HomeMy WebLinkAboutMinutes 09-14-2010 1
2 APPROVED11/4/2010
3
4 MINUTES
5 ORANGE COUNTY BOARD OF COMMISSIONERS
6 BUDGET WORK SESSION
7 September 14, 2010
8 7:00 p.m.
9
10
11
12 The Orange County Board of Commissioners met for a budget work session on Tuesday,
13 September 14, 2010 at 7:00 p.m. at the Link Government Services Center in Hillsborough,
14 N.C.
15
16 COUNTY COMMISSIONERS PRESENT: Chair Valerie P. Foushee, and Commissioners Alice
17 Gordon, Pam Hemminger, Barry Jacobs, Mike Nelson, Bernadette Pelissier, and Steve Yuhasz
18 COUNTY COMMISSIONERS ABSENT:
19 COUNTY ATTORNEYS PRESENT:
20 COUNTY STAFF PRESENT: County Manager Frank Clifton and Clerk to the Board Donna S.
21 Baker (All other staff inembers will be identified appropriately below).
22
23
24 1. Capital Investment Plan
25 Financial Services Director Clarence Grier said that staff has worked on this plan and
26 they now have some recommendations in the policy and the debt management plan that he
27 would like to go over. Also, they are proposing to change the Capital Improvement Plan to a
28 five-year plan versus a ten-year plan and changing the format of the document.
29 Michael Talbert summarized the changes.
30
31
32 Orange County is evolving into what will be the new normal. As we make this transition we are
33 recommending changes to both the format and policies included in the CIP. Outlined below are
34 the highlights of those changes:
35
36 CIP Recommended Format Changes:
37
38 1. Migrating back to a 5 year plan from the existing 10 year CIP.
39
40 2. Changing the presentation date of the CIP to the Board to January.
41
42 3. Including County Capital, Solid Waste, and Schools Capital into one CIP.
43
44 4. Including a schedule of Active County Capital Projects.
45
46 5. Including Capital Reserve Balances.
47
48 6. Including a Debt Service and Debt Capacity Schedule.
49
1
2
3 He made reference to page 20, which is a document format for a Capital Investment
4 Plan. The numbers were not correct, but were there for just an example of the format. He
5 asked if the County Commissioners liked this format.
6 Commissioner Pelissier asked about enterprise funds and solid waste projects. She
7 asked if the solid waste appropriations and the solid waste fund balance would be equal
8 throughout the whole thing and Michael Talbert said that this is correct. Commissioner
9 Pelissier said that it would be good to add a footnote that this is the case.
10 Commissioner Jacobs suggested putting an asterisk next to the solid waste fund for
11 citizens and say that it is an enterprise fund that is considered separately. This is self-funded.
12 Commissioner Yuhasz suggested separating out the enterprise funds within the
13 document so that it will not be so confusing.
14 Commissioner Gordon asked if there were any other fund balances besides ones that
15 were listed and Michael Talbert said that when it is listed as a revenue source under fund
16 balance, that is fund balance appropriated.
17 Commissioner Gordon suggested adding a few words like, "appropriated fund balance,"
18 so that it is clearer.
19 Commissioner Nelson arrived at 7:16 PM.
20 Commissioner Gordon said that the reason the County went to a ten-year plan is
21 because of the Schools Adequate Public Facilities Ordinance and the County is supposed to
22 plan how it is going to fund the County capital projects related to schools. If there is not a ten-
23 year plan, it is too difficult to plan for SAPFO.
24 Frank Clifton suggested creating another column for 6-10 years out for schools rather
25 than have everything go out ten years.
26 Commissioner Gordon said that part of negotiating SAPFO was that Orange County
27 would project the needs over ten years and the CIP addressed that. She hopes that one of
28 these summaries is committed to the SAPFO.
29 Commissioner Yuhasz said that it makes sense to put the 6-10 year SAPFO projections
30 as supplemental notes in the CIP but he does not think that it needs to be included as
31 indicated by Commissioner Gordon, because it may distort the CIP as a whole.
32 Frank Clifton said that a supplemental footnote could indicate the schedule for the
33 SAPFO for years 6-10.
34 Commissioner Gordon said that at some point, the various partners should be informed
35 about this process, especially the schools.
36 Michael Talbert continued with his presentation of the format (page 21).
37 Commissioner Jacobs pointed out that there is still not a strategic plan for Information
38 Technology and it has been requested for several years. The County Commissioners need a
39 more formal and transparent plan so they can make some decisions about their future needs
40 for Information Technology.
41 Commissioner Yuhasz agreed with Commissioner Jacobs about developing an
42 Information Technology Plan.
43 Presentation continued.
44 On page 23, Michael Talbert said that he would add "Enterprise Fund" to the top of this
45 page so that everyone knows that it is not part of the regular operating budget.
46 Frank Clifton said that there will probably be ongoing maintenance costs when the
47 landfill closes.
