HomeMy WebLinkAboutMinutes - 20020523APPROVED 10!1102 MINUTES
ORANGE COUNTY BOARD OF COMMISSIONERS
BUDGET PRESENTATION
AND
WORK SESSION
May 23, 2002
The Orange County Board of Commissioners met for a budget presentation and a work session on
Thursday, May 23, 2002 at 7:30 p.m. in the F. Gordon Battle Courtroom in Hillsborough, North Carolina.
COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Margaret W.
Brown, Moses Carey, Jr., Alice M. Gordon, and Stephen Halkiotis
COUNTY ATTORNEY PRESENT: Geoffrey Gledhill and S. Sean Borhanian
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. BUDGET PRESENTATION
County Manager John Link made a PowerPoint presentation. He thanked Budget Director Donna
Dean, Paul Laughton, Alisha Middleton, Personnel Director Elaine Holmes, Assistant County Manager
Rod Visser, Finance Director Ken Chavious, Director of Purchasing and Central Services Pam Jones,
and all of the staff that have worked so hard to pull this budget together. He also thanked the two school
superintendents and their staff for their cooperation.
The proposed General Fund Budget totals $122,850,400. This is a 4.9°~ increase from last year,
which is an increase of $5.7 million. The proposed general fund tax rate increase is 4.5 cents, which will
be 85 cents per $100 of assessed valuation. Nearly two cents of the proposed increase is attributable to
funds needed to pay debt service on the sale of the 1997 voter-approved bonds.
In terms of the past year, it is mast Hatable that Orange County remains #1 in the State for
education funding. The per-pupil allocation in Orange County is $1,000 more than the second leading
County. The Chapel Hill-Carrboro City School system opened Smith Middle School on the campus of
Chapel Hill High School and Seawell Elementary School. Construction has begun on Elementary School
#9 located in the Meadowmont subdivision. The Orange County School system will open Cedar Ridge
High School in August.
The voters approved a $75 million band referendum in November. This will offer residents across
the County progressive opportunities for affordable housing, senior centers, parks, recreation, and
educational facilities.
Since April 2000, almost 800 acres in Orange County have been protected through the Lands
Legacy Program.
The Central Orange Senior Center which is located in the Meadowlands Business Park in
Hillsborough opened in January,. This is a temporary building for the center.
The County Commissioners appointed an Innovation and Efficiency Committee, which
recommended that the County hire Segal and Associates, an independent CPA firm to review revenues
received by the County. Segal and Associates reviewed the County's purchasing practices and found
them to be sound. The firm discovered additional sales tax reimbursements of $563,000. One school
system has also participated and we hope the other one will as well.
General Fund Revenue Highlights
The County's financial picture remains solid. The fund balance remains strong. We are
appropriating $2.4 million from the fund balance for this year's budget. This is $1.2 million less than last
year's appropriation. The real property tax base increased 4-4.5°~. This increased the real property tax
base by $300 million from original 2001-02 estimates. Property taxes remain the largest single source of
revenue.
Regarding the anticipated State withholdings for fiscal year 2001-02, the total anticipated loss far
Orange County is $712,200. The tax rate equivalent is .78 cents. This includes inventory tax
reimbursements of $454,700; beer and wine taxes of $195,000 and homestead reimbursements of
$62,500. The budget includes $3.1 million in State reimbursements. This is intended to send a clear
message to Raleigh that it is wrong and unacceptable far the State to seize funds that rightfully should
come to the citizens of Orange County. During June work sessions, the Board should consider whether
it wishes to reduce the proposed budget by $3.1 million.
There is a possibility of an additional '/ cent sales tax next year. This is intended to replace the
local government reimbursements from the State.
The interest earnings have decreased significantly this year because of the economy.
