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HomeMy WebLinkAboutMinutes - 19890530 29 t MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS SPECIAL MEETING MAY 30, 1989 y BUDGET WORK SESSION The Orange County Board of Commissioners met May 30, 1989 at 7:30 p.m. in Superior Courtroom, Hillsborough, NC, for the purpose of holding a budget work session on the Manager's proposed 1989-90 budget. COMMISSIONERS PRESENT: Chairman Moses Carey, Jr. , and Commissioners John Hartwell, Stephen Halkiotis, Shirley Marshall, and Don Willhoit. ATTORNEY PRESENT: Geoff Gledhill STAFF PRESENT: Deputy Clerk to the Board Kathy Baker, Clerk to the Board Beverly Blythe, Finance Officer Ken Chavious, Assistant County Manager Albert Kittrell, County Manager John M. Link Jr. , Finance Director Ellen Liston, MPA Intern Beth McIver, Department on Aging Director Jerry Passmore, Budget Analyst Donna Wagner, and EMS Director Nick Waters. Commissioner Carey opened the meeting. He indicated to the citizens that this was not a public hearing. A public hearing is scheduled for the middle of June. He asked the EMS volunteers present to select someone to speak on their behalf. He indicated that that person would have an opportunity to speak after the Manager made his presentation. Commissioner Willhoit suggested that a special meeting be scheduled so that the issue of charging for EMS services could be discussed. County Manager John Link began his presentation by thanking Finance Director Ellen Liston and her staff for their help in preparing this budget. The entire budget team worked diligently to pull the budget together. He indicated that the budget team has dedicated their endeavors to the memory of William T. Laws, former Assistant County Manager. The total recommended budget in the general fund is 42.2 million dollars. 'The total budget, including the special revenue and enterprise funds, totals 45 million dollars. There is a recommended tax increase from 64.5 cents to 70 cents, or a 5 1/2 cent increase. He stated that 3.1 cents of that increase is for debt service created by the bond referendum and 2.4 cents is for other operating costs. The school funding equity issue is being addressed in this budget. The recommendations from the User Fee study will net an additional $485,000 in county revenue. Three of the goals and priorities that have been established during the year are: (1) Improved communications and accessible service delivery (2) Solid waste collection and disposal (3) Efforts at diversification and expansion of the county's revenue sources. Link indicated that progress has been made in communication through the Public Information/Public Relations (PIPR) Committee. The results of this committee have been the Report to the People, and improved signage for directing citizens to County buildings. Internally, better communication is being encouraged between department heads. Additional time has been set aside for department heads to work together during the coming year. The addition of a Management Analyst in the Manager's department will help to improve communications. This person will coordinate You Services and respond to citizens concerns and questions in identifying the barriers to accessibility to county services. They will recommend solutions to those barriers. This position will also help in providing information to the public. Another issue facing the county is solid waste. The budget addresses solid waste concerns in several ways. First, a new Solid Waste Administrator is being recommended in the budget. That person will provide direct supervision in overseeing long term solutions to the green box situation. This position will also focus on public education and the expansion of recycling in Orange County. An increase in the tipping fee is also a part of the proposed budget. The State and federal regulations requiring that the landfill be lined is the reason for this increase. Eighty Three Thousand is in the budget to purchase consolidated green box sites for the coming year. The third major goal was diversifying and expanding the County's revenue base. Link indicated that throughout the budget process he has been impressed with the need for Orange County to expand its revenue base. Moving ahead with the Economic Development Strategic plan is a necessary step to achieve that goal. Funding for implementation of the major components of that plan will be provided. Implementation of the User Fee Study is also recommended. He indicated that he believes there is a need to address the issue of which services will be provided through ad valorem tax revenue as opposed to other sources of revenue, such as fees. Link stated the County continues to improve its overall financial condition. The fund balance is at a level sufficient to allow for normal cash flow needs, and the bond rating is AA. That has allowed for a favorable rate of interest of 7.11% on the recent 11.8 million dollar bond issue. In the recommended budget there is a continuation to attain the goal of 8% fund balance which will be approximately 3.5 million dollars. That represents $500,000 in additional fund balance. There is a visible slow down in the rate of growth in the tax base, from an average of 6.5% to 3.6% for 1989-90. That difference equates to 2 cents on the tax' rate. Much of the reason for this decline is due to the loss of the Inventory Tax. Personal property has also been eroded. There has been a decrease in construction. There is a need to expand the tax base through economic development. The Strategic Plan will need to be pursued in order to reach the goal of expanding the County's tax base. Other revenue sources need to be pursued, such as user fees. The alternative to the expansion of the tax base is to continue to raise taxes by 2 -3 cents per year just to maintain current levels of service. Of the tax increase 3.1 cents will go to debt service on the bond issue and 2.4 cents for other operating costs. Figures from the User Fee Study were presented at this time. A potential of $906,000 in increased revenue was identified and the Manager's Proposed budget recommends an increase of $484,500. A breakdown of the potential increase in user fees indicated the largest increase will come from EMS with the remaining increases corning from Environmental