1 Commissioner Jacobs said that there is supposed to be a revenue source from the
2 agreement with UNC regarding the methane gas recovery. Frank Clifton said that he will
3 review the contracts about this. There will be a revenue source from this.
4 Page 24 is the schedule for the Schools Capital Projects Summary. This takes each
5 project in their ten-year plan and lists it out for the first five years. It is listed by system. Page
6 25 has the revenue sources tied into the school projects.
7 Michael Talbert asked if the Board wanted to see unfunded projects listed individually
8 and the Board agreed.
9 Commissioner Yuhasz suggested requesting this same format from the two school
10 systems. Staff will ask about this.
11 Commissioner Jacobs suggested putting this issue on the joint agenda with the two
12 school boards.
13 Presentation continued.
14 The Board expressed approval of the format for page 37.
15 Michael Talbert made reference to the Emergency Management Center and said that
16 the budget was for$325,000 and there was only $142,215 in the revenue, but the County only
17 spent $142,215. He said that the fact that there is a revenue shortfall is not hurting the County
18 in this case because it was not spent all at once. This project will be recommended to be
19 closed out.
20 Commissioner Pelissier said that she would like a column added that indicates when a
21 project started.
22 Commissioner Gordon said that the Board discussed listing unfunded projects, and it
23 would be helpful to list these so that they are not forgotten.
24 Michael Talbert said that many of these projects have had changes over the years and
25 this could make the columns cumbersome.
26 Frank Clifton said that they could put a column for 6+ years and then a supplemental
27 sheet that could list these unfunded projects.
28 Michael Talbert made reference to page 39, which has real data — capital reserve
29 balances as of June 30, 2010. The top half of the page is for the County Capital Reserve
30 Fund and the bottom half is the School Capital Reserve Fund.
31 Michael Talbert asked how often the Board would like this report and Chair Foushee
32 suggested getting this quarterly.
33 Frank Clifton suggested putting a link on the website also.
34 Michael Talbert made reference to page 40 — County Debt Service and Debt Capacity.
35 This also had real data. He said that the debt service policy is that the County will have no
36 more than 15% annual debt service as a percent of the General Fund Fund Balance. This
37 year, it is at 16.33%. Next year, there is a potential to go down to 14.7% if no more debt is
38 issued.
39 Michael Talbert said that in 2010-11, there is anticipation of a $2.3 million debt
40 issuance coming later this year. This is new debt for the Sheriff's radios approved in the CIP,
41 for the Link Center renovations, and for the telephone system.
42 The next line is the qualified school bonds and the $4 million is just a best guess.
43 The next line is Elementary School #11 and this would be a debt issuance for 2011-12
44 with debt service coming through in 2012-13. This could change, but it is where it stands at
45 this moment.
46 Michael Talbert said that as a rule of thumb, if you take the debt service of $2,730,000
47 projected and multiply it by 11, you get $30 million. In terms of the actual debt service, what
48 this will buy the County would be roughly $30 million. This is at today's interest rates with a
49 15-year repayment schedule.
1
2 The Board then discussed the two policies.
3
4 Capital Fund Policy Recommended Changes:
5 The draft policy was on page 9. The policy includes 60% for schools and 40% for the
6 County.
7
8
9 Capital Funding Policy Recommended Changes:
10
11 1. Changing to a 5 year plan from a 10 year CIP.
12
13 2. Raising the minimum amount to be included in the plan to $100,000.
14
15 3. Eliminating Public School Building Capital Funds as a revenue source.
16
17 4. Changing the procedure for the budget and use of Lottery Proceeds.
18
19 5. Eliminating the Construction Management section.
20
21 6. Eliminating Equipment and Vehicle Financing from the Recurring Capital section.
22
23
24 Commissioner Hemminger arrived at 8:07 PM.
25 Frank Clifton said that there was a policy about four cents. Commissioner Jacobs said
26 this relates to the 60/40 policy and the fact that the County spends way more on schools than
27 itself.
28 Frank Clifton recommended taking this language out about the 3 cents and 1 cent
29 because there is still the 60/40 policy. The Board agreed.
30
31 Michael Talbert made reference to Lottery Proceeds and said that the way the schools
32 can use the funds has been changed. The County will budget lottery proceeds as the
33 revenues are distributed by the State each quarter.
34 Frank Clifton said that Superintendents have run into a problem using the lottery
35 proceeds because of the red tape involved. He said that they discussed having the County
36 receive the funds, obligate the funds to payment of debt, and allocate the funds budgeted for
37 debt payments to capital projects in schools. This reduces the paperwork process. This would
38 be an accounting procedure only.
39 Commissioner Hemminger asked how this would be made known and documented for
40 future reference. Frank Clifton said that it would be added to the policy.
41 Michael Talbert made reference to the policy on page 10 and the wording starts at
42 about the middle of the paragraph, and he read, "annually, either district can request that the
43 County dedicate lottery proceeds to repay debt service, and the County will substitute pay-as-
44 you-go funding to expedite the approval process for the capital projects and the school capital
45 improvement plan."
