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HomeMy WebLinkAboutMinutes 09-23-2010 APPROVED 11/4/2010 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS CHAPEL HILL-CARRBORO BOARD OF EDUCATION ORANGE COUNTY BOARD OF EDUCATION WORK SESSION September 23, 2010 7:00 p.m. The Orange County Board of Commissioners met for a joint session with the Chapel Hill- Carrboro Board of Education and the Orange County Board of Education on Thursday, September 23, 2010 at 7:00 p.m. at the Southern Human Services Center in Chapel Hill, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Valerie P. Foushee, and Commissioners Alice M. Gordon, Barry Jacobs, Pam Hemminger, Bernadette Pelissier, and Steve Yuhasz COUNTY COMMISSIONERS ABSENT: Mike Nelson COUNTY ATTORNEYS PRESENT: John Roberts COUNTY STAFF PRESENT: County Manager Frank Clifton, 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) ORANGE COUNTY BOARD OF EDUCATION MEMBERS PRESENT: Chair Tony McKnight and Board Members Donna Coffey, Eddie Eubanks, Anne Medenbleck, and Debbie Piscitelli, and Superintendent Patrick Rhodes was also present. ORANGE COUNTY BOARD OF EDUCATION MEMBERS ABSENT: Brenda Stephens and Steve Halkiotis CHAPEL HILL-CARRBORO CITY SCHOOL BOARD OF EDUCATION MEMBERS PRESENT: Chair Mike Kelly, Vice-Chair Jamezetta Bedford, and Board Members Mia Day Burroughs, Gregory McElveen, Michelle Brownstein, and Annetta Streater, and Superintendent Neil Pedersen was also present. CHAPEL HILL-CARRBORO CITY SCHOOL BOARD OF EDUCATION MEMBERS ABSENT: Introductions were made. 1. Overview of the Article 46 (One-Quarter cent) Sales Tax Referendum Education Strategy Frank Clifton said that at the end of the discussion it would be appropriate for the County Commissioners to indicate on what basis the funding will be obligated for the school systems to clarify any misconceptions. Assistant County Manager Gwen Harvey said that an internal team is working on the referendum. This is comprised of the County Manager, two Assistant County Managers, Financial Services Director, Deputy Financial Services Director, Deputy Clerk to the Board, Chief Information Officer, County Attorney, and department directors who are mostly impacted as far as County government support— EMS Director, Library Services Director, and Economic Development Director. This team has met through the past few weeks and they have engaged the Jennings Firm to assist them with this education campaign. It will be a multi-faceted campaign and they are all working diligently to educate the public on this '/4-cent sales tax referendum. She asked that everyone avail themselves to engage with civic groups, write letters to the editor, etc. to help educate the public about this referendum. She pointed out a copy of what appeared in the Daily Tarheel. Frank Clifton said that the Chapel Hill-Carrboro Chamber of Commerce has endorsed this referendum. He said that staff is looking at printing out 100,000 handouts that will be placed in all County buildings. According to law the County can only educate the public about the issues, but elected officials can take a public stand, without using public funds. CHCCS Board Chair Mike Kelly said that the school board has already adopted a resolution in support of this referendum. He asked how the allocation would relate to the 48.1% that the school systems get now. Frank Clifton said that these funds are going to be tracked in a different fund and would not be part of the General Fund. Mike Kelly asked for more clarity on this issue. Frank Clifton said that the 48.1% would remain in the County's General Fund, but the 42.5% is specific sales tax revenue. Mike Kelly said that it is important for the public to understand that the total allocation available to the County that will be allocated to the schools will decrease slightly. Chair Foushee said that this is not necessarily a true statement if this is related to aggregate numbers. Frank Clifton said that he would hope that all elected officials in this County would speak to the public in a clear voice that this is an important opportunity for the future of Orange County. If the County is successful in economic development and the tax base expands, then schools and everyone else will benefit. In the end, the public needs to know that the elected officials of the County will do what is best for the County, schools, economic development, etc. These are tough economic times and they are going to be asking the public to tax themselves; but they need to stress moving forward in difficult times instead of how to slice a pie they have not even baked yet. Jamezetta Bedford asked how the funds would be divided between the two school systems from this tax and Chair Foushee said that the Board of County Commissioners have not had that discussion yet, but it would like to hear from the school systems on this issue. Jamezetta Bedford said that a per-pupil basis would be appropriate. Debbie Piscetelli said that she would appreciate a conversation with the Board of County Commissioners about this. She does not want the needs of the Orange County School system to go unnoticed. There was a referendum awhile back for OCS and it was voted down. She is not