical Needs Reserve Appropriation from FY 2008-09) $120,000-150,000 - Reduce Blackwood Farm @ New Hope PAYG Capital Appropriation Based on New Cost Projections from ERCD $59,260 - Defer Observation Well Network PAYG Capital Appropriation $24,870 - Postpone Videostreaming/Podcasting $50,000 Laura Blackmon said that there is $74,000 in the budget for a consultant for the Comprehensive Plan, and this could be postponed in exchange for the videostreaming. Commissioner Gordon said that she would not want to postpone the Comprehensive Plan nor the videostreaming. She said that she would like to keep both. Commissioner Jacobs said that he has no interest in postponing the Comprehensive Plan or podcasting. He asked about$50,000 for future library facilities and it was answered that this is a reserve for a library branch in southwest Orange County. Commissioner Nelson said that he understands that this $50,000 is for capital and is at some point supposed to provide a library for southwest Orange County, but this proposal is continuing to provide a library for southwest Orange County. He said that it seems reasonable to postpone putting aside money for a library, when money is being spent to keep the library open right now. Commissioner Nelson said that the County needs to use pay as you go funds more. He said that he had hoped that the County would have sold the surplus properties this year. He proposed setting up a reserve account for the proposed money to sell surplus properties and use the money for the southwest library and for the schools, especially for renovations for the older schools. Commissioner Hemminger said that she does not want to postpone the Videostreaming or the Comprehensive Plan. She also has a concern about the higher number of people that is needed for the new library. Lucinda Munger said that there is only one service point now at the library and it does not work now, and it will not work in the new library. She said that they will have a need to cover all service points in the new library. The new building has four separate desks on two separate floors. There must be staff to cover these areas. She said that the number of staff is still below what really should be there and below the State average. Commissioner Hemminger asked about the four hour difference and what this really gets the citizens. Lucinda Munger said that this would be for the evening hours to stay open after 7:00 p.m. She said that the library has increased in the last two years in double digits in almost every category of patrons. Commissioner Jacobs verified that, based on the current scenario, the branch libraries will remain the same with the hours. Commissioner Jacobs said that he thinks it is wrong to keep the branch libraries open the same amount of time and cut the main library hours. He made reference to page 2-21 and that there is a little more than $2 million in overtime, non- permanent personnel, and seasonal personnel. He suggested cutting this by 10%. He would like this issue on the list for the fall to discuss. He said that, at some point, the County needs to talk about serving the customers who are paying the taxes. He is not comfortable taking the main library back to the minimum number of hours. He asked Lucinda Munger about the cost for hours open. Chair Foushee said that she would like to know what a 10% reduction in the overtime, temporary personnel, and seasonal personnel would amount to. Laura Blackmon said that the staff was directed to cut 10% and they did cut many of these items. To compound this issue, vacant positions are not being filled and new positions are not being created. She said that this is putting a lot of pressure on departments. Donna Coffey said that the Sheriff depends on non-permanent employees for mandated services. Commissioner Yuhasz said that the County is opening a new main library and it needs to provide a better level of service than the old library. He would like to discuss opening the main library for 64 hours. He wants to find additional money because this is supposed to be a better service. Commissioner Nelson agreed. Commissioner Yuhasz suggested using the capital funds that are not necessarily needed for this year. He said that some parts of the Link Government Services Center could be done in this next fiscal year for$175,000 rather than $575,000. Commissioner Gordon said that the Board said that it was going to stay at a revenue neutral rate, and the Manager recommended 54 hours, and she thinks that the Board should stay with this and consider keeping the library open more hours next year. A motion was made by Commissioner Jacobs, seconded by Commissioner Yuhasz to reduce overtime, seasonal, and temporary personnel by 5% overall and apply the savings to keep the main library open for 62 hours a week. VOTE: Ayes, 2 (Commissioner Yuhasz and Commissioner Jacobs); Nays, 5 MOTION FAILED Commissioner Pelissier asked about the DSS safety net and the implications and Donna Coffey said that it would still be funded. These monies are currently available in the 2008-09 budget. It was carried forward from last year and not much was spent last year. These monies can be carried forward to next year and fund the safety net by $145,000. This would free up the $150,000 that is currently included in the Manager's Recommended Budget for next year. Commissioner Pelissier said that if monies are taken from pay as you go capital, then it has to be found from the operational funds the next fiscal year to keep it at the same level. She said that if this is increased continually, she is worried because the future is so unknown. She said that the increase in service for the library is not just hours, but what you get when the library is open. She said that the new library will clearly have a much better level of service. She does not think that it is all about the hours. A motion was made by Commissioner Hemminger, seconded by Commissioner Pelissier to have the central library open for 54 hours a week. (There was never