46 Commissioner Gordon suggested wording this in a way so that the State cannot take
47 the funds back.
48 Michael Talbert continued with the presentation about the changes.
1 Commissioner Jacobs made reference to the student membership numbers and asked
2 if the language could say, "as of that day." Michael Talbert said that this language could be
3 included.
4 Discussion ensued on which numbers to use, November or January.
5 Commissioner Jacobs asked that staff give two alternatives — November DPI numbers
6 or something else — and give the rationale for each. He would also like input from the schools
7 on this.
8 The Board agreed to add this to the agenda of the joint meeting with the school boards.
9
10 Chair Foushee asked where in the budget process that recurring capital would be
11 addressed. Michael Talbert said that it is a separate line item within the operating budget and
12 there will continue to be a 60/40 split.
13 Commissioner Hemminger suggested having a statement that the recurring capital will
14 be addressed in the operating budget.
15
16
17 Debt Management Policy Recommended Changes:
18
19 1. Changing the Undesignated Fund Balance section to include a recommended
20 undesignated fund balance range of between 15% and 20% percent.
21
22 2. Updating the language in the Capital Reserve Fund section.
23
24 3. Updating the County's Bond Ratings section.
25
26 4. Changing to a 5-year plan from a 10-year CIP
27
28 5. Adding language that includes an annual review of the CIP.
29
30
31 Commissioner Yuhasz made reference to the old policy, item `d', Construction or
32 Expansion of Sanitary Sewage System, and said that he would like this to be expanded to
33 include all public utilities.
34
35 Commissioner Jacobs said that the way#13 was and is written and the "strive to
36 maintain," is that it is a target. It is ideal. He said that the fund balance should also be a
37 target.
38 Discussion ensued on the 8% fund balance "requirement" of the State.
39 Frank Clifton said that it is important for the County to have financially secure policies in
40 place to protect it.
41 Clarence Grier said that the County's fund balance is currently at 11.3%.
42 Commissioner Jacobs suggested setting a target at 17% as recommended as the best
43 practice of the Government Finance Officer's Association.
44 The Board agreed.
45
46 2. FY 2010/2011 Library Services Updates
47 Frank Clifton said that this was to follow up on the assignment that the Board gave to
48 the staff before the summer break.
1 Library Services Director Lucinda Munger summarized the information. She went
2 through a two-page charge, which was in response to a request for information from
3 Commissioner Gordon.
4
5
6
7 Southern Branch Library
8 1) In June 2010, the BOCC directed staff to begin evaluating possible sites for a Southern
9 Branch Library for Orange County. Staff has met with real estate professionals to
10 review real estate in Southern Orange for both short-tem leasing and / or permanent
11 long-term options for a facility. The leased facilities were viewed as a short term
12 possibility in order to establish the presence of a full service library in southern Orange
13 County; until such time that a capital investment plan in a larger long-term facility was
14 possible. All these possible options assume the closing of the Cybrary and Carrboro
15 McDougle and merging staff, technology, and materials.
16
17 Lonq-Term Site:
18
19 Current Options:
20 1) Acquire a Site within Carrboro: The cost to purchase land reviewed was between
21 $600,000 - $1,000,000, depending on location and acreage.
22 2) Site on Existing County-Owned Land: Utilize part of Twin Creeks Parks located off of
23 86 and Eubanks road for the development of a Library.
24
25 3) Re-use/Adapt Existing County Facility: Evaluate the Skills Development Center (SDC)
26 located on Franklin Street as either an intermediate or long-term location for a Southern
27 Branch Library. In the event that this location is chosen for a long-term location, it may be
28 possible to relocate most (if not all) functions currently in the Skills Development Center to
29 other locations found suitable for the services they deliver and then work to create a
30 permanent library function at that site.
31
32 Short-Term Site:
33 Current Options:
34 1) Lease Space: Lease available rental space (3 — 5,000 square feet) to establish a library
35 presence in Southern Orange. These facilities rent for$20 — 30/ sq. ft per month or
36 $60,000 - $150,000 per year. There is also a possibility of renting ground floor commercial
37 space in the Town of Carrboro.
38
39 2)Adapt Portion of Skills Development Center: As referenced in long-term options,
40 coordinate closely with Social Services and Durham Technical Community College to utilize
41 approximately 3,000 square feet of the Skills Development Center. Preliminary review
42 indicates this could be achieved by renovating and managing the back portion of the facility
43 for Library requirements while not displacing Social Services program supports or
44 disrupting classroom demand by Durham Technical Community College
45
46 Rural Service Delivery/Options
47
48 During the FY 10-11 Budget Process, the BOCC voted reluctantly to close the Cedar Grove
49 Branch Library by August 2010 due to low patron usage/high cost. In response, the Library
1 Director and staff have spent the last two months reviewing possible options for outreach and
2 library service opportunities to the rural communities in Orange County. Through this review
3 and conversations with Planning, staff recognizes that "rural" can apply not just to Cedar Grove
4 but to other outlying unincorporated areas and service projections could theoretically
5 encompass their unique needs as well.