General Fund Expenditure Highlights
The total general fund appropriation for education increased by 4.9% and totals $60.6 million. The
overall share of the County budget is 49.3°~. He explained the State mandated funding formulas. The
Chapel Hill-Carrboro City School system is projected to gain 234 students and the Orange County
School system is projected to lose 160 students. The recommended increase is based on the formula
for CHCCS and totals $1,392,964 for Chapel Hill Carrboro City Schools and $115,364 for Orange
County. Since the formula has given the CHCCS more money than they requested in the budget, he is
recommending that the district tax be reduced by one cent. This money could be used to address
initiatives identified by the District as important budget priorities such as minority student achievement
efforts.
There is another major increase in Medicaid expenditures for this year. The proposed budget
allows for an increase of $600,000 for next year. The two-year cumulative increase in this mandated
expenditure is $1.37 million.
The County has created a reserve of existing funds of $110,000 that could be used to offset State
related human service budget cuts that occur after the Board approves the County budget at the end of
June. This fund was created by reallocating funds from the Department of Social Services and the Child
Care Challenge Grant.
The proposed budget provides the same funding allocations for non-profit agencies as the current
year, including funding for the Towns for Recreation and Libraries.
Last summer, the County issued $17.4 million of the 1997 voter approved bonds. This represents
two cents of the proposed tax rate increase.
The proposed budget includes $250,000 to fund the increases for salaries for Deputies,
Telecommunicators, and Paramedics. This is a result of the Public Safety Study, which implemented a
5% retention salary increase. The proposed budget provides $12,000 a month for three months to
continue the transportation contract with the Orange EMS and Rescue Squad. The staff will examine
options and develop recommendations regarding EMS transportation beyond October 1, 2002.
Regarding employee pay and benefits, the proposed budget does not include cost-of-living
adjustments, in-range salary increases, and meritorious service awards. The countywide classification
and pay study is postponed until fiscal conditions improve. There are funds included in departmental
budgets for the County's portion of a projected 18°~ increase in employee health insurance. The
proposed budget does include a contingency fund of $145,000 to increase employee pay and benefits as
the Board decides.
Solid Waste Enterprise Fund
The Rogers Road neighborhood waterline has been installed. The recycling drop-off center at
Carrboro Plaza is complete. The proposed budget includes four additional staff positions to bring the
multi-family recycling service in-house. There are two new positions associated with the County's recent
adoption of the Regulated Recyclable Materials Ordinance. There will be no increase in the per ton
tipping fee for mixed solid waste. The top priority for the upcoming year is to evaluate alternative
financing mechanisms to supplement the fund's traditional revenue structure.
On the Horizon
There will be increased debt service for the first installment of the Board's approved debt financing
plan. It is important to implement the County Classification and Pay Study. There are also start up and
construction casts associated with Elementary School #9.
A continued high profile item for the County will be the development and implementation of the
OPC Mental Health business and financial plans associated with State mandated mental health reform.
There will also be a major reworking of the County's comprehensive land use plan, and joint park
and recreation facilities will be developed.
John Link made reference to Appendix H in the budget document, which includes additional actions
to further reduce expenditures and further decrease the tax rate increase. This includes hiring freezes of
vacant positions.
The budget document is available in the office of the Clerk to the County Commissioners, the
County Budget office, the Orange County Library, the Chapel Hill Public Library, the Carrboro Library,
and some portions are available on the County's Internet site, which is ~uww.co.orange.nc.us.
Chair Jacobs asked far questions or comments.
Commissioner Gordon made reference to the proposed closing of the two mental health institutions
and the construction of an institution in Chatham County. She asked for any estimates on the costs to
the counties. She understands that this will result in a decrease in the number of beds.
John Link said that the initial group of Commissioner representatives, County Managers, and the
Mental Health Area Director Tom Maynard met and are trying to address these questions and to
determine the impact on the Counties during this mental health reform.
Commissioner Carey made reference to a lawsuit in Durham County where they ruled that Durham
acted unconstitutionally in not paying for a child's treatment ar placement outside the County for certain
services. He is not sure if this is the responsibility of the DSS ar the schools. He said that we need to
investigate what implications this might have for Orange County and its DSS ar the school systems.