trying to discount the needs of the CHCCS, but there are many needs for the OCS. She would appreciate having a discussion about this. Commissioner Yuhasz said that the County Commissioners have talked about this sales tax being identified to use for older schools. He suggested looking at how many students in both districts are in older schools and distribute the sales tax revenue from that. Mike Kelly asked how an older school would be defined. Commissioner Yuhasz said that this should be part of the discussion after the tax is approved. Michelle Brownstein said that it would be helpful if there is going to be a united voice, to flesh out what is going to happen in the beginning. One of the open ended things is what happens after five years in terms of the allocation. Chair Foushee said that the Board of County Commissioners did not determine how these funds would be spent after the initial five years. She said that part of their discussions about older schools included how the school districts identify the older schools and their needs as submitted through the CIP process. Frank Clifton read the resolution to the school boards. He said that the issue was to have the school boards and the County Commissioners concur on the needs and the school boards would bring projects forward. Mia Day Burroughs said that they need to look at the reality—early voting begins in three weeks, and this is a time to get past the history of both boards. She said that all of them are Orange County residents. She said that this is a tough sell and the more they tussle now the less they will have in the long run for the schools, economic development, libraries, and EMS. Commissioner Pelissier said that she would like to come up with a general framework and solution. She is not sure that she wants this to focus just on older schools because technology is also on the list. Commissioner Jacobs agreed with Ms. Burroughs and the Manager. He said that the County Commissioners have already made a statement as to how it can be used, but all of the details can be worked out later and in good faith. He will not go backwards. He said that the answer will be known in six weeks and the money will not come until the end of the fiscal year, which gives all three boards plenty of time to have these discussions. Anne Medenblick said that she agreed that they want some definitions of supplanting in future years. Her understanding is that it will not be supplanting. Her next concern is that it might be a tough sell, as Ms. Burroughs said, but it may be less of a tough sale if the statement about"after five years" were deleted. She does not anticipate school needs decreasing in five years. Commissioner Gordon arrived at 7:34 PM. Greg McElveen made reference to the education process and suggested coming up with illustrative projects that will be considered so that people have more of a sense of how the money will be used. Frank Clifton said that this sales tax is a penny on a $4 hamburger. It is not a huge outpouring of money. He said that this is not dramatically different than what has been done in the past and it does show focus and targets. Chair Foushee proposed that this group does what it can and believe this is going forward until November. She said that after that, there is plenty of time to make concrete decisions about allocation or what happens after five years. 2. Orange County Schools - Overview of Approved FY 2010-11 Budget 3. Chapel Hill Carrboro City Schools - Overview of Approved FY 2010-11 Budget and outlook for 2011-12 CHCCS Superintendent Neil Pedersen said that the two boards would be making a joint presentation since they will be telling the Board of County Commissioners the same thing. He made reference to the information in the packets. OCS Superintendent Patrick Rhodes went through the PowerPoint presentation. School Budget Overview 2010-2012 Board of County Commissioners Orange County Board of Education Chapel Hill-Carrboro Board of Education Joint Meeting September 23, 2010 Student Enrollment* Continues to Increase in Both Districts 2009-10 2010-11 OCS 7,010 7,186 (+176) CHCCS 11,483 11,675 (+192) *Based on Day 20 Head Count Fixed Expenses* Continue to Increase for Both School Districts While the PPA Has Decreased District 2009-10 2010-11 Total OCS $406,542 $512,954 $919,496 CHCCS $929,769 $798,472 $1,728,241 * Primarily Includes Health Insurance, Retirement Contributions and Utilities Capital Appropriations are Decreasing OCS CHCCS Public School Building Fund Lost in 2009-10 Reduction in Lottery Distributions $309 K $427 K CIP Transfer to Operating Budget $654 K $1.1 M Total $963 K $1.527M Governor Has Asked State Agencies to Simulate Cuts of 5, 10, or 15% OCS CHCCS 5% $1.8 Million $2.8 Million 10% $3.6 Million $5.7 Million 15% $5.4 Million $8.5 Million The 2011-12 Potential State and Federal Funding Gap OCS $7.9 Million CHCCS $13.6 Million *Loss of federal funds and no restoration of state reductions *Based on 10% State Cuts for FY 2010-11 Edu Jobs— One Time Funding OCS $1.5 Million (28 Teaching Positions) CHCCS $2.3Million (42 Teaching Positions) Race to the Top Funding •Quality standards and assessments •Turning around low performing