6
7 1) Develop Separate Branch Libraries to Serve Rural Communities; i.e., Cedar Grove, Efland,
8 White Cross, Caldwell, etc: There is the option to build individual "bricks and mortar" facilities.
9 The first step would be to identify current vacant locations and/ or build a new facility. In
10 addition, there would be ongoing annual operational costs associated with staffing and
11 providing a full service branch for each location. In 2009 the 23, 500 sq. feet Main Library
12 was constructed and furnished for$6.521 million. Using this cost, another new facility would
13 equate to an investment of $277.52 per square foot. This figure does not include the annual
14 personnel / operational costs for Main which are currently $1,260,820.
15
16 The 2004 Library Services Task Force Report recommended new facilities plan through 2024.
17 The plan identified the following locations and staff has provided updated construction costs.
18
19 • Central Orange— recommended 65,000 sf (actual 23,500 sf&
20 $6.521)
21 • Regional Branch in Carrboro— 25,000 sf estimated$6.938 million
22 • Efland Cheeks Township— 10,000 sf estimated$2.775 million
23 • Cedar Grove Branch to be monitored and expand to 7,000 sf estimated$1,942 million
24
25 To operate another full service branch of 20 —23,000 sf, exclusive of central administrative
26 and technical services, would require annual support of $964,000. The Cedar Grove Branch,
27 which was 1,200 sf, required annual personnel, operational and facilities support of $245,000.
28
29 It should also be noted that the 23,000 sq. ft. Mebane Library, located 11.5 miles from
30 Hillsborough was constructed and opened in 2006. This library serves the Mebane area and a
31 portion of the Efland Cheeks Township.
32
33 2) Purchase and Deploy Bookmobiles to Serve Rural Areas: Rural communities are regularly
34 served by bookmobiles that include several public Internet stations. These types of units
35 require an initial investment of at least $285,000 and annual personnel / operational support of
36 $105,000. The unit would be deployed on a weekly schedule to stop and stay a certain
37 number of hours at a specific location each week, allowing for consistency and continuity.
38 Technologies will always an issue when working within rural Orange County, as most current
39 types of equipment needed to support internet access on these mobile units requires a strong
40 signal, similar to a cell phone.
41
42 3) Purchase and Deploy Library Service Kiosks: The Library Director and staff also evaluated
43 the Kiosk model of delivering library service and two models are listed within the report.
44 Preliminary evaluations of these two systems suggested that kiosks are more suited to urban
45 areas with high traffic locations such as malls and subways.
46
47 4) Strenqthen Collaboration and Reciprocal Relationships with Neiqhborinq Town and County
48 Libraries: The Library Director would also like to further explore our relationship with the
49 libraries in Durham and Alamance, particularly Mebane. Currently, the Alamance County
1 Libraries do not charge a fee for Orange County citizens to utilize their libraries. The Director
2 will begin a dialogue with both Durham and Alamance on possible collaborations for
3 programming, as well as reciprocal borrowing arrangements.
4
5 Hyconeechee Regional Library
6
7 This past July the Library Director met with the State Librarian, Mary Boone and Head of
8 Library Development Jennifer Pratt. The State Library is in the process of updating their
9 administrative rules and regulations governing Regional Libraries. Hyconeechee Regional
10 Library, which is comprised of Orange, Caswell and Person County Libraries, is one of 14
11 regional libraries in North Carolina. Currently, Hyconeechee is the only regional system that
12 does not have a full-time Library Director and its own Fiscal Agent. Under the proposed
13 changes, Hyconeechee's arrangement would not be allowed under changes proposed by the
14 State. The report attached outlines the financial impact of State Aid for all three (3) counties
15 and more detailed analysis as it relates directly to Orange County. If Orange County decides to
16 withdraw from the regional system, a transition plan could be established to `hold harmless'
17 Caswell and Person while they seek sustainable alternatives for the future. If authorized by
18 the General Assembly, updated Administrative Rules and Regulations could become effective
19 in FY2011-12 with a minimum one year transition period.
20
21 Interoperability
22
23 The Library Director was also asked to review Interoperability between the Chapel Hill Public
24 Library and the Orange County Library System. The report attached presents options for steps
25 toward Interoperability as evaluated from only the perspective of the Orange County Library.
26 The Library Director will be working with the Chapel Hill Library Director and respective staff
27 toward presenting a more thorough, joint evaluation from both systems by November 2012.
28
29
30 FINANCIAL IMPACT:
31
32 Southern Branch Library—
33 • Long Term: If a site for a Southern Branch Library is purchased, acreage has been
34 found from $685,000 — $1,000,000, or the Board could utilize a portion of Twin Creeks
35 where infrastructure (sewer and water) has already been established. Building cost for
36 a Southern Library will be approximately $5,540,000 and annual operating costs of
37 $964,000.