Health, Recreation and Parks, Planning, and Land Records. He stated that the question concerning the EMS services was whether or not Orange County would continue to pay for these services totally with property tax, or pursue a mixture of property tax and user fees in the future. A breakdown of the County subsidy is as follows: 301 County Subsidy of Volunteer Services $105,000 County Subsidy of Daytime Services 613.000 Total $718,000 Tax Rate Equivalent 2.1 cents Link indicated that the revenue from fees would generate $244,000 for the first year. The approach recommended would reduce the amount of tax burden to $519,000. Most of the revenue would be produced through private insurance and Medicaid/Medicare. Only a small portion of private citizens would be directly billed and in those cases payment would be based on ability to pay. Some of the EMS volunteers take issue with the study because it does not reflect their contributions and resources to the EMS system. They believe that a complete analysis should reflect their hours of time, training, equipment, and facilities to show what a total EMS system costs. They also take issue with the timing of the study and the implementation, believing that July 1st is too quick for implementation. They also take philosophical issue with charging a fee for volunteer time and use of rescue squad equipment. They believe that fees will cause contributions to diminish. There are other issues, but these are some of the major ones. Link reviewed other increases for the upcoming year. The largest increases go toward schools, and debt service. Other increases are in the areas of human services, public works, public safety, outside agencies, and general administration. Economic Development is a high priority for the county and the implementation of the Economic Development Strategic Plan is being recommended. That will require funds for additional staff to help accomplish those goals. In the Public Works Department recommendations include a solid waste manager, and a building and grounds supervisor, to enhance the solid waste program. At the same time the tipping fees will be increased. In Public Safety the implementation of Phase II of the DARE program, and the addition of a Deputy Emergency Services Director, has been recommended. The Social Services Department is expanding public assistance programs due to mandated program enhancements. Specifically, two Public Assistance case workers, and a nurse supervisor for the in-home care program, are being recommended. These new positions are being recommended for the Health Department. The Animal Control Officer, Public Health Nurse-Family Planning Clinics, and a Social Worker (part-time) to coordinate "baby love" program are also being recommended. Personnel is being recommended for two new positions to assist in the Classification Study and to administer the Employee Training and Development program. In the General Administration the creation of a Budget Office is being recommended. That office will operate as an arm of the Manager's office. The recommendation for the education budgets is for a per student increase from $967 to $1042. This is a 10% increase in county funding for schools current expense. The recommendation also includes using the discretionary capital funds for removal of asbestos in both school systems. The issue of school equity has been studied over the last year. Agreement has been reached on definitions and objectives. A financial model has been reached by county staff and will be presented. The goal is to reach equity within 5 or 6 years. The goal is to reach funding equity only, not programmatic equity. Funding will never be exactly the same and a 4% to 5% variance is thought to be acceptable. In pursuing equity, it needs to be clear that the taxpayers in Orange County will pay more taxes during the course of this effort. That's fair because they will be achieving a greater increase in funding during the same time. A special District Tax could address the question of equity. This tax would be applied to the entire county. The county tax could be raised as the Chapel 30 c Hill special tax is lowered. The Manager's proposal would call for a 10% increase in county funds each year over the next 5 or 6 years. Mr. Link indicated this was his recommendation and did not necessarily reflect the agreement of the two school superintendents. Ms. Liston provided a more detailed explanation of the Manager's proposal. She also discussed the financial model. The assumptions that were used in this model constantly change and need to be discussed here. One is that the County funding increases at 10% each year and State funding increases at 13% each year. Chapel Hill district tax dollars have been projected to remain constant at 4.2 million dollars for this year and as the tax base increases the tax rate will decrease. It was assumed that Chapel Hill students will increase at a rate of 4% each year and Orange County students will increase at a rate of 2% each year. The assumption also included County and State funds being adjusted by these numbers. Countywide tax increases will be necessary for increases in school funding above and beyond 6%. We have estimated a countywide increase of 10%. This model will need to be constantly revised. The percent increases in school funding per student was discussed. Orange county will receive a greater increase in order to make progress toward equity. By 1995 Orange County would see an increase of 7.2 cents and the Chapel Hill/Carrboro school district would see a 2.1 cent increase on the tax rate. The presentation of the budget was concluded at this time. Link stated that this has been a significant year of achievement. The adoption of a 30 million dollar bond referendum, a five year capital improvement plan, the Economic Development Strategic Plan, a Water and Sewer Policy, and a successful Teen Symposium have been accomplished. He indicated that he was confident that Orange County would meet its new challenges in 1989-90 by working together. He recommended this budget to the Commissioners. Chairman Carey thanked the Manager and his staff. He stated the document is clear and concise. He invited the public to study it. He asked a spokesperson for the EMS to address the Board of