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HomeMy WebLinkAboutMinutes - 20020422 APPROVED 10/15/02 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS April 22, 2002 The Orange County Board of Commissioners met on April 22, 2002 at 7:30 p.m. in the Government Service Center in Hillsborough, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Margaret W. Brown, Alice M. Gordon, and Stephen H. Halkiotis COUNTY COMMISSIONER ABSENT: Moses Carey, Jr. COUNTY STAFF PRESENT: County Manager John M. Link, Jr. 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. BUDGET AND CIP ISSUES DISCUSSION a. Maio[ Factors Affecting FY 2002-03 Budget This item was presented so that the County Commissioners could discuss various issues related to Orange County's FY 2002-03 operating budget and 2002-2012 Ten-year Capital Investment Plan (CIP). John Link said that he would be presenting the worst case scenario tonight. He made reference to Medicaid and said that based on current year expenditure patterns and taking State estimates into consideration, the anticipated increase for FY 2002-03 would be $750,000. The annual cost for salary increases and the impact of the new positions approved last year is $1.2 million. Regarding health insurance, based on about an 18% increase effective December 1, 2002, the anticipated increase would cost $275,000. The debt service is the impact of the 1997 bonds sold in the spring of 2001 and is equivalent to approximately 1.9 cents on the tax rate or $1,709,000. The $1.5 million increase for education funding would take care of the new students expected and provide Orange County $500,000 in startup costs for Cedar Ridge High School. The $500,000 takes into account the decrease in students expected in the Orange County system. There are also other ways to help Orange County with startup costs for operating expenses. Commissioner Gordon clarified that the per pupil funding would increase from $2,437 to $2,515 which is a $79 increase per pupil. John Link emphasized that this would address new students for the Chapel Hill-Carrboro City Schools and keep Orange County Schools in the same position. Commissioner Gordon said that it is expected that Orange County will have 160 fewer students and that Chapel Hill-Carrboro will have 236 more students for the 2002-03 school year. John Link clarified that if the per pupil amount stayed the same, the Orange County School system would lose $500,000 to $600,000. Commissioner Halkiotis asked if John Link has any knowledge of the fund balances of both schools systems and John Link said that he would get that information this week. Since this is an unknown he cannot suggest that the schools use their fund balance until we know what they have. Commissioner Halkiotis said that even if this projection of funds stays the same that Orange County would still have to use some of their fund balance to open Cedar Ridge High School. John Link said that as a part of the capital costs for schools, the county has appropriated an extra amount on the capital side for startup costs. He said that there is some reason to be realistic about addressing the startup costs. Ken Chavious said that there is approximately $400,000 interest from the notes of anticipation that can be used for startup costs. John Link said that there is not a reserve fund for new staff resources. He is going to recommend that new positions not be considered until the economy improves. He does not know of any other specific cuts at this point. Commissioner Halkiotis said that regarding the money the State has withheld from the counties, he is really disappointed about what the North Carolina Association of County Commissioners (NCACC) has done so far. The League of Municipalities has stepped up their support but he does not see our association as active as they should be. Commissioner Brown asked about Orange-Person-Chatham Mental Health (OPC) and the 7% they feel will be cut by the State. Budget Director Donna Dean said that they have not heard anything from the state about this. John Link said that this might be an issue. In answer to a question from Commissioner Gordon, Personnel Director Elaine Holmes said that the County is averaging 30-35 vacant positions at any one time. She will provide Commissioner Gordon an amount of lapsed salary money. Chair Jacobs made reference to Medicaid and an article written on April 7 about Mecklenburg County cutting costs by entering into a public-private agreement. The article indicated that costs were cut significantly. John Link noted that the growth in the tax base is $2.7 million. He said that there has been an increase of 3.3% in real property valuation and a 5% increase in motor vehicle valuation. Donna Dean made reference to the homestead exemption and said that this year there is $20 million in property tax base, which will not be taxed and next year this figure will be $60 million. John Link said that on state reimbursements, he has included the full $3.1 million in his recommended budget. The NCACC recommends that cities and counties include the full amount of reimbursements in their budgets for FY 2002-03. Regarding sales tax revenues, NCACC recommends that counties project growth at very conservative levels. He will be recommending no growth in sales tax revenues. If the economy picks up, this would be a plus for us during the year. He is recommending taking $2.5 million from fund balance to balance the budget. This would bring unappropriated fund balance to between 