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HomeMy WebLinkAboutMinutes 04-07-2011 APPROVED 6/7/2011 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION April 7, 2011 The Orange County Board of Commissioners for a Budget Work Session on Thursday, April 7, 2011 at 7:00 p.m. at the Link Government Services Center in Hillsborough, N.C. COUNTY COMMISSIONERS PRESENT: Chair Bernadette Pelissier and Commissioners Valerie Foushee, Alice M. Gordon, Barry Jacobs, Pam Hemminger, Earl McKee and Steve Yuhasz COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEY PRESENT: John Roberts COUNTY STAFF PRESENT: County Manager Frank Clifton and Clerk to the Board Donna S. Baker (All other staff inembers will be identified appropriately below) 1. Work Session to discuss the Manaqer's Recommended 2011-16 Capital Investment Plan (CIP) Michael Talbert said that the County Commissioners saw the first draft of this on March 17th and staff made some corrections and improvements. He went over the changes. He said that this is a conservative outlook on economic growth over the next five years. Many of the projects in the CIP will require debt financing and at some point the Board of County Commissioners may want to consider general obligation bonds. Regarding changes to the plan, there is updated information from Planning and Engineering about more economic development that can occur over the next five years. There are three new phases to projects that have been added, and the total of these is $5.5 million: $3.2 forthe Mebane/Buckorn EDD (Phases 3 and 4), $1,000,150 forthe Hillsborough EDD, and $1,000,150 for the Eno EDD. The only financial obligation the County has is for the first year and other than that, it is only a plan. He went through the changes. On page 1, Overview, Water& Sewer Utilities, this now reflects total projects of $15.7 million. This is up $5.5 million from where it was before because of the three EDD projects. On page 4, there is an additional debt service for the Buckhorn EDD, phase 3 and 4, and Efland Sewer flow to Mebane. This additional debt service is a little over$1 million if every project occurs on the same timeline. On page 5 is the summary for the utilities. This is where the three new projects appear. Chair Pelissier said that she was under the impression that there would be water and sewer for the entire Hillsborough EDD. She asked for clarification. Frank Clifton said that the issue is getting sewer south of the interstate because they will have to go under the interstate to get to the other side. Commissioner Jacobs asked how the County Commissioners are to regard the comments that were made previously regarding background commentary on CIP projects. He said that in looking at the minutes, he brought up issues that were nowhere reflected in this document that he thought there was agreement on. Chair Pelissier said that the expectation is that comments will be included, but she wants to make sure that there is a majority that agrees with the comments before something changes. She suggested that when someone raises an issue, there can be a question whether everyone concurs. Commissioner Jacobs said that he knows that Hillsborough will immediately annex and require the developer to provide the infrastructure. He is not opposed to treating it like other EDDs, he is leery about indicating that the County is going to do anything without having some conversation soon with the Town of Hillsborough about how to proceed together. Craig Benedict said that this is just a placeholder and he agrees that there should be agreements for the future. He said that the four quadrants around I-40 were originally all in Orange County's economic development zones. Waterstone was not part of the extraterritorial jurisdiction. He said that there are annexation limits and this may give the opportunity to develop part of this EDD without having Hillsborough annex. Economic Development Director Gary Shope said that not all projects will be developer- driven in the Hillsborough EDD. Commissioner Gordon reiterated that, except for the first year of expenses, this is just a plan and the County can opt out of it. The next point is that she echoes some of the concerns about what this would mean regarding Hillsborough. She wants to emphasize that this is just a placeholder and not an obligation. She would like to work with Hillsborough to help pay for infrastructure. At some point, the County needs to have the vision of what will be done. She would like to see the County Commissioners talk about the principles and the guidelines of how to go forward with negotiations so that it is not ad-hoc. Gary Shope suggested developing a term sheet on projects as far as new investment, new tax base, new jobs, etc. This might be one way of letting the public know what is coming forward. Commissioner Jacobs said that Hillsborough has been very aggressive and with Mebane, it was negotiated that Mebane would allow the EDD to develop under the County's standards before annexing. He would like to get some kind of agreement like this with Hillsborough and Durham. Commissioner Hemminger arrived at 7:28 PM. Frank Clifton said that with each of these agreements, the utilities will be different. He also said that businesses sometimes do not want to be annexed because of higher taxes. The County's issue is that if the County does not plan for the future, then no one else will. Commissioner Gordon reinforced