a vote on this motion) Commissioner Gordon asked to talk through the options. Chair Foushee said that they are looking at variations on options 1 and 2. Laura Blackmon said that option 2 has 54 hours, but it will be $50,000 short because of not postponing the Videostreaming. Donna Coffey suggested deferring the $50,000 in pay as you go capital for the future southwest library. Commissioner Nelson said that he would support this. The Board agreed to have two motions on this issue. A motion was made by Commissioner Nelson, seconded by Commissioner Gordon to establish a reserve fund to which the proceeds from the sales of surplus properties will go, and that the reserve account will be used for County and school needs (60/40), with the County needs being the southwest library branch and the school needs being renovations to older schools. Commissioner Jacobs asked to amend the motion to create a capital fund for a dental clinic at the Southern Human Services Center and get rid of the lease at Carr Mill Mall. Commissioner Nelson did not accept the amendment. He said that the money that will be in this account is not that much. He did appreciate the sentiment. VOTE: Ayes, 6; No, 1 (Commissioner Jacobs) A motion was made by Commissioner Nelson, seconded by Commissioner Hemminger to accept Option 2 including Proposed Exchanges to Allow for Increased Funding for Library Services, except taking $50,000 from pay as you go capital for the Videostreaming. VOTE: UNANIMOUS The Board agreed to add the Dental clinic/Carr Mill Mall discussion to the fall list. Commissioner Gordon agreed with Commissioner Jacobs about the need for constructing a dental clinic at the Southern Human Services Center, instead of leasing space. Chair Foushee said that she does not like transferring money from capital to operating. Funding for Chapel Hill Carrboro City Schools and Orange County Schools: Commissioner Jacobs said that he had asked the Clerk to find the original debt management policy from 1998. He said that this ought to be in future budget books. He said that the 13-15% level of debt is not a cap, but it is a target. He read from the policy, "The County will strive to maintain its annual debt service at a level no greater than 13-15%." He said that the Board is not violating its own policy. This item was put on the list to discuss in the fall. A motion was made by Commissioner Yuhasz, seconded by Commissioner Nelson to fund the schools at 48.1% of the General Fund. Commissioner Gordon asked if this means that the Board will follow the Manager's Recommended Budget for this item and the County Commissioners agreed. VOTE: Ayes, 6; No, 1 (Commissioner Hemminger) Tax Rate Decisions: i. Ad Valorem Tax A motion was made by Commissioner Nelson, seconded by Commissioner Jacobs to set the ad valorem tax rate at 85.8 cents per hundred dollar valuation. VOTE: UNANIMOUS Commissioner Jacobs said that this is the first time in four revaluations that Orange County has stayed with the revenue neutral rate. Commissioner Gordon said that it is important to point out that the County has cut more than $5 million from the general fund budget. ii. Chapel Hill Carrboro City Schools Special District Tax A motion was made by Commissioner Nelson, seconded by Commissioner Gordon to set the Chapel Hill-Carrboro City Schools Special District Tax at 18.84 cents per hundred dollar valuation. Commissioner Jacobs verified that funding the Carrboro High arts wing will mean that the payments will not start until next fiscal year. There is no impact for this fiscal year. VOTE: UNANIMOUS iii. Fire District Tax Rates Laura Blackmon said that there were two requests for increases from Eno and White Cross. Commissioner Gordon asked why the other districts did not ask for increases. Donna Coffey said that the others did not request increases because some had not needed it and others did not request any because of the Board of County Commissioners' guidelines. Commissioner Yuhasz said that both requests were in the nature of an emergency and he would be willing to increase the rate this year and go back to a neutral rate next year. A motion was made by Commissioner Yuhasz, seconded by Commissioner Hemminger to increase the tax rates for Eno (4.99 cents) and White Cross (5.05 cents) fire departments for this year, and next fiscal year, roll the tax rates back to the revenue neutral rate. Commissioner Gordon said that the numbers need to be specified. Donna Coffey said that the numbers could be put in the budget ordinance. VOTE: UNANIMOUS Commissioner Jacobs said that this is the only place the Board has deviated from the positions taken five months ago. He thinks that this is significant. He said that the problems that Eno identified that caused it to ask for an increase are the reasons why the Fire, Rescue, and Emergency Services Study are so important. Donna Coffey said that one item not on the list is the fee increases in the Manager's Recommended Budget. A motion was made by Commissioner Pelissier, seconded by Commissioner Nelson to accept the fee changes in the Manager's Recommended Budget. Commissioner Jacobs said that the Board usually gets a list of fees and they are approved all at once. Donna Coffey said that this will be done on Tuesday night. The Board agreed to ask the staff for the entire list. VOTE: UNANIMOUS Note: The budget decisions made tonight were approval of intent to adopt these provisions in the budget. The budget adoption will occur on Tuesday night (June 16th) Commissioner Nelson thanked all of the staff for the work done this year because it was such a hard year. He was particularly impressed with the benefits survey and how employees were willing to take a hit. He thanked Donna Coffey and Laura Blackmon in particular. Chair Foushee said that Commissioner Nelson speaks for the Board. Adjourn: A motion was made by Commissioner Nelson, seconded by Commissioner Jacobs to adjourn the meeting at 9:20 pm. VOTE: UNANIMOUS Valerie Foushee, Chair Donna S. Baker, CMC Clerk to the Board