Geoffrey Gledhill said that the juvenile code provides for this position where kids get into the
juvenile justice system, and the case in Durham was a treatment case. The judge decided that there is
no local treatment for these kids which meet the kids' needs. The law for several years has provided that
if there is no local treatment available and it is available elsewhere, then the Judge can order the
treatment. Furthermore, if the parents are unable to pay for the treatment and there are na other funds
available for the treatment, the county can be required to pay the money. In those instances, the County
is required to have notice of the hearing but is not a participant ar a party to the case. We have had
several of these cases here in Orange County. We have been fortunate here because of the
cooperation among DSS, Mental Health, and our district court judges. If there is no program, the county
is stuck with the bill, up to $300 per day for the treatment cost for these kids. The Durham case focused
on the fact that the county really has no role in that whole process, and in fact cannot even appeal a
decision by the district court judge to order the county to pay the money. Typically, the county is just a
pocketbook for these decisions. Locally, we have talked with Mental Health about the need to provide
local services to take care of these cases. He assumes that a local program is being developed at this
time because there is no way to adequately budget for these situations.
Commissioner Halkiotis asked Commissioner Brown if the group had come up with any preliminary
estimates about the costs of mental health reform. Commissioner Brown said that OPC Mental Health
Consortium is in the process of developing cost estimates. In several cases, the State has
underestimated the casts dramatically. As we work through this, we will find mare and more that the
support systems in our three-County consortium cannot provide financially to support those who are
being released from these mental institutions by the State. The services cannot be duplicated at the
local level. There will be a lot of difficulties dawn the road. She does not feel that the participants can be
served as well as they are now being served at the State level. There will be no startup money for the
counties. It is a very sad situation for mental health. The State is not performing its responsibilities as it
should and is relying on the counties to do things that we cannot do properly. Her fear is that we will
have citizens returning to our communities without the proper health infrastructure in place to handle
these citizens. She thinks the State will send them on, whether we are ready or nat.
Chair Jacobs thanked the Manager and staff for their hard work in putting together the budget. He
noted that this is a relatively spare budget and at the same time maintains our commitments to the
programs, policies, and services that we believe the citizens in Orange County need and respect.
Commissioner Brawn made reference to page 13-2 of the budget document and asked for an
explanation of the capital expenditures for the school systems. Budget Director Donna Dean said that
these are the items that were proposed for funding next fiscal year.
John Link said that these are the items that the school systems have indicated are their priorities
far capital projects. The funding sources are the sales tax, pay-as-you-go funding, impact fees or the
sale of bonds.
Chair Jacobs asked that each capital project show the funding source. John Link will provide
additional information on revenue sources before the next two budget work sessions.
2. SOLID WASTE MATTERS
Assistant County Manager Rod Visser thanked the Solid Waste Management staff for all of their
hard work. Specifically, he thanked Solid Waste Management Director Gayle Wilson, Landfill Manager
Paul Spire, Special Waste and Contracts Coordinator Rob Taylor, Solid Waste Planner Blair Pollock,
Recycling Operations Supervisor Jill Clayton, Administrative Officer II Rebecca Holdway and
Development Review and Recycling Specialist Dave Ghiradelli. He also recognized Chair Jan Sassman
and AI Vickers, two people from Solid Waste Advisory Board that have done a lot of work.
a. Synopsis of Interlocal Agreement
Rod Visser said that this agreement was signed in September 1999 after several years of
work by the Landfill Owners Group. It was amended six months later. There are a number of key
provisions as listed below:
• the Orange County landfill accepts waste only generated in Orange County and the portion of
Chapel Hill in Durham County
• the partners reaffirmed commitment to solid waste reduction goals (61 % by 2006}
• partners all agree to deliver solid waste and recyclables to system facilities
• partners retain the right to determine their awn collection systems
• interlocal agreement requires an enterprise fund operation and committed municipal partners
• reaching waste reduction goals must take into account economic viability of the system
• the County general fund will not underwrite system programslactivities
• the County retains flexibility to implement and adjust fees/charges with some constraints. and
• partners reimburse the enterprise fund for the Greene Tract.