what Gary Shope said about developing a master plan for economic development. The Board agreed. Michael Talbert made reference to page 5 and the new projects —the Mebane EDD (pg. 43), the Hillsborough EDD (pg. 46), and Eno EDD (pg. 47). He said that a lot of the debt will have to be financed and the County needs a supplement for the debt service until there are customers paying the bills. He made reference to page 9 and made a correction. The Twin Creeks Park Road should say "access" instead of "entrance." On page 17, Southern Human Services Center, the description has been updated to reflect the Board's master plan in 2007 and 2010 where a formal master plan was authorized. On page 25, the Park at Blackwood Farm, the description was inadvertently left off and he provided this to the County Commissioners. On page 28, Conservation Easements, he said that there was consensus to move forward, but recognize the projects that would be funded with existing money. The Back Creek area and the Cane Creek area will be the next projects under negotiations to be funded with this project. On page 31, there was some language change in the description. Pages 38-47 have the details for the utilities. This reflects the additional projects and the $5.5 million. Pages 48 and 49 are a printing error. Page 48 should be page 49 and page 49 should be page 48. On page 66, there were some minor changes with the EDD debt. Some of the descriptions were changed. Frank Clifton said that one of the issues here is no consideration has been given as to whether the '/4-cent sales tax passes and its impact. He is focusing on the first year only at this time. Commissioner Jacobs made reference to page 8 and the School Capital Projects Summary and budgeting lottery funds. He asked what to do about this since it is not known what the State is going to do. Frank Clifton said that it can be flagged until it is certain what is going to happen. Commissioner Yuhasz made reference to the Information Technology budget of $500,000/year and if there is any detail on that. Frank Clifton said that it is a placeholder for each year and he said they think they are in good shape in the Information Technology area right now, but he wants to be prepared for future requests from the Board of County Commissioners and County needs as it relates to technology needs such as telecommunication towers. This is a placeholder only. Commissioner Jacobs made reference to page 15 and said that a number of Commissioners said that they wanted to have public engagement on the Northern Human Services Center prior to deconstruction or demolition but there is nothing in the narration that was indicative of this directive from the March 17th meeting. At least three County Commissioners indicated this and there is no change. Commissioner Gordon said that she was told by Michael Talbert that on March 17 the County Commissioners received this just as information and this meeting is when the Board was going to go through the document, and possibly make changes. Commissioner Jacobs made reference to page 17 and the Southern Human Services Center and said that a possible dental clinic needs to be somewhere in the description narrative. He wants to add language as follows: "to accommodate future human service program needs, including a possible dental clinic." Commissioner Jacobs made reference to page 18 and the southwest library and said that there is nothing in the CIP about library services for the next ten years except for the southwest Orange County library. He has a problem with that because the northern library has disappeared altogether. He does not want to short-change the people in the northern end of the County. Frank Clifton said that one of the issues is that the central library already exists and the staff was moved there. The northern library is part of a long-term plan. Commissioner Foushee said that in the past the County Commissioners have not provided this type of direction to the staff about library services for the northern part of the County. The Board has never directed staff to bring back a plan for library services. She wants it to be clear that the County Commissioners are directing the staff. Commissioner Yuhasz said that they need a task force or report to determine what kind of library services are needed in the northern part of the County. Another need is improved internet services in the northern part of the County. He would like to see this included in any consideration for services available to the northern part of the County. Frank Clifton said that the staff is taking comments into consideration and they are working on proposals for the upcoming budget process. Commissioner Gordon said that she thought the Library Director was going to bring back a report and she is satisfied to wait until that comes back in a timely manner. Commissioner Foushee said that this report is more operational and not CIP-related. Commissioner Jacobs said that he wanted to flag this issue because the facility has been removed. He wants some kind of physical presence in northern Orange County. He does not want to lose the concept of having something in this area, especially if this building is going to be removed. Commissioner Hemminger agreed with Commissioner Jacobs about adding a placeholder for a plan for future services in the northern end of the County. Commissioner Jacobs said to revisit this after the library report comes back. Commissioner