Commissioners. Eugenia Smith, a member of the Orange County Rescue Squad since 1981, stated that her personal objection to the fee for service is philosophic. However, since the focus of the meeting is the budget she will focus on the financial aspects. She stated that the volunteer rescue squads have been delivering emergency care, at no charge, to the citizens of Orange County since 1968. The efforts of the volunteer squads have made possible the advanced system which serves the county today. The South Orange Rescue Squad, Inc. and the Orange County Rescue Squad, Inc. feels strongly that the imposition of a fee for their services will lower morale significantly and will damage their fundraising capabilities. The increased stipend mentioned in the proposed county budget will not begin to offset the losses the volunteer squads will suffer through a drop in donations. The citizens of Orange County are fortunate to receive the level of care which is made possible by the joint efforts of the volunteers, NCMH, and Orange County Emergency Medical Services. It is remarkable that the volunteers have been willing to undergo the extensive training involved in order to achieve and maintain certification. The David M. Griffith and Assoc. study is flawed. It is acknowledged on page 13 of the study that the analysis system used by them is only as valid as the information it processes. The analysis fails to consider the human, capital and financial assets which the volunteer squads provide for the county. This flaw is a result of a critical lack of input from the volunteer rescue squads. These assets total 2.68 million dollars. The rescue squads recognize the county's contribution to their budgets, but hastens to add that this 303 contribution is only a partial reimbursement for the use of the squad's facilities and equipment. The proposed fee violates the long standing tradition of volunteer service in Orange County which is made possible by the generous donations of its citizens. Although the short term gains may appear to be significant, the long term impact will be disastrous. The squads ask the Commissioners to consider their position and to allow them to continue to do a good job of providing free medical ,- service to the citizens of Orange County. The Board of Commissioners scheduled a special meeting for June 12, 1989 at 6:30 p.m, in Superior Courtroom, Hillsborough, NC, to discuss the user fee recommendation with the rescue squads. BUDGET WORK SESSION CONTINUES Commissioner Willhoit mentioned that programmatic school equity is what he hears the public requesting. He hopes that information can be gathered on both systems -390 that an effort could be made to equalize them. He was not satisfied in setting a specific dollar amount. He asked what the dollars were buying and felt this could be ascertained by comparing what the schools are offering, the number of administrators, etc. Commissioner Marshall stated that she had a real philosophical problem with that approach because the School Boards are elected and how they say they will spend school funds is one of the issues on which they are elected. She indicated that although the Commissioners give a lump sum, the citizens come and ask for specifics . for the schools. By giving a lump sum a large pool of money is created for the School Board to work with. They should be able to look at long-term funding and come up with programs in that way. She stated that she believed the Commissioners should not be in the "program" business. Chairman Carey stated that he was interested in what Commissioner Willhoit mentioned but that he did not believe it should be viewed as a basis for decision making. He stated that the Board of Commissioners cannot guarantee that even if programs and staffing is discussed jointly with the School Boards, that the outcome of the Commissioners decision will have any impact on the ultimate decision made by the school boards. As elected officials the Board of Commissioners owe it to the public to set some reasonable goals and provide information that the public can understand where the county is headed. Also, the School Boards need to know what to expect. The public will get their information about how the money is spent from the school boards. He stated that he did not believe they could control any of that. He mentioned that requesting the data implied that the Commissioners would have some influence over how the money was spent and that is not true. Commissioner Willhoit stated that he agreed that the Commissioners could not control how the money is spent but they could help the citizens become better informed. He also felt that this information would help them know what the goals are so that they could better justify making those expenditures. Commissioner Marshall indicated that she felt this kind of discussion should be an internal one between the School Boards and their Administration. Commissioner Hartwell referred to the Social Services budget and noted it has increased almost 20* this year. The budget that can be controlled has increased approximately 4%. A great deal of effort was made in DSS to hold that to 4%. The remainder of the increase is outside of the control of DSS. Medicaid reform is the 304 largest factor in this increase. With reference to the Department on Aging budget, the increases were primarily in the category of transportation. He felt that the transportation provided serves a broader function than just for the Department on Aging. The role that transportation is playing in the county appears to be undergoing a big increase. He feels that the Board of Commissioners need to think about what role transportation should play. How should it be administered? He asked that there be meaningful discussion of where transportation should be within the county budget because it does not automatically belong in the Department on Aging's budget. Commissioner Marshall asked for a brief explanation of why the estimated expenses in many of the budgets are higher than what was budgeted. Ms. Liston stated that the original version of the budget is used in these figures. In actuality, the budgets have been amended throughout the year. There being no further items to discuss, the meeting was adjourned. Moses Carey, Jr. , Chairman Beverly Blythe, Clerk