There is a meeting of the Towns' and County Attorney pending regarding waste delivery
commitments.
b. Major Assumptions Underlying Solid Waste Operations
The major assumptions are that the parties to the interlocal agreement will fulfill obligations,
tipping fees will be used to the extent practicable and recycling revenue is insufficient to fund the
recycling programs. Also, the County uses system revenues only to operate the system and not to
underwrite the cost of the County's collection of solid waste in the unincorporated areas of the County.
There is going to be a need far supplemental financing in the near future.
c. 2002-2003 Enterprise Fund Budget HighlightslFund Balance Status
There is no mixed solid waste or C&D tipping fee increase included in the budget. There is
funding included in the recommended budget that would bring the multi-family recycling program in-
house at an estimated savings of $1 million over nine years. The budget proposes modest
enhancements to the Household Hazardous Waste program and the rural curbside program. There is
funding to construct a recycling drop off site at Meadowmont. Also, 87°~ of the revenue is derived from
tipping fees. The undesignated fund balance as of the audit performed last year was $3.3 million. After
expenditures and obligations, the available fund balance should be about $3.1 million as of the end of
June. This budget calls for an appropriation of $1.3 million from the fund balance, which would leave the
undesignated fund balance at $1.7 million.
d. Positive Developments/Achievements in Orange County Solid Waste Management
NC Public Interest Research Group rates Orange County recycling the most successful North
Carolina program. There was a 37% reduction of waste per capita compared to a 12% increase per
capita statewide. The Carrboro Plaza Recycling Center reopened on April 22"d. The Town of
Hillsborough is adopting a commercial waste collection franchise. Also, the Rogers Road community
waterline has been constructed.
An aerial survey indicates that C&D capacity has been extended by six months to December
2002 and mixed solid waste capacity was extended by 2.5 years to October 2009. The December 2001
adoption of the Regulated Recyclable Materials Ordinance has the potential to make Orange County
builders/contractors among the most educated and productive recyclers in the nation.
e. Solid Waste Management ProgramslFacilitieslPlans
The Solid Waste Management Plan is being reviewed by the Solid Waste Advisory Board as
part of an alternative finance study. The Caunty Commissioners made it clear when the plan was
resubmitted to the State that they have not made a decision that a materials recovery facility is the way
to ga.
Regarding the Regulated Recyclable Materials Ordinance, it provides far mandatory recycling
of listed materials (clean woad waste, metal, and cardboard). It also requires licensing of haulers and
recycling permits in order to obtain building permits. If successfully implemented, it could reduce C&D
disposal by up to 30%.
Regarding the Solid Waste Facilities Master Plan, it was adopted by the Board of Caunty
Commissioners in October 2001. It included a small C&D landfill, C&D recycling facilities, relocation of
Solid Waste Administrative offices, a possible C&D resale store, and an electronics recycling storage
building.
Regarding the transfer station, there is additional capacity at the mixed solid waste landfill up
to 2009, as opposed to late 2006 as was originally thought. The site at the existing Eubanks Road
landfill for a transfer station was recommended, but not yet adopted by the Board of County
Commissioners as part of the facilities master plan.
Regarding the Solid Waste Administrative Building, it is currently co-located with Chapel Hill
Public Works Department on University property. The Town's lease expires December 31, 2006. We
are anticipating relocating the building on property that would be acquired adjacent to the existing landfill
on Eubanks Road.
f. Key Issues Pending Board DecisianlGuidance
Regarding C&D Landfill Development, the Board has decided to pursue a new, small,
aesthetically designed C&D landfill immediately adjacent to the current property. This depends on
reaching agreement with Duke University to provide an easement for a buffer requirement. It also
depends on acquiring the property needed for the landfill.
Regarding the Regulated Recyclable Materials Ordinance (RRMO), there have been some
amendments and those will be brought back to the Board in June. Some of the implications of the delay
of the ordinance implementation include equipment that has been bid with prices expiring soon. The
budget assumes that the equipment is in operation. Time will be needed for construction of facilities.