Jacobs made reference to Bingham Park on page 26 and if the assumption was that the land acquisition would be separate from the park so that it is part of Lands Legacy. Commissioner Jacobs made reference to page 32 and said that there is a detailed description of the Millhouse Park, including the joint project with the Town of Chapel Hill and he does not recall that the Board of County Commissioners has discussed any of this. He asked where this came from and why it is in here. Dave Stancil said that there have been discussions at the staff level with the Town about the possibility of a joint venture. The Board has not discussed this yet. Commissioner Jacobs made reference to page 35 and the NE District Park. He said that staff had a pre-concept plan and there is nothing about this in the document. Commissioner Jacobs asked that there be an indication of whether the Board has discussed these items or not and when it is just the vision of the staff. Commissioner Jacobs made reference to page 40 and asked why the County is still involved with Lake Orange. He would like to revisit this. Frank Clifton said that there are a lot of projects and a lot of activities and economic development is the top priority now. He would like to solve this problem now, but this will be a fairly involved political discussion. It is a backup water source for the Town of Hillsborough. Commissioner McKee arrived at 8:05 p.m. Chair Pelissier said that the Board has never discussed this issue and she would prefer to focus on the bigger economic development issues. Commissioner Jacobs suggested adding this to the next joint meeting with Hillsborough next year. Commissioner Foushee verified that what has been discussed tonight does not indicate a change in this CIP and all agreed. Commissioner Gordon made reference to page 17 and said that she thought there was agreement to add a dental clinic. Instead of saying "possible" dental clinic, it should say, "including a dental clinic." Commissioner Gordon said that she was thinking there would be a public hearing on this CIP. Chair Pelissier said that this is usually included in the budget public hearings. Commissioner Gordon said that she thinks it might be a good idea to have a separate public hearing for the CIP. Commissioner Yuhasz said that since they are only doing year one of the CIP, he does not see the benefit of having a separate public hearing. Chair Pelissier asked if anyone else wanted a separate public hearing on the CIP and no one agreed. Chair Pelissier said that the CIP and the budget will be in the budget public hearing. Discussion ensued about the separate issues of the CIP and the budget. Commissioner Jacobs asked about the jail improvements. Michael Talbert said that there is an existing jail project that shows the amount of money set aside years ago for 20 additional cells for a female block. This has never happened. He does not know what will happen with this at the State level. Commissioner Jacobs said that there have been discussions with the Sheriff about a commitment to help upgrade the jail facilities. Commissioner Yuhasz asked if it was fair to say that there is not a plan to build a jail in the next ten years and Frank Clifton said yes. Michael Talbert said that there are no changes to the priorities or the funding of any particular project. There are changes to the wording regarding northern, southern, and two- part projects. The County Commissioners commended the staff for the format and that the process is excellent for this CIP. 2. Work Session to discuss Proposed Uses of Funds from a November 8, 2011 Special Advisory Referendum Concerninq the Levy of a One-Quarter Cent (1/4 cent) County Sales and Use Tax Frank Clifton said they asked Gary Shope to speak to some proposed economic development uses of future funding sources. If this passes, the initial amount generated would be $1.25 million a year. The initial proposal is to allocate $800,000 a year toward infrastructure, debt service, and extensions, etc. Gary Shope reviewed his memo, as shown below: Memorandum To: Orange County Board of County Commissioners From: Orange County Economic Development Date: Apri17, 2011 Subject: Proposed Economic Development Uses of Future Funding Sources Back r� ound As the conversation on potential additional funding sources for economic development in Orange County continues to evolve, the Economic Development department would like to provide additional definition on uses of potential future funding sources. Draft estimates from an additional �/ cent sales and use tax, should it be approved in Orange County, suggest that approximately $1,250,000 annually may be available for economic development programs. Of this additional funding, we are assuming that approximately $800,000 annually will be committed to debt service on water and sewer infrastructure in the Economic Development Districts. From the remaining $450,000 per year, we propose the following uses for consideration. Small Business Loan Pro�ram As this successful program continues to mature, we propose allocating an additional $200,000 per year until the total program funding reaches $750,000. As the Commissioners have provided$275,000 to this program to date, this would require approximately 2 �/z years of funding at $200,000 per year. Collateral Materials As the Economic Development Districts become closer to being considered 'shovel ready; and as economic development in Orange