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MINUTES
ORANGE COUNTY BOARD OF COMMISSIONERS
BUDGET WORK SESSION
JUNE 17, 1985
The Orange County Board of Commissioners held a budget work session on
June 17, 1985 at 7:30 p.m. in the Commissioners' Room of the Orange County
Courthouse in Hillsborough, North Carolina.
COMMISSIONERS PRESENT: Chair Don Willhoit and Commissioners Shirley
Marshall, Moses Carey, Ben Lloyd and Norman Walker.
STAFF PRESENT: County Manager Kenneth R. Thompson, Assistant County
Managers William T. Laws and Albert Kittrell, Director of Finance Gordon Baker,
Financial Anaylyst Donna Clayton and Clerk to the Board Beverly A. Blythe.
Chair Willhoit noted that the school capital needs task force made five
recommendations:
(1) to give high priority to the major maintenance needs of the two
school systems in the amount of $750,000 annually for each
system. He noted that the current budget of $1,257,530
provides for a continuation toward the higher level of
expenditure and an increase of $190,000 over last year.
(2) authorize a vote as soon as possible on specific and separate
bond issues of eight to nine million to be used primarily to
replace Stanback School, to add multipurpose space to Estes and
Glenwood and accomplish renovations at Orange County High
School and Phillips Jr. High,
(3) implement the one half cent sales local-option tax which has
been accomplished,
(4) dedicate 100% of the County's share of the 1/2 cent sales tax
for school capital expenditures and debt service of school
bonds for an indefinite period of time. Eighty percent was
allocated to the school capital funds, and
(5) consider the advantages of the Countywide supplemental school
capital tax fund for the long term needs and determine if the
revenue from such tax can be appropriated to the schools on the
basis of need.
Kenneth Thompson distributed a profile showing the school capital funding
in the past and how it relates to what is proposed in the coming year. He
noted that much discussion had been held on the long range capital plan. He
referred to the school capital task force which indicated a need of 5.5 million
for Orange County Schools and 2.3 million for Chapel Hill/Carrboro. Both
school systems brought before the Board a list of long-range needs. Neither
school made provision for an elementary school in their list of long-range
needs. The expenditures made in 1984-85 included the Science Lab in Chapel
Hill/Carrboro and handicapped access and renovations at Orange High School.
Also additional expenditures for engineering and architectural work were made
to prepare for the long-range needs.
Thompson went over the list of long-range items and the phased-in plan.
Chair Willhoit questioned the projections for the one-half cent sales tax
and Gordon Baker indicated the figures were conservative.
Dr. Ted Parrish, Chair of Chapel Hill/Carrboro School Board, questioned
the amount of flexibility the schools would have with regard to the money
allocated for long range needs and if the plan is permanent or may it be
changed by a different Board.
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Thompson pointed out that the budget for accomplishing the long range
items listed by both school systems had not been approved by the Board.
It was a general consensus that a decision needs to be made in the
immediate future on the need for a new elementary school or an addition to the
old school.
Wayne Watts, Finance Officer for Orange County Schools, referred to a memo
from Dr. Lunsford in which he requested $40,000 for the parking lot
modifications at Orange High caused by the new construction and also $90,000
for the continued engineering work for the renovations at Orange High. An
amount of $540,000 would be needed for the first phase of construction
scheduled to begin in the Spring of 1986. He presented a proposal for budgeting
the long-range capital needs projects and current capital.
By using the same one-half cent sales tax figures as projected by Ken
Thompson, Watts presented a plan which would allocate to Orange High School
$670,000 to start the renovation work in January or February, 1986. None of
the projects for Chapel Hill/Carrboro would be completed for the coming year.
The total expenditures for 1985-86 would be $1,157,400 leaving a balance of
$362,100. The expenditures for 86-87 would include $1,330,000 for the
remainder of the work at Orange High and the Chapel Hill projects would be the
same as the County Managers' recommendation. For 1987-88 Chapel Hill/Carrboro
would complete their projects leaving a balance of $1,109,500.
Watts recommended either a five-cent property tax increase or some other
source of revenue for 1986-87 to fund the capital needs projects. If this five
cents property tax were levied for three years, an additional amount would be
raised to pay for an elementary school by 1988 or 1989. This would enable the
High School renovation work to be completed a year earlier and allow for the
grade restructuring as proposed by the School Planning Division of the
Department of Instruction.
Lindsay Efland stated that the plan presented by Wayne Watts does have the
attraction of funding the immediate needs with a one year tax increase. If the
tax is levied for three years it would address some longer range needs. He
supported the proposal.
Commissioner Marshall questioned the equity of the proposal for both
systems.
Commissioner Walker supported the proposal over a bond issue.