Also, there is insufficient regulation of cardboard recycling. Staff is proceeding at this point with the
assumption that the Board would like them to go forward with the first timetable, which contemplates an
October 1, 2002 implementation of the RRMO. The second alternative provides for a timeline of
February 2003 for implementation.
Rod Visser explained that the money for Solid Waste is allocated from a fund called the Solid
Waste Enterprise Fund. There is no money spent from the County's general fund other than paying for
the solid waste that the County deposits at the landfill that is collected at the solid waste convenience
centers.
Commissioner Carey asked about the RRMO bidding process. Purchasing and Central
Services Director Pam Jones said that the bids have been in place for some time and will remain until
June 30th. After that time. she feels we would have to rebid.
Commissioner Carey asked and Rod Visser said that it is a question of providing information
to the County Commissioners and allowing time for discussion and decision.
Commissioner Halkiotis said that the County needs to do some additional work on educating
Orange County citizens an what it really costs to recycle. He said that there is an assumption that this is
a free service and it pays for itself.
Commissioner Halkiotis asked what the County is spending at this time far contract grinding.
Solid Waste Director Gayle Wilson said that they contract out grinding three times a year for yard waste.
With the new C&D ordinance, grinding clean wood waste and pallets, it would increase the contracting to
about five times a year. Last year's budget included $80,000 which did not include the pallet and clean
woad waste grinding.
Commissioner Halkiotis asked how much mulch has been sold this year. Gayle Wilson said
that mulch sales are about double this year at about $150,000.
Commissioner Halkiotis said that we need to encourage more organizations to buy mulch
from Orange County, because the more we get other organizations involved, the more we make it a local
commodity, and the more it benefits the community.
Gayle Wilson said that once the new C&D facilities are constructed and open, we will go from
selling mulch on Wednesdays and Saturdays only to selling it at all times that the landfill is open.
Commissioner Gordon made reference to the tipping fee and asked about the rationale for not
increasing the fee. She thinks we should consider writing a letter to the Towns if the fee is the decision
of the County Commissioners. Rod Visser said that it is absolutely the County Commissioners' decision
as to whether to raise the tipping fee. He said that one of the major rationales is that there is some
consideration on the budgets for the municipalities and also for the County. Another consideration is the
comparison of our tipping fees to other public and private facilities in the area.
Gayle Wilson said that Orange County's C&D tipping fee is the highest in the immediate
region. The next closest is $3 less. The current tipping fees are $45 per ton for mixed solid waste and
$41 per ton for C&D materials.
Commissioner Brown said that she is very concerned about the entire Eubanks Road Solid
Waste Site and haw it affects the surrounding area. She said that it would be better if it were in the
County's control. Gayle Wilson said that we operate only the recycling part of the landfill and try to
remain somewhat separate from Public Works' operation. He said that this site is taken into account in
the master plan. The master plan shows that when the transfer station is constructed, the convenience
center would be relocated on the south side of Eubanks Road.
Rod Visser made reference to the segregation of the solid waste operations and the actual
collection operations. We need to make sure that if the Solid Waste department operates the site, the
services need to stay financially separate.
Commissioner Brown asked about the tire fee required by the State. Gayle Wilson said that
there is currently a 2% tax on tires in the State and a significant portion of that is reimbursed to the
Counties on a per capita basis to pay for tire collection and recycling programs. It also allows the
collection stations to not charge a tipping fee. There is a sunset an legislation that reduces the 2% to 1 °~
effective June 30th. If that is the case, there will be insufficient funds to fully pay for the tire program and
we may have to implement a fee to supplement the lost revenue. He has personally sent emails to the
legislators urging them to reauthorize the 2%. Orange County is now trying to eliminate another illegal
tire dump and it is working with the State. There is also a reserve fund at the State level to get rid of
illegal tire dumps. He has a commitment from a legislator and money has been set aside to take care of
this illegal dump.