38
39 • Short Term: If a short term location for the Southern Library is decided, then facilities
40 rent for$20 — 30/ sq. ft per month or$60,000 - $150,000 per year and annual operating
41 costs are estimated to be $417,425. If the Board determines that partnering with the
42 Durham Technical Community College and utilizing a small area (3,000 sf) of the Skills
43 Development Center is the short tem option, there will be capital investment to upfit the
44 location and provide furnishings and technology for library services.
45
46 • Rural Service Options: To implement the Mobile Unit will require a capital investment
47 of $285,000, with annual operational support of $105,000.
48
1 • Hyconeechee Regional Library: In choosing to withdraw from the Region, the Library
2 would request the BOCC assume an additional $28,803 in operating expenses
3 presently covered by Orange serving as the fiscal and administrative agent for the
4 Regional system.
5
6
7
8
9 RECOMMENDATION(S): The Manager recommends that the Board consider the following:
10
11 a) Short Term: Determine if the Board would like the Library to partner with Durham
12 Technical Community College and DSS to utilize approx. 3,000 square feet of the Skills
13 Development Center or rent/ lease ground floor commercial space. This step would
14 allow both the Cybrary and Carrboro McDougle to close and staff and materials to be
15 utilized in a short-term site. Preliminary review indicates that the partnership with DTCC
16 could be achieved by renovating and managing the back portion of the facility for
17 Library requirements while not displacing Social Services program supports or
18 disrupting classroom demand by Durham Technical Community College, and / or
19 b) Long Term: Determine if the Board would like to identify a long-term site for the
20 Southern Branch Library, by using a portion of Twin Creeks Park, re-use / adapt Skills
21 Development Center, or purchasing another site to allow for a 20,000 square foot
22 facility. It may be possible to relocate most (if not all) functions currently in the Skills
23 Development Center to other locations found suitable for the services they deliver. The
24 Southern Branch Library would be a full service library, open the same number of hours
25 as Main. Again, both the Cybrary and Carrboro McDougle would close and staff and
26 materials to be utilized in this site.
27 c) Rural Service Options: Determine if the Board would be interested in the County
28 pursuing individual sites or a Mobile Library as part of a future Capital Investment plan.
29 d) Hyconeechee: Indicate intention, based upon present information and impending
30 change to State law, to withdraw from the Hyconeechee Regional Library System and
31 assume increased Library operating expense.
32 e) Interoperability: Confirm direction to Library staff to continue and work with the
33 Chapel Hill Library to assess technical and human components and costs associated
34 with interoperability by November 2012.
35
36
37 Frank Clifton said that they could talk with the local fire departments to have these
38 proposed book mobiles park at their site for one day a week.
39
40 Lucinda Munger made reference to interoperability and said that there is currently
41 $10,000 in the budget geared toward an interoperability study implementation or the like. Over
42 the summer, the staff did a form of internal OCP interoperability. For example, in Carrboro at
43 McDougle, all of the new materials that have come in are being double catalogued in Polaris
44 and Sagebrush. The reason is for when they move to a new facility, the thing that will take the
45 longest is the conversion of materials from one catalog to another.
46 Frank Clifton said that he wanted to compliment the library staff for an in-depth analysis
47 of this issue.
48
1 Regarding long-term interoperability, Lucinda Munger said that it would make more
2 sense to build a new system together and not become a branch of Chapel Hill's system. If the
3 desire is to have a true shared system, the most cost-effective system would be to design it
4 with UNC and Chapel Hill on a true single catalog.
5 Lucinda Munger said that she has been working on a strategic plan and the outline of
6 the meetings she has had are in the report.
7 Commissioner Gordon made reference to interoperability and asked why the plan
8 would be developed by 2012 and not 2011. Lucinda Munger said that was a date proposed
9 because Chapel Hill is planning on moving out of their facility for renovations and then back
10 again.
11 Chair Foushee asked the Board for any suggestions in the short term for direction to
12 staff.
13 Commissioner Hemminger asked Lucinda Munger about the Regional Hyconeechee
14 Council and the new regulations and Lucinda Munger said that this will be discussed at the
15 November Board meeting. The partnering counties are aware of this.
16 Frank Clifton said that if the County chooses to leave the Council, then he suggested
17 that the Board of County Commissioners may want to propose to help the remaining partners
18 with the loss of their revenue for a period of time.
19 Commissioner Hemminger said that it sounds like the best alternative to leave the
20 council.
21 Commissioner Nelson said that he appreciates the direction they are going in. He does
22 not think the County's future lies in the Hyconeechee System. He is comfortable with the
23 interoperability process. Regarding rural service options, he thinks that bookmobiles are
24 reasonable. Regarding the short-term options, he verified that the $60,000-150,000 operating
25 expenses were not budgeted.
26 Frank Clifton said that if the sales tax passes, then some of these funds can be used
27 for transitioning.