Dr. Mayer noted that Chapel Hill/Carrboro is not projecting a need for an
elementary school at the present time. She commented on the current and long-
range capital.
Chair Willhoit questioned the monies appropriated for the roofs. Dr.
Mayer indicated that some of the roofs had been repaired with monies other than
that just earmarked for roofs. Dick Drake noted that all priority 1 roofs will
be finished at the end of 1985-86.
Harvey Gay, Finance Officer for Chapel Hill/Carrboro Schools, gave an
overview of the five-year plan for current capital which included (1)
buildings, renovations, new sites, etc, (2) acquisition and replacement of
furniture and fixtures, and (3) acquisition and/or replacement of buses and
motor vehicles. He stated that last year $355,000 was available to address
current capital needs. In the recommended budget for 85-86, only $267,000 is
proposed. He listed the items in each of the three categories that needed to be
funded this fiscal year.
Further discussion and comments were made about the specific needs in both
school systems.
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Commissioner Marshall emphasized that not everything can be financed out
of the current property taxes. Not all needs can be met without increasing the
debt.
Max Kennedy, Orange County School Board member, noted that both systems
have asked repeatedly for funds to take care of the same needs and that now
these same needs have become critical.
Chair Willhoit noted that once the roofs are all replaced or repaired as
needed, extra money will be available that could be put into current capital.
He questioned if some of the priority 1 roofs might be delayed one year which
would provide extra money that could be put into current capital. He
questioned the minimum amount needed by both systems.
Thompson will bring back information about the roof program and the amount
of money that would be available if the program were spread over a four-year
period instead of three as now proposed.
Chair Willhoit stated that the capital requests would be studied in more
detail and further meetings would be scheduled with the two school systems.
Dr. Mayer mentioned two things relating to the long-range plans: (1) the
multipurpose rooms would be ready to proceed in 1985-86, (2) the air
conditioning would be the second priority moving the cafeteria and media center
renovations to third. She stressed that the schools would like some
flexibility in setting priorities for the projects listed in the long range
plan.
Gerry House reviewed the priority list for the long-range plans and the
change in the total amount stewing from a lower cost for the air conditioning
work. The long range capital improvement budget totaled $2,525,180.
Verla Insko, Chapel Hill/Carrboro school board member, pointed out that
students have had to be dismissed early because of the heat in the spring and
the fall. The Phillips building was designed for air conditioning and does not
have any cross ventilation.
Wayne Watts listed the items that must be funded for 1985-86: (1)
vehicles, including a van and bus, at a cost of $123,000, (2) 3 mobile
classrooms at a cost of $45,000, (3) diesel tank at a cost of $42,000, (4)
matched grant for federal energy in the amount of $38,700, and (5) resurfacing
tennis courts and building two restrooms jointly with Orange County. He stated
that if the school system cannot receive at least $500,000 for capital, the
safety and well being of the children will be jeapardized.
Ken Thompson stated that the priorities as listed could certainly be
reprioritized.
Chair Willhoit asked about the status on the bond referendum. Dr. Parrish
noted that the needs are urgent and the question of a bond referendum needs to
be resolved.
Norman Haithcock, Orange County School Board Chair, indicated their
current position is that the majority of the Orange County members are against
the bond.
Max Kennedy indicated that further discussions may be needed by the Orange
County School Board.
Lindsay Efland stated his support of a bond referendum because of the many
needs that exists in both systems but feels that the Board of Commissioners
need to come to some consensus on the bond referendum as well as the Orange
County Board of Education.
Commissioner Marshall indicated that the situation in relation to bonds is
very good and while the County should not take on an enormous amount of bond
indebtedness, there has not been any major bond issue over the last eight
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years; that it is very difficult to move into pay as you go with all the
pressing needs. Pay as you go will work in the future if a very small bond
issue is passed.
Chair Willhoit noted that it would be necessary to use the one-half cent
sales tax money to pay off the bond and still not enough money would be
available to meet the needs of the two school systems. He questioned if it
might be better to levy a property tax increase earmarked for capital that may
very well raise the same amount of money as a bond.
Further discussion and comments were made by both school board members and
the Board on the subject of a five-cent tax increase for one year.
Chair Willhoit asked that an analysis be done to determine what amount of
tax increase it would take to generate the same amount that a bond issue would
generate. This information will be shared with both school systems as soon as
it is available.
Don Willhoit noted a budget work session needs to be held on the
markup/markdown list and suggested a meeting be scheduled for Monday, June 24,
1985 at 7:30 in the Courtroom at the old Post Office in Chapel Hill.
ADJOURNMENT
Chair Willhoit adjourned the meeting. The next meeting will be held
on June 18, 1985 at 7:30 in the courtroom of the old Post Office in Chapel
Hill, North Carolina.
Don Willhoit, Chair
Beverly A. Blythe, Clerk