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HomeMy WebLinkAboutMinutes - 06-12-2001APPROVED MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION June 12, 2001 The Orange County Board of Commissioners met for a Budget Work Session on Tuesday, June 12, 2001 at 7:30 p.m. at the Southern Human Services Center in Chapel Hill, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Stephen H. Halkiotis and Commissioners Margaret W. Brown, Moses Carey, Jr., Alice M. Gordan, and Barry Jacobs COUNTY STAFF PRESENT: County Manager John M. Link, Jr., Assistant County Manager Rod Visser, and Clerk to the Board Beverly A. Blythe (all other staff members will be identified appropriately below) NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. 1. CHAIR REVIEW OF SCHEDULE AND TOPICS Chair Halkiotis called the meeting to order and outlined the agenda. 2. 1992 BOND REFINANCING PROPOSAL Finance Director Ken Chavious said that he is asking that the Board consider refunding a portion of the general obligation bond that was approved by the voters in November 1992. The bonds were sold on July 5, 1994. The estimated savings of the refinancing proposal would be over $50,000 annually, or a total of nearly $700,000 for the remaining term of the bonds. The staff is asking the Board to introduce the bond order to allow the Caunty to refund the bonds and to adopt a resolution setting the date far a public hearing on June 25t"~. These are the required steps to allow the Caunty to refinance. Cammissianer Brown asked if this was awin-win situation and Ken Chavious said yes. A motion was made by Commissioner Brown, seconded by Commissioner Carey to introduce the Bond Order Authorizing the Issuance of General Obligation Refunding Bonds in the Maximum Amount of $24,000,000 and adapt the Resolution setting a date for a public hearing of June 25, 2001, authorizing the Finance Director to file a Debt Statement and authorizing the Clerk to publish a Notice of Public Hearing. VOTE: UNANIMOUS COUNTY MANAGER'S COMMENTS John Link made reference to two sheets, "Recommended School Operations and Recurring Capital Funding," and "Per Pupil Allocations for Each District." He said that his recommendations for school funding were based on the guidelines developed by the School Funding Options Task Force. From the task farce, the Commissioners had a benchmark of 48.1 °~ of the general fund for school funding. This includes current expense, recurring capital, and debt service on school-related capital debt. His actual recommendation was 49.2°~ with a $42 increase per pupil. This was multiplied by the total projected number of students from the Department of Public Instruction. The total number of students projected for the Chapel Hill-Carrbara system was 10,180 and for the Orange Caunty system was 6,556. These numbers were multiplied by the per pupil allocation of $2,437 to arrive at the total recommended current expense funding of $24,808,660 for the Chapel Hill-Carrboro system and $15,976,972 for the Orange County system. He pointed out that the district tax in the Chapel Hill-Carrboro system represents a huge difference in the two systems. This difference exists because the taxpayers in the Chapel Hill-Carrboro district pay an additional 20 cents per one hundred-dollar valuation more than da the taxpayers in the Orange County district. 3. SCHOOL BUDGETS Orange County Schools Superintendent Randy Bridges made this presentation. He outlined the system priorities emphasizing high student achievement as the most important. He showed graphs comparing with previous years the end of grade test scores for grades 3-8. His recommended budget for mandated services and for inflation totals $962,222. The Pathways Elementary Phase II Funding totals $539,359. He explained the items as listed for the expansion budget, which totals $851,912. The County appropriation for 2000-2001 was $15,668,090. He is requesting for the Orange County Schools an increase of $2,353,493 or 15.2°1°. In answer to a question from Commissioner Carey, Superintendent Bridges said that they used the 3°~ increase in salary but the state's budget has not been finalized and the figure could be decreased. Commissioner Carey asked about the student population of Pathways Elementary and Superintendent Bridges said 430 students or a ratio of 1:22. Commissioner Carey asked about the timeframe for the committee that is going to discuss the feasibility of levying a district tax and Orange County School Board Chair Keith Cook said that he is hoping that a decision will be made in January or February with revenues available the next year. He feels that if the district tax is approved that the school system can borrow on the money that will be generated. Commissioner Gordon asked about the mandated items -salary increases (state), security officers (state), etc. She asked about the loss of two state-funded core teachers. Superintendent Bridges said that the state was projecting that the student