9% and 10% of General Fund expenditures. Chair Jacobs asked if we experience a slow growth next year will we be able to depend on any monies from the fund balance and still not go below 8%. Finance Director Ken Chavious said that it will depend on sales tax revenues and windfalls we don't expect. It is possible that we would have a small cushion above 8%. He said that what affects fund balance would be the increases or decreases in sales tax and other factors. He noted that when the County sells bonds in January, he sees no problem in getting a good rate. In answer to a question, John Link said that if the County was given the authority and enacted a one-half cent sales tax on August 1, it would generate $3.6 to $3.8 million in revenues. John Link noted that because interest rates have dropped dramatically this year, his revenue projections are based on $1.2 million less being received from interest income. He said that in order to address the loss in revenue, we are looking at a 4-1/2 cent tax increase. John Link said that he did not budget for the classification and pay study implementation and will not recommend implementation unless the revenue picture improves. He also will not be recommending a cost-of-living increase for County employees. He hopes that the economy will improve and that an increase can be given later in the year. John Link said that the last page of the handout gives potential ways to off set possible loss of state revenues for FY 2002-03. Since Orange County may potentially lose $3.1 million in Inventory and Intangibles (equivalent to 3.3 cents) in next fiscal year, staff has identified potential options to postpone or reduce in the upcoming year. Donna Dean mentioned that the NCACC recommends that cuts come from one-time expenditures such as capital projects. Chair Jacobs made reference to a suggestion to delay personal computer replacements for one year and asked if this would put the County on a four-year cycle for computers instead of a three-year cycle and Rod Visser confirmed this statement. Rod Visser indicated that hopefully we could get back to a three- year cycle. Replacement costs for a four-year cycle would be $156,000. Commissioner Brown asked about the County projects, which may be delayed, and John Link said that they have not yet been identified. Commissioner Brown made reference to the cost of living and in-range salary increases for County employees and asked if there are any other possibilities for County employees that would not cost any money, like an increase in vacation days, etc. John Link said that he hopes in the recommended budget that he will be able to include something for County employees. He said that there are other options that would not cost any money. Commissioner Gordon asked how to anticipate for next year. John Link said that he is optimistic that the economy is turning around and getting better. Commissioner Halkiotis said that one year ago at budget time, John Link volunteered to make some cuts so that the employees could have an increase. He said that it seemed like the County did okay and wanted to know if this % of cuts could be increased. Chair Jacobs said that assuming that the State returned the money owed the County, he would like to do whatever he could to lessen the burden on the taxpayer. John Link said that last year the County Commissioners were sensitive to the tax increases levied by the municipalities and tried to lower the County's increase to lessen the impact on Orange County citizens. Commissioner Gordon asked about the 4-1/2 cent increase and how much is associated with debt service and Donna Dean said about two cents is for debt service for the 1997 bonds. Commissioner Brown asked what the debt service on the 1997 bonds would be next year and Ken Chavious said that the number would be similar but that another tax increase would not be necessary. He said that of the $1.7 million in bonds sold, $1.1 million were for schools. Commissioner Halkiotis asked what the County Commissioners' contingency is right now and Chair Jacobs said $100,000. He said that staff is going to provide a chart showing how contingency has been used for the last few years. Commissioner Halkiotis said that last year we tried to be sensitive to what was happening in the municipalities and had asked John Link to keep the Board informed as to the increases expected by the municipalities. Also, there were some fire district tax increases and water increases. Impacts can be layered on top of each other increasing impacts on citizens. Chair Jacobs asked that the County Manager let the department heads know about the possibility of having to cut department budgets by one percent. Commissioner Gordon asked that the County Commissioners be informed what is being cut from each department budget. b. New Staff Resources/Changes to Existing Positions John Link summarized his recommendation for new positions. Health —Social Worker— Intensive Psychosocial Counselor Health Director Rosemary Summers said that the purpose of this position is to improve health outcomes for pregnant mothers and their unborn children by providing intensive psychosocial counseling services. This is a part-time position with off-setting revenues of$25,200. Information Systems — IS Support Technician and Business Systems Analyst Rod Visser made reference to Kevin Fitzgerald's report and the need for six additional information technology positions to manage migration from mainframe applications, support department