County, in general, continues to transition, the development of collateral materials to highlight our assets will be essential. These materials may consist of a new Internet interface, including polishing the website, utilization of appropriate social media tools, and development of informative brochures. The creation of a cohesive set of collateral materials may require up to $20,000 annually. Incubator Space Clear support has been identified for retaining young companies that are generated from the University of North Carolina at Chapel Hill. To successfully capture these entrepreneurs, the County must be able to provide the facilities to meet these companies'specific needs as they move out of university-owned space. This support can take a variety of forms,from development of a county-owned incubator space to providing rent subsidies on privately owned leasable space. Incubator support may require$75,000 to $125,000 annually. A�ricultural Economic Develo�ment To fully capitalize on the success of the Piedmont Food and Agricultural Processing(PFAP)Center as well as our region's ever growing culinary reputation,it will be critical to effectively support the growth and development of the food-based businesses that outgrow the PFAP. This program could incorporate a wide variety of components,from focused counseling for these unique businesses,to the creation of a'culinary kitchen'facility that could provide full'kitchen for rent'space similar to the PFAP's'equipment for rent'concept. Additional PFAP programming could include focused outreach to Orange County farmer's to provide direction in utilitizing the PFAP to increase the marketing and distribution options for their crops. An estimated range for these programs is$25,000 to$250,000 anmlally. Outreach To more broadly communicate both existing and new economic development initiatives, including incubator space, updated economic development districts, small business support programs, agricultural economic development and business investment grants,focused opportunities to share this information should be created. Potential opportunities include trade shows targeted to specific industries, Industry Appreciation events to encourage collaboration among our existing businesses, and a local "Economic Health" event to share the current projects and recent successes of the County's Economic Development program. A rough estimate of these programs is approximately $15,000 annually. Business Investment Grants Continued funding of the County's fledgling Business Investment Grant program is crucial for Orange County Economic Development to affirm its renewed attitude toward state and international economic development opportunities. While the dollar amount of this initiative is dependent on the opportunities that arise, it would be beneficial to have a minimum of $100,000 annually that is quickly and easily accessible as opportunities present themselves. Commissioner Yuhasz said that one of the things they talked about at the retreat is initiating a cooperative effort between the County economic development and the municipalities' economic development departments. He said that one thing missing is dedication of some portion of this towards that type of cooperative effort. Gary Shope agreed. Commissioner Jacobs thanked Gary Shope for this memo and said that it is way more specific and inclusive than what they have had before. He said that part of the sales pitch is that the County stands ready to be collaborative. Gary Shope said that he has visited with all of the community partners except Carrboro, but that is on the horizon. Commissioner McKee asked about the Skills Development Center in Chapel Hill and Frank Clifton said that there are staff-level discussions on how this facility can be expanded, but it is in the preliminary stage. Commissioner Gordon agreed with the issue of collaboration with the towns. She wants this to be explicit about what this money will be used for and the partnership with the towns. Gary Shope said that the collaborative network has to be the foundation before moving forward. Commissioner Gordon said that she would like to be more explicit about the types of businesses the County is interested in. She would like to include some overarching statement of principles — green building, innovative industries, etc. Commissioner Jacobs said that he has heard over the years that there is no flex space or wet labs. He said that he is not averse to having more conversation about this possibility. Frank Clifton said that the issue initially is infrastructure needs. Gary Shope spoke about the importance of using the wording "innovation" instead of "incubation." Commissioner Jacobs said that there needs to be a non-awkward way to link Orange County farmers to the small business loan fund. Chair Pelissier said that the two small items for outreach and collateral materials should not be part of the uses of this sales tax. This should be out of the economic development operating budget. Frank Clifton asked that any other comments be emailed to Gary Shope. Gary Shope said that he could do alerts to the County Commissioners about economic development. Chair Pelissier said that the Board needs to provide direction to staff about the percentages for these funds. Commissioner Gordon said to make it 50% to schools and 50% to economic development. Commissioner Jacobs said that he would like to have a discussion with the school boards