28 Commissioner Nelson said that the County has been fortunate to have had two
29 facilities donated, but now the County will have to make up some of that money ($60,000 to
30 $150,000).
31 Frank Clifton said that Durham Tech will begin to move some of its programs from the
32 Skills Development Center to the Hillsborough site and this would create more space at the
33 Skills Development Center. He would suggest working on this option as an interim solution
34 because it would be a lot cheaper than a storefront area.
35 Commissioner Nelson said that he does not have enough data yet to discuss options to
36 pursue in the long term. For the short-term, the County may be able to purchase land with the
37 sales tax funds. The Board of County Commissioners needs to decide how it is going to
38 address this issue — urban versus suburban library and the criteria.
39 Commissioner Jacobs said that in the short-term, there may be more space to rent in
40 the Century Center and move the McDougle library there. He would like to stick to the criterion
41 that was discussed and agreed to with Carrboro elected officials to have a downtown library
42 that is on public transit and is walkable. He would like to revisit the square footage of the
43 proposed library— maybe 8,000 square feet because it is a branch library. As far as the
44 Hyconeechee Library, the County Commissioners should write a letter to the other County
45 Commissioners in the other counties to let them know what is happening. He still thinks that,
46 as a short-term measure, that the Skills Development Center may be the cheapest short-term
47 option.
48 Commissioner Jacobs said that he is not convinced that a bookmobile would take the
49 place of a real branch library in the rural areas, but he sees the advantage. He said that there
50 is something to be said for having a place that people can go to. Regarding interoperability, he
1 said that there are benefits to the Chapel Hill users and he would like to list those. Lucinda
2 Munger said that this would have to come from the Chapel Hill Librarian. Commissioner
3 Jacobs said that it should at least be mentioned that there is a benefit to Chapel Hill.
4 Commissioner Gordon said that it sounds like the Hyconeechee Library should be a
5 separate library system. Regarding the rural areas, it sounds like internet service may be the
6 main issue. Regarding the short-term, she would like to have some criteria for a southwest
7 library. She made reference to the Skills Development Center and said that she visited this
8 site. She said that it is really not big enough to be used for a library branch. She thinks that
9 the County should use this facility for economic development and jobs. She suggested having
10 signs at the Cybrary leading people to the Skills Development Center for job searches.
11 Commissioner Pelissier said that her concern is that they need to look at the whole
12 context. She would like to know where they will get the most "bang for the buck" in library
13 services. She does not want to commit to the rural areas yet. Regarding walkability, she does
14 not think that the Skills Development Center is a very walkable place. There is also a parking
15 issue.
16 Chair Foushee said she has several concerns about the Skills Development Center, but
17 the biggest issue for her is parking. She agreed with Commissioner Gordon on focusing the
18 Skills Development Center on economic development and jobs. She said that she is hesitant
19 to put another branch location in Chapel Hill.
20 Commissioner Nelson said that it is important in Carrboro to have a suburban library for
21 people that drive and an urban library for people that walk. He said that when there is a facility
22 that people can walk to in downtown Carrboro, people will walk to it and use it.
23 Commissioner Yuhasz said that he would like to look at using public transportation to
24 the rural parts of the County into town. Regarding the southwest library, he thinks that it
25 should also serve people in Bingham Township who otherwise would have to drive to
26 Hillsborough. There has to be adequate parking for this. Whatever is done, it will have to be
27 done short-term because there is no money to build a permanent site.
28 Commissioner Hemminger said that she would like to combine the Cybrary and
29 Mcdougle but she does not want to cram them into a tight space like the SDC. She would
30 rather rent for now so that the two can be combined.
31 Frank Clifton said that the staff has given the Board some feasible approaches. They
32 do not expect a particular decision right now.
33 The Board agreed with not pursuing the Skills Development Center for a library branch
34 at this time. The Board a/so agreed to not pursue the Twin Creeks property.
35 Commissioner Nelson asked if the Board agreed with asking the staff to continue to
36 look at property and bring back anything that seems appropriate and to set a time for the
37 Board to discuss the criteria issues. The Board agreed.
38 Commissioner Jacobs suggested asking Carrboro about rental space at the Century
39 Center. The Board agreed.
40 Frank Clifton suggested setting another meeting to discuss proposed parcels.
41 Commissioner Jacobs said that any criteria should include a more realistic square
42 footage for the southwest branch.
43
44
45 Chair Foushee reviewed directions to staff:
46 • Discontinue looking at the Skills Development Center and the Twin Creeks Park area
47 as a library site
48 • Continue to look at other site possibilities and also rental properties in and around
49 Carrboro
1 • Develop criteria for a freestanding southwest Orange library for the Board to discuss
2 • Set a meeting to discuss this criteria and to look at parcels/properties
3 • Options — continue to look at rural accessibility— increasing public transportation,
4 mobile operations, etc.