Commissioner Brown questioned the State's purpose for lowering the tax on tires. Gayle
Wilson said that it was originally 1 %, but then it was lobbied and increased to 2°l0. Commissioner Brown
would like him to let the County Commissioners know about things like this so they can also send emails
and letters to the legislators.
Chair Jacobs said that the Legislative Goals Committee could look at this. If the County has
already paid far it, there would be little incentive for the State to reimburse us. He encouraged Solid
Waste to track all of the other areas where we have legislative vulnerability.
Commissioner Gordon stated that when Orange County gets reimbursements from the State,
if they charge us a fee, we should consider refusing to pay this fee.
Chair Jacobs made reference to the Solid Waste Management Agreement where it mentions
making a report. He suggested doing an annual report and educating the citizenry by sharing some facts
with them about solid waste.
Commissioner Brawn said that she thought that the Solid Waste Advisory Board was going to
do an annual report. The staff will work on getting this report done by the SWAB.
Chair Jacobs made reference to the Regulated Recyclable Materials Ordinance. He said that
in the Hamebuilders Association newsletter, it explains the entire C&D recycling program. He is pleased
to see that the County Commissioners are ready to proceed with the RRMO.
Chair Jacobs said that he feels it is a good idea to start looking at the changes in the solid
waste master plan. He suggested working on this at a future work session.
Gayle Wilson showed some slides of the proposed facilities an Eubanks Road.
Chair Jacobs mentioned that Durham is interested in the possibility of working with us an
these solid waste issues. He suggested asking the County Manager to contact the Manager of Durham
to see if there are any opportunities for collaboration.
Commissioner Gordan said that she would be careful about this. She would be looking for an
economy of scale.
Commissioner Halkiotis said that Durham was finding itself in competition with a private
transfer station and is now experiencing some financial issues. They might welcome increased activities
on their transfer pad because they would be making up for some lost revenue stream. He thinks it is
worth talking to Durham as well as Alamance and Person Counties. Commissioner Brown suggested
including Chatham County also.
It was decided that the staff will now proceed with the first timeline of implementation of the
Regulated Recyclable Materials Ordinance in October 2002.
Chair Jacobs asked Gayle Wilson about commercial collection in Hillsborough and Gayle
Wilson said that Hillsborough is to make a decision tonight. If Hillsborough wants, our Solid Waste
Department could get the bid. Rad Visser said that that decision would be brought back to the County
Commissioners for approval.
Chair Jacobs clarified that the discussion that John Link had with the managers of Chapel Hill
and Carrboro on commercial pickup will not be decided before the fall. Jahn Link said that he feels an
agreement will be reached that everyone can support.
Commissioner Brown asked if Geoffrey Gledhill had looked at the franchise agreement that
Hillsborough will require for whoever gets the commercial pickup bid and Geoffrey Gledhill said no, not
yet. Also, if there is a franchise agreement with Chapel Hill and Carrboro, the attorneys will review these
to be sure that they are in accordance with the Interlocal Agreement.
In answer to a question from Commissioner Gordon about the Greene Tract, Commissioner
Carey said that they are waiting on some survey work of elevations and terrain to determine the
feasibility of running a sewer line across to the Greene Tract so that affordable housing could be
provided. Rod Visser thinks that the work has been completed. County Engineer Paul Thames will take
the results and do a report and the Greene Tract work group could have a meeting within the next couple
of weeks.
In answer to a question from Commissioner Gordon about payment from the partners for the
Greene Tract, Commissioner Carey indicated that there would be money that will need to be paid by
Orange County, Chapel Hill, and Carrboro.
ADJOURNMENT
With no further items for the County Commissioners to consider, a motion was made by
Commissioner Halkiotis, seconded by Commissioner Gordon to adjourn the meeting at 9:50 p.m.
VOTE: UNANIMOUS
The next meeting is scheduled for Tuesday, May 28, 2002 at 7:30 p.m. at the F. Gordon Battle
Courtroom.
Barry Jacobs, Chair
Beverly A. Blythe, CMC