enrollment would decline. Two teachers will be last as a result of the fact that actual student enrollment was less than projected student enrollment last year. In any year when actual enrollment is less than projected enrollment, the state cuts the positions the following year, and that is what happened in this case. Commissioner Gordon asked about the ratio of students to teachers and Superintendent Bridges said that for grades K-5 the ratio is 1:22 and far grades 6-12 the ratio is 1:25. Commissioner Gordon made reference to the expansion item of reducing class size and she asked in what grades this would be done. Superintendent Bridges said that this would be done in either kindergarten or first grade. More than likely, the class size will be reduced in first grade. Sacrifices have been made in other areas to achieve the existing low class sizes. Commissioner Brawn commended the Orange County school system on the test scares they have been able to obtain within the last four years. Commissioner Brown asked about the health insurance and Superintendent Bridges said that it included locally funded teachers. Commissioner Brown asked far an explanation of the committee that will be formed. Keith Cook said that the committee would be a diverse group so that there will be a cross section of the community. Susan Halkiotis said that same of what is done about a district tax is dependent upon what the County Commissioners say about additional funding from the County. There is interest among parents in the community for a district tax. Susan Halkiotis asked about the timeline for putting a district tax on the ballot for November or for May. This will be provided. John Link said that if there is a successful vote on a district tax in the Spring, the tax could be added to the tax bills going out in August 2002. Dana Thompson asked if November was a possibility. Assistant County Manager Rod Visser said that there needs to be 75-90 days lead time for a referendum. He will consult with Carolyn Thomas, Director of the Board of Elections, to get a schedule for the November and the May elections. Assuming that the Board of Education would be petitioning the Board of County Commissioners there will be a little more lead time. He said that early to mid-August might be sufficient time to petition the Board of County Commissioners. He will let the school board know. John Link asked Superintendent Bridges to give two or three major areas of Pathways that are not funded. Superintendent Bridges said that with Pathways they moved teachers from other schools to that school. They need specialty teachers like physical education, music, art, etc. At this time, these teachers are shared between schools. They also need an associate principal. Commissioner Brown made reference to the comments about the County having money but not giving it to the schools. She stressed that there are other parts of County services that also need money. Susan Halkiotis said that on one of the final tally sheets from the Capital Needs Task Force it appeared that some money was being taken from the senior centers for the schools. She said that she does not want to have to compete with other agencies that also serve the children in this County. Funds are badly needed by everyone. Delores Simpson said that what they do not want to see is the progress they have made in the schools to be stopped ar go backwards. They have been able to continue with what they have. They also need many other things that they have not talked about. She asked that the County Commissioners look at their resources and with their creative, genius minds come up with something. Susan Halkiotis asked about leveling the funding for the school nurses and also establishing a contingency fund that would kick in when student projections are under predicted. In the event that a school system is under projected and ends up with 150 more students, it would help to have a financial adjustment period that would take into account the real numbers. Bob Bateman said that he was one who has spoken against the district tax. He speaks for the silent majority. He feels that there is money in this County somewhere. He is opposed to a district tax. He feels there are other avenues. He does want to participate on this task force. He suggested taking the 12.5 new positions, cutting them to 6.5, and giving the rest of the money to the schools. Chair Halkiotis said that the positions are the Manager's recommended positions and not the Board of County Commissioners'. These positions have not been approved yet. He also said that the money used for park acquisition has been designated and appropriated and is there specifically for acquisition of parkland. There has been a whole variety of funding sources. Commissioner Jacobs said that just like the schools the County has lots of needs. He said that the County Commissioners would not squander money that could be spent on schools. He made reference to the legislation