5
6 Frank Clifton asked the Board for a square footage for the southwest library.
7 Commissioner Yuhasz asked the Library Services Director and Lucinda Munger said
8 that it depends on the area that is being served.
9 The Board agreed to look at the larger size for the southwest branch.
10
11 3. Employee Benefits Preliminary Recommendations and Update
12 Human Resources Director Michael McGinnis said that the employees are thankful for
13 the Board of County Commissioners maintaining the benefits package. He summarized the
14 following items:
15
16 Health Care Reform Legislation of 2010
17 National Health Care Reform was enacted in March 2010, with different elements becoming
18 effective immediately and others in the next few years. Attachment 1 outlines the impact of
19 Health Care Reform on the Orange County health care plans. Because the County's health
20 insurance already provides many of the benefits which are mandated for employers, very few
21 changes will be required immediately. Of benefit to Orange County, Health Care Reform will
22 provide a benefit to Orange County by providing a reimbursement for 80% of certain medical
23 costs through the Early Retiree Reimbursement Program. Reimbursement is available for
24 claims beginning June 1, 2010 for pre-65 retirees covered by the County Health Plan, and
25 must be used to offset actual increases in the cost of health insurance. Based on the County's
26 past claims, it is estimated that the County may be eligible to receive approximately $150,000
27 over the next 18 months. Staff is preparing the application for this program.
28
29 Broker Services
30 To assist the County in plan design and cost containment measures related to benefits for
31 2011 the County decided to utilize the services of a benefits consultant. Mark III was selected
32 after evaluating three brokers because of several factors including their extensive experience
33 with local governments. They have agreed to provide these services at no consultant fees for
34 2011. Any compensation for providing these services for the first year will be derived from the
35 potential enrollment of voluntary benefits as outlined in Attachment 6 below. Future fees,
36 based on number of employees, will not exceed $2.00 per employee per month (approximately
37 $20,000). The savings to our health care plan costs are expected to exceed that of their
38 services, and will be particularly valuable as the County considers and possible implementation
39 of a self-funded health insurance plan. They will assist with supplemental benefits to County
40 employees, assist with the integration of claims information with plan design and wellness
41 activities, and provide Open Enrollment services.
42
43 2011 Benefit Plans
44 Moving forward with plan implementation for 2011, the following benefits are being considered:
45
46 1. Health Insurance
47 The County provides two fully-insured health insurance plans for employees, and pays the
48 employee portion of coverage, as well as a subsidy for dependent coverage. An overview of
49 the current plans, plan participation, and initial recommendations are described in Attachment
1 2. The County received 2011 renewal rates from the North Carolina Association of County
2 Commissioners (NCACC) for our two fully insured health insurance plans at a total increase of
3 6.5%. This amount is within the 7% increase budgeted for FY 2010-11.
4 Renewal information, including a potential self-funding option, is provided on Attachment 3,
5 which also includes a comparison of fully-insured funding vs. self-insured funding. Staff is
6 closely analyzing potential cost savings of self funding and will provide a recommendation
7 shortly. The County has budgeted $6,338,000 for health insurance in Fiscal Year 2010-11.
8
9 2. Dental Insurance
10 The County provides a self-insured dental plan through Delta Dental of North Carolina. The
11 County pays all costs for employee coverage: claims and an administrative fee to Delta
12 Dental. Dental claims are paid according to a Table of Allowances (TOA) unique to Orange
13 County. In both 2009 and 2010, the County increased its levels of reimbursement for claims.
14 The County has budgeted $251,600 for dental insurance in Fiscal Year 2010-11. An overview
15 of the dental plan and suggested enhancements are shown on Attachment 4.
16
17 3. Flexible Compensation Plan
18 The County provides a Section 125 Flexible Compensation Plan administered by Tucker
19 Administrators. Attachment 5 shows participation and required changes for the Plan Year
20 beginning December 1, 2010. This Plan consists of a) tax sheltering of health and dental
21 premiums and b) two Flexible Spending Accounts (a medical spending account and
22 dependent/child care spending account). The Spending Accounts enable employees to
23 contribute money to a separate account. Employees save money because no income or
24 Social Security taxes are deducted from on contributions made to the Flexible Spending
25 Account(s). The County pays the administrative costs when employees choose to contribute
26 to a Flexible Spending Account. The County has budgeted $15,600 for these administrative
27 costs in Fiscal Year 2010-11. As part of their services, Mark III will be assuming these
28 administrative costs.
29
30 4. Employee Assistance Program (EAP)
31 Magellan Behavioral Health provides the County's EAP for County employees and their
32 dependents. The EAP provides several services including confidential assessment and
33 counseling services, 24/7 emergency services, and legal consultation. The EAP is a
34 complement to services provided through the County Health Plan at no cost to employees or
35 their dependents. Both employees and the County save when employees use the EAP
36 instead of the County health insurance.