schools •Great teachers and principals •Data systems Neil Pedersen explained the Edu Jobs bill, which gave $10 million to states to try and avoid massive layoffs. Orange County was in a pretty good position with regards to positions and the money came about a week or two within the start of school. The districts have two years to spend the funds. The total amount is available now. He said that, politically, there is a dilemma. The funds are needed, but they do not want to wastefully spend the funds this year since they may need them more during next year's budget cycle. Both systems intend to hold on to most of the money for next year's budget. OCS is going to hold the federal money until 2011-2012. CHCCS will spend down the federal funds by retaining positions that are funded with state and local money. This would make the fund balance larger. Neil Pedersen then went over the Race to the Top Funding. The State received $400 million from the federal government under this program. The State will retain $200 million and $200 million will be going to school districts. A figure has not been received for Orange County. It should be based on the same formula as Title I funds. Neil Pedersen said that it was unknown how much the State was going to cut the school districts. He thinks that it will take a lot of collaboration between the three boards to get through this. Mike Kelly thanked the Board of County Commissioners and Orange County Schools for collaborating with them on the budget. He said that the CHCCS board would appreciate some feedback on how to use the Edu Jobs funds and whether a higher fund balance would present a problem. Tony McKnight thanked the Board of County Commissioners for its ongoing support for this district and underwriting the qualified school construction bonds for the C. W. Stanford auditorium. Chair Foushee said that she is speaking for herself, and she does not have a problem about CHCCS putting these funds in fund balance. She said that she would request that both schools boards track these Edu Jobs funds and other federal funds separately. Commissioner Jacobs said that he spoke with Congressman Price earlier this week and he thanked him from all of the three boards for pursuing these federal funds. Commissioner Jacobs said that, in reference to the five-year commitment for the sales tax, they all need to be flexible. Commissioner Gordon said that the approach taken by each school system is fine with her in using these federal funds. Neil Pedersen distributed 20th day projections, which are incorporated by reference. He said that the numbers are still growing. Frank Clifton said that the two superintendents and he meet regularly and the three staffs always work together. 4. County Update on Preliminary Outcome of FY 2009-10 Year-end Revenues and Expenditures Financial Services Director Clarence Grier reviewed General Fund — Preliminary Results for FY 2010, which was on page 16 of the agenda packet. General Fund — Preliminary Results for FY 2010 Attachment 4a— Fiscal Year 2010 Revenue - For Fiscal Year 2010, we received 99.6% of budgeted revenue. This resulted in a shortfall in budgeted revenue of approximately $800,000. - The shortfall varied among all categories of revenue. - Appropriated fund balance totaled $5.2 million consisting of: o $1.2 million in encumbrance carry forwards o $2.0 million in FY 2008-09 carry forwards o $1.7 million to balance County Capital Projects o $0.3 million for new programs Attachment 4b— Fiscal Year 2010 Expenditures and Fund Balance - Expenditures were $7.1 million less than budget or 96.2% of budget - Expenditures were less than revenue by $1.1 million, which represents an increase in total fund balance for the fiscal year. - Available fund balance is estimated at $21.8 million of 11.7% of General Fund expenditures and transfers. - Undesignated Fund Balance is estimated at$21.4 million or 11.5% General Fund expenditures and transfers. - Available fund balance is $836,300 higher than FY 2009. - Undesignated Fund Balance is estimated to increase 0.9% this year. If the same rate of increase is achieved over the next four years, Undesignated Fund Balance will grow to 16 percent depending on the General Fund Budget. Attachment 4c—Schedule of General Fund Expenditures - FY 2011 Budget is $6.2 million higher than the five-year average $169.1 million due mainly to debt service - The four-year average of General Fund expenditures totaled $174.1 million. The FY 2011 budget is $1.2 million more than the four-year average - The FY 2011 Budget represents a $10.6 million decrease from the FY 2010 Final Amended Budget. - Future impacts currently facing the County are potential reductions in the sales taxes, increases in Medicaid Hold Harmless, and reductions in any Federal and State revenues. Frank Clifton commended Clarence Grier and Michael Talbert for their diligence in the financial arena. He said that he credits them for getting Orange County on the right financial track again. He said that the process the County is following is aimed at giving the County more financial flexibility to deal with the issues it faces and taking it out of the crisis mode. The County has made some