and said that the Board does endorse the NCACC and supports increasing the homestead exemption. He asked if the Orange County School Board has approached their legislators about supporting other funding sources (i.e., impact tax, real estate transfer tax, sales tax increase, etc.). He asked if the school board was going to look at anything besides a school district tax as an additional funding source. Keith Caak said that they have submitted letters for alternative funding for schools. Commissioner Jacobs asked that the school board continue to look at other options for funding. He also asked about the associate principals at Pathways. Commissioner Jacobs asked how many Elementary Schools have ESL teachers and Superintendent Bridges said that they have shared positions. They need one position for each school. Commissioner Carey said that they have discussed some type of contingency fund to take care of the increase in enrollment. He asked, if there is an increase in enrollment, would the school system be able to keep the teachers that they think they may lose. Superintendent Bridges said that the state makes projections and then in October the mistakes are realized. This makes it difficult to find quality teachers in October and November when the extra teaching positions are allowed. Susan Halkiotis said that the safety net would work both ways. If there is under enrollment, the County would pay less money. Superintendent Bridges said that if the enrollment is under projected, DPI adjusts the following year. Commissioner Carey made reference to the budget public hearing and the comments from the parents on what they would like to see in the schools. There are a number of citizens in each system who are not going to agree with increasing the budget for schools. He said that the fact that people do not support something does not mean that it is not the right thing to do. Chair Halkiotis asked if the Orange County school board wanted to say anything about impact fees. Keith Cook said that he does ask that the County Commissioners expedite the increase in impact fees as soon as possible. John Link made reference to the fund balances for the two systems and said that it seems that the fund balance has been consistent the last three years. The amount of fund balance undesignated has dropped from 9.8°~ a few years ago to a projected 7.9°~. The Orange County school system has appropriated a significant amount from their fund balance towards the budget. He also commented that the Caunty Commissioners could set up a reserve for school funding. He said that for every 39 cents the Orange County school system gets, the Chapel Hill-Carrboro systems get 61 cents. Commissioner Jacobs asked if the school undesignated fund balance would be available to use as a reserve fund and Susan Halkiotis said that this fund is not a recurring fund. Chapel Hill-Carrboro City Schools Nick Didow, Chair of the Chapel Hill-Carrboro City School Board, made reference to the presentation. He said that they did have their site plan approved by the Town of Chapel Hill last evening for Elementary School #9 at Meadowmont. The presentation includes a request for a formal review and initial funding for Elementary School #10 and a request for moving ahead with High School #3. Superintendent Neil Pedersen made the presentation. He said that some of the critical needs include meeting the state and federal mandates and rate increases, providing the same quality of education to an expanding population, attracting and retaining a quality staff, and enhancing the quality of instruction. The increases include state salaries, health insurance, and utility rates. They will need an additional $222,659 in order to achieve these goals. He continued by speaking about the rapid growth in the district and the need for Elementary Schools #9 and #10, renovations, and planning for High School #3. Nick Didow spoke about the impact fee and haw it should be set at the maximum. Commissioner Gordan asked about class sizes and teacher-student ratios and Superintendent Pedersen said that the ratio in grades K-2 is 1:23 and in grades 3-12 is 1:26. These are the state's targets. Commissioner Jacobs made reference to page three of the presentation about increasing the lowest paid salary classifications. He asked about the rate of increase far the lowest paid classifications over the last four years and it was answered 14.4°l0. Commissioner Jacobs asked about Elementary School #10 and the cost for that school. It was answered that the cost would be 14.3 million dollars. Commissioner Jacobs asked about the high school numbers and clarified that the high school expansion would be $2 million. Commissioner Jacobs made reference to the issue of impact fees and the comments from Nick Didow that the maximum fee is appropriate and reasonable. He said that because the impact fee is a flat fee, as it is increased to the highest levels, it is increasingly difficult for anyone with a lower