37
38 We requested and have received a two year contract renewal, January 1, 2011-December 31,
39 2012 at the same rate as the 2009-2010 contract. The County has budgeted $15,500 for the
40 Employee Assistance Program in Fiscal Year 2010-11.
41
42 5. Life/Accidental Death and Dismemberment Insurance
43 The County provides an employer-paid life insurance benefit at the employee's annual salary
44 (rounded to the next thousand dollars) with a maximum benefit of $50,000. Our three-year
45 contract with MetLife ends December 2010. We successfully negotiated a new three year
46 contract beginning January 2011 to December 2013 at the same cost (22.5 cents for every
47 $1,000 of coverage for life and accidental death and dismemberment insurance) as the current
48 contract. Employees are able to purchase additional term life insurance through this Plan.
1 The plan continues to be administered through Mark III Employee Benefits. The County has
2 budgeted $96,600 for health insurance in Fiscal Year 2010-11.
3
4 6. Supplemental Benefits
5 Orange County allows employees to purchase supplemental insurance benefits such as short
6 term disability, cancer and hospitalization insurance through payroll deduction. Attachment 6
7 provides utilization information and initial suggestions related to enhancing County
8 supplemental insurance benefits.
9
10 7. Employee Leave
11 Permanent, full-time County employees are currently provided leave in the following manner:
12
Type of Leave Accrual Rate
Sick Leave 8 hours per month throughout employment
Vacation Leave Monthly accrual based on years of service for each month the employee is in pay
status for %2 of the month, ranging from 96 to 230.4 hours a year
Petty Leave 1.17 hours (70 minutes) per month; unused leave dissolves on June 30 of each year
Personal Leave 2 days per year received in January; unused leave dissolves on December 31 of
each year (prorated for new employees based on 6 months)
13
14 As the County continues to move forward with automated time-keeping and self service
15 programs, changes to leave accruals are recommended in order to increase efficiencies.
16 These changes, as well as a summary of leave accruals provided by other jurisdictions are
17 shown in Attachment 7.
18
19 Employee salaries are budgeted based on regularly scheduled work hours, regardless of
20 whether that salary is for actual work, holidays, or paid leave. Only when employees separate
21 from employment and are paid for vacation accruals (to a maximum of 240 hours) do the
22 actual hours accrued become an expense to the County.
23
24 Employee benefits and compensation account for a large portion of the cost of providing
25 services to the public. A key factor to employee retention is that the County remains
26 competitive in employee compensation and benefits while also remaining aware of both
27 current and past employment benefit expenses upon budget. Additionally, in establishing a
28 benefit there must be a consideration of the financial impacts now, and the sustainability of
29 such benefit going forward. Providing a benefit and then withdrawing it has substantial
30 negative influences on employee morale.
31
32
33 Commissioner Hemminger asked about the personal and petty leave and Frank Clifton
34 clarified this.
35 Commissioner Yuhasz asked how this would be tracked. Michael McGinnis said that it
36 would all be handled electronically eventually. It is possible for it to be minute by minute.
37 Commissioner Gordon asked for clarification on self-insured versus County-insured and
38 stop loss and Michael McGinnis clarified this.
39 Staff will be coming back on October 5th with a more formal presentation and additional
40 information.
41 Commissioner Jacobs asked for more information about the education benefit and
42 whether it is used. Michael McGinnis said that it is $600 and every year it is used to the
1 maximum. Commissioner Jacobs asked if it was enough. He also suggested reinvesting in
2 employee health and clinical opportunities for employees on County property.
3 The Board expressed support for these recommendations.
4
5 4. Assembly of Governments Meetinqs-Discussion of Future Meetinqs/Schedulinq
6 Chair Foushee said that there have been some unofficial discussions on this issue. It
7 was raised at the Chair/Mayor's meeting that they should look at how to conduct these
8 meetings.
9 Commissioner Gordon said that she would like to explore individual meetings with
10 Chapel Hill and Carrboro, in addition to the ones that are held with Mebane and Hillsborough.
11 Commissioner Jacobs said that he is in favor of ineeting once with each jurisdiction
12 independently and once annually with all of them. Since the JPA public hearings almost never
13 take place, they could consider calling it something else.
14 Commissioner Pelissier said that she would like to keep the Assembly of Governments
15 on schedule and then cancel it as needed.
16 Chair Foushee said that she would like to have either the JPA or the AOG and not
17 both. She would like to have at least one annually with each Town.
18 Donna Baker said that she is almost done with the calendar, and she would need to
19 squeeze in these extra meetings.
20 Chair Foushee suggested having one AOG meeting, one with the municipalities, and if
21 additional meetings are needed, then they can be set.
22 Donna Baker will check with the Joint Planning Agreement to see the requirements for
23 meeting.
24 A motion was made by Commissioner Gordon, seconded by Commissioner Pelissier to
25 adjourn the meeting at 11:06 PM.
26 VOTE: UNANIMOUS
27
28 Valerie Foushee, Chair
29
30 Donna S. Baker, CMC
31 Clerk to the Board