users and support the transition to eGovernment, including web based applications. This recommendation would set aside money when funds become available during the course of the year so that three of the six positions could be added. Rod Visser said that further discussion with department heads would be done to determine the most important needs in the County. Commissioner Halkiotis said that when Kevin Fitzgerald did his report, one thing that was brought up was other positions that have technology experience. There is one that supports the Register of Deeds, one in the Library and one for Human Services. He asked for a job description of all three of these positions to see if there is any possibility of putting all these positions under one umbrella. John Link said that staff would examine other possible configurations next fall, which will be brought back to the County Commissioners as recommended by Kevin Fitzgerald. Recreation and Parks — Parks Services Assistant and Parks Services Technician John Link said that the two parks and recreation positions are to maintain the parks we are building. This would be to establish a reserve fund within the Recreation and Parks General Fund budget that would be available to create two full-time, permanent positions to address park maintenance. Personnel Director Elaine Holmes said that they are beginning recruitment of the new parks and recreation director and that person would hire these two new positions. Commissioner Gordon said that she is not sure she would add these positions before making the cuts as indicated by the County Manager tonight. This would need to be a decision by the County Commissioners. Commissioner Brown asked about the development of the plan for the two houses on the park sites and if the maintenance of these homes would be a responsibility of these two positions. Environment and Resource Conservation Director David Stancil said that they are working on a caretaker policy and will have it ready for Board decision within the next week. Health —Senior Public Health Educator for the Child Health Awareness Program This position request is to extend a time-limited position for the Senior Public Health Educator position that administers the Community Health Awareness Program. Health Director Rosemary Summers said that this position is now grant-funded through the Smart-Start Program and is very successful. The Health Department has received preliminary funding approval from the Orange County Partnership for Young Children to continue the program for fiscal year 2002-03. This grant would provide the personnel costs of$47,149 but would not provide operating costs of$6,300. Solid Waste Management—Solid Waste Collector (Multi-Family Recycling) (2 positions) and Recycling Materials Handler (Multi-Family Recycling) (2 positions) Rod Visser said that one thing the solid waste staff tried to do the last couple of years was to increase efficiency. Currently, the County's Solid Waste Management Department contracts recycling collection for residents living in multi-family housing with an outside vendor. The proposal in the agenda offers a cost-saving measure that would discontinue the contractual arrangement and bring this particular collection function in-house. If this particular function were to be brought in-house, it would necessitate the creation of a number of new positions. The Solid Waste Advisory Board has reviewed this plan. The savings in the program would be about $1 million. Solid Waste Manager Gayle Wilson said that in this analysis they have made some assumptions that may result in additional savings than what is indicated in the agenda. He noted that because the funding for these four new positions would come from the Enterprise Fund, the decision on these positions could be postponed for a couple of months. Waste Industries will continue with these pickups until the County has a plan and personnel in place. Discussion ensued on an announcement made by the Town of Hillsborough to discontinue town collection of commercial solid waste. The County's Solid Waste Department will be preparing a proposal along with other private haulers, to provide this service on behalf of the Town. The Town of Hillsborough will probably make a decision in June at which time this item will be brought before the County Commissioners for consideration. Commissioner Halkiotis asked if taking waste out of County actually counts against the County and Gayle Wilson said yes. Commissioner Halkiotis said that he does not want the County to become overwhelmed with the amount of Commercial waste that may need to be collected. He does not want the County to lose any money on this program and Gayle Wilson said that he has no intention of losing anything on this waste collection. This will give the Solid Waste staff an opportunity to talk with the business people and educate them as to all the solid waste services available to them. c. 2002-2012 Capital Investment Plan This item was postponed. The County Commissioners will be provided with a summary of comments made at previous meetings on the CIP ADJOURNMENT There being no further business for the County Commissioners to consider, a motion was made by Commissioner Halkiotis seconded by Commissioner Brown to adjourn the meeting at 10:00 p.m. VOTE: UNANIMOUS The next meeting will be held on Monday, April 29, 2002 at 7:30 p.m. at the Southern Human Services Center in Chapel Hill, North Carolina. Barry Jacobs, Chair Beverly A. Blythe, CMC