tough decisions this year— reduced program funding, dealt with non- profits, eliminated over 50 positions in County government, early retirement, restructured County departments and consolidated, etc. The goal is to make sure that the County is in a position to pay for programs in the future. Jamezetta Bedford asked if they could discuss the dental cuts. Mike Kelly said that the state reduced funding for the oral health program. He asked if there was some consensus for the school board to address this issue with the State and to try to look for a solution so that the children have this service. Frank Clifton said that the Board voted earlier this week to consolidate dental services into one location. The consolidation will be at the end of 2011. Jamezetta Bedford said that several of them attended the District 5 School Board Association Meeting and there was a legislative panel. They asked the panel about this issue and educational issues and the panel was woefully uninformed. She said that these three boards need to really focus this year in working as three bodies to inform the legislature how these cuts are affecting schools and other services. Annetta Streater made reference to the issue of discontinuation of public health services to wealthier counties, she said that general language related to wealth had something to do with it, but there were also some other criteria that were examined. She said that there was also some consideration of the existence of a dental school in this County and the type of outreach done by the students. She said that it is not entirely because Orange County is a high wealth county. She said that the other counties are in a worse situation. Debbie Piscetelli said that it is extremely unfortunate because many people are referred to the Health Department through these checks at school. Mike Kelly proposed that this be discussed in the school collaboration group and Frank Clifton said that the Board of County Commissioners can take a stand on it as well. Donna Coffey said that her board would like to hear a summary about the proposed changes in the CIP process and the policy that the Board of County Commissioners discussed last week. Michael Talbert highlighted some of these changes: going from a 10-year CIP plan to a five-year CIP; raising the limit to a $100,000 minimum; a summary of schedules to build to one master CIP that includes schools, enterprise funds, and the general fund all in one and detailed schedules for each entity; matching revenues with expenditures; and backing off on projections of growth. Donna Coffey asked about the 60/40 split for schools/county capital and if this was still in effect and Frank Clifton said yes, but the County never gets close to 40%. Commissioner Gordon said that the 60/40 split was kept in the preamble as a guiding principle. She pointed out that she was quite concerned about the implementation of the Schools Adequate Facilities Ordinance (SAPFO) with the changing of the CIP, because you have to go further out than five years in the CIP for SAPFO. You will need a 10-year CIP for SAPFO. This will be handled by getting 10-year CIPS from the schools and putting the second five years of the schools' budget in the 6-10 year section of the CIP. Chair Foushee said that the out years will appear as they have, but as unfunded projects in the 6-10 years section of the CIP. Superintendent Pedersen asked if the assumption was that the schools should transfer capital to operating to support the 2011-12 budget as they did for 2010-11. Chair Foushee said that the Board of County Commissioners has not discussed this yet and she deferred to the Manager. Frank Clifton said that he was not making any assumptions until January or February, based on what is happening. Neil Pedersen said that it would be helpful to show the funds starting off in capital so that everyone understands that the schools will be dipping into the capital revenues to fund the operating budget as opposed to the perception that now there is less money in the CIP. Commissioner Gordon said that, as far as the SAPFO is concerned, the next project is Elementary School #11. She asked how this stood in the budget. Frank Clifton said that with Elementary School #11, the big concern is the percentage of debt service of the General Fund. Commissioner Jacobs said that at the Assembly of Governments meeting they discussed solid waste, and one of the recommendations coming from the Solid Waste Work Group is going to be a proposal to do something different at the convenience centers with the reduction of food waste and engaging the school districts in these efforts. This is one of the largest uncaptured waste streams. Everyone congratulated Neil Pedersen on his upcoming retirement. Debbie Piscitelli requested having this meeting in Hillsborough sometime in the future. Chair Foushee said that the County Commissioners would like to thank the school boards for the spirit of cooperation and understanding during the last budget cycle. A motion was made by Commissioner Hemminger, seconded by Commissioner Gordon to adjourn the meeting at 8:51 PM. VOTE: UNANIMOUS Valerie Foushee, Chair Donna S. Baker, CMC Clerk to the Board