because this is only dedicated to facility improvements of older schools and improvement of technology. He said that if the State requires the schools to provide new buses, there is no money for that. Frank Clifton said that the wording is from the last referendum. Commissioner Jacobs suggested wording it, "capital projects that are not new schools." He wants to offer more flexibility than the present wording. Chair Pelissier suggested adding this to the agenda of the joint meeting with the school boards. Commissioner Yuhasz said that he was comfortable with putting it for school capital needs. Commissioner Hemminger said that you have to specify technology, because that does not fall under capital needs. She suggested the wording, "capital needs, including technology." Commissioner Gordon agreed with it not being for new capital needs. Commissioner McKee said that he is going to operate on the premise that he is going to be committed to finding the economic development money to make it work in the worst case scenario, if this does not pass. Commissioner Yuhasz agreed with Commissioner McKee. Michael Talbert said that originally the '/4-cent sales tax was supposed to be on the April 19th meeting. Commissioner Jacobs suggested adopting this in principle, pending a discussion with the school boards. Frank Clifton said that it would be fine to pass a general resolution on the split of the money, indicating that more specifics would be forthcoming. The Board agreed. Commissioner Gordon suggested putting the ten-year commitment into the "Now, therefore, be it resolved," section. 3. 2011-12 Budqet Drivers Frank Clifton distributed a handout on a workmen's compensation claims summary. There is less than $100,000 in claims for Orange County this year. This is remarkable. A lot of this is related to solid waste and some positive changes that have been made. Financial Services Director Clarence Grier said that, based on what was done last year as far as the budget, the glass is half full this year. The expected budget is $176 million. There are two issues for the budget this year. The first is that the NCACC will not the underwriter for the health insurance plan anymore and it is anticipated that health insurance rates will increase 15-25%. Also, the State may decide to pass on the housing of misdemeanants to the County. He went through the increases: - Employee and Retiree Health Insurance increases — up to 25% $1.7 million - Jail Fees — potential loss of revenues (misdemeanants) 1.8 million - Misdemeanant expenses added 1.6 million - Total budget impact (4 cents on the property tax) $5.1 million Clarence Grier said that he was prepared for the health insurance issue, but not the misdemeanants. Frank Clifton explained the misdemeanant housing further. Frank Clifton said that, unless the County Commissioners want to wipe out an entire County department, this new expense for housing misdemeanants will require a tax increase. He thinks that the public will understand that it is for this reason right now rather than down the road. Commissioner Jacobs suggested exploring a different way of looking at this and talking with the judges about running a drug rehabilitation program and house arrest. He suggested having the County's own program for misdemeanants if the judges are willing to work with the County. This would be cheaper than building a new jail. Frank Clifton said that this is an analysis that needs to be done. Chair Pelissier said that this is something to explore and she has had discussions with Judge Buckner on this topic specifically. Frank Clifton stressed that there will still probably have to be a tax increase to cover this. Commissioner Yuhasz said that he wants to know exactly how many pennies it is that the State has cost the County. Frank Clifton made reference to the spreadsheet of Employee/Retiree Health Coverage, which was in the agenda packets. Right now, it costs about $6,500 per employee and retiree for the health program. This is before anticipated increases. The rest of the cost for dependent coverage is split with the employees. The County Commissioners have six months to decide what to do. This will have to be addressed to some extent. He said that the staff is working through many options to see what is best for health care coverage for the County. Commissioner McKee asked if the County was large enough to consider self insurance and Frank Clifton said yes. This is one of the options to consider. Chair Pelissier asked if Orange County was unusual in providing free employee health insurance. Frank Clifton said that Orange County provides a higher level of dependent coverage than other places. Chair Pelissier said that it would be good to have this kind of background information as the Board looks at this. Commissioner Jacobs said that he would like to argue for looking at the entire benefit package for employees. He would like to solicit comments from employees as it relates to the 401 k and other compensation issues. Frank Clifton said that the employees want to know when they are going to get a raise at this time. He said that he does not know of any place outside of Orange County where employees get free health insurance after retirement for the rest of their life. A motion was made by Commissioner Hemminger, seconded by Commissioner Jacobs to adjourn the meeting at 9:57 PM. VOTE: UNANIMOUS Bernadette Pelissier, Chair Donna S. Baker, CMC Clerk to the Board