income to move into our community. He asked Nick Didow if it did not concern him that we make it increasingly difficult for teachers and other people to buy housing. Nick Didow said that their board has for years lobbied our local legislation for something that is less burdensome far low income households. It has not been approved. Their board, when they met and discussed this issue, said that they long for the days we do not have impact fees for this County. There are children from less expensive homes as well as children from homes which are very expensive. Chair Halkiotis made reference to page three of the presentation and asked about attracting and retaining quality staff. He asked about the NCWISE program and if additional staff was needed for this. Neil Pedersen said that SIMS has been in place for fifteen years. NCWISE provides a lot more flexibility. Secretaries for this program are probably already underpaid. This proposal would put them an the same salary schedule as a school secretary. Without appropriate staffing at the office level, not only will they lose clerical staff, but also they see this as retaining a clerical position at the elementary level. NCWISE will require more staff to fully implement the program. He said that it equates to an additional position at the Elementary School, the Middle School and at the High School, and extending contracts for personnel who are already working 10 months. Chair Halkiotis asked Donna Dean about the additional $300,000 in the recommended district tax. Budget Director Donna Dean said that with the growth and with the most recent valuation, one penny will generate about $17,000 more than originally expected. Assuming that the recommended district tax remains at 20.2 cents, it would generate an additional $343,000. Commissioner Gordon made reference to the issue of impact fees and said that we should take a good look at them because the construction costs of schools could be offset by a considerable amount using the increased impact fees. John Link said that it would be more accurate to say that based on the projections for sales tax, it looks like it will be six million dollars less over ten years than was projected earlier. Chair Halkiotis made reference to the general fund balance for the Chapel Hill-Carrboro City schools and said it was $3.9 million. He asked Nick Didow if the board would be willing to appropriate the needed $479,000 far the proposed community gym at Meadowmont from their undesignated fund balance. 4. SCHOOL FACILITIES TASK FORCE REPORT Assistant County Manager Rod Visser made reference to the School Facilities Task Force that was formed last fall. The group included two County Commissioners, two Chapel Hill-Carrboro School Board members and two Orange County School Board members. They looked at issues related to school construction standards and student population projections. The task farce met three times and a report was prepared. This represents a draft report at this point. The task force also looked at same issues related to the inflation factor, the contingency in a project budget, sizes of schools, etc. Commissioner Carey said that the work of the task force was done for this phase of the activity. The report includes a consensus of what was decided by the task force. The County Commissioners may make adjustments or changes to the report. If the changes are significant, we need to revisit the work with bath school boards. They did not decide whether there would be 3, 5, or 10-year membership projections because that decision needs to be made by the Board of County Commissioners. Commissioner Gordon made reference to the report and noted that the standards were reaffirmed and that the group did come forth with a recommendation that "membership" be used as the measure for student attendance because it provided the most realistic picture of the actual number of students attending schools. In contrast, the group did not recommend the use of "enrollment." She asked when the County Commissioners would discuss this issue and suggested adding it to the agenda for June 14tH Discussion ensued about the method to use for student population projections. Commissioner Jacobs said that he did not want to discount the Planning Director's work or Tischler and Associates' work. The Board decided to use the following five student growth projection methods and asked the staff to prepare new graphs utilizing these methods: 3-year cohort survival, 5-year cohort survival, 10-year cohort survival, Tischler and Orange County Planning. 5. ADJOURNMENT With no further items for the County Commissioners to consider, a motion was made by Commissioner Brown, seconded by Commissioner Carey to adjourn this meeting at 10:15 p.m. VOTE: UNANIMOUS The next Board of County Commissioners' meeting will take place at 7:30 p.m. on June 14, 2001 at the Southern Human Services Center in Chapel Hill, North Carolina. Stephen H. Halkiotis, Chair Beverly A. Blythe, CMC