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HomeMy WebLinkAboutMinutes - 20080508 APPROVED 9/16/2008 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS Budget Work Session May 8, 2008 7:30 p.m. The Orange County Board of Commissioners met for a Budget Work Session on Thursday, May 8, 2008 at 7:30 p.m. at the Southern Human Services Center in Chapel Hill, N.C. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Moses Carey, Jr., Valerie P. Foushee, Alice Gordon, and Mike Nelson COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEYS PRESENT: Geof Gledhill COUNTY STAFF PRESENT: County Manager Laura Blackmon, Assistant County Managers Willie Best, Gwen Harvey, and Clerk to the Board Donna S. Baker(All other staff members will be identified appropriately below). Preliminary Outlook of Fiscal Year 2008-09 Budget Drivers a. Real Property Valuation and Property Tax Revenues Budget Director Donna Coffey said that the current property tax rate is .95 per hundred dollar valuation, the valuation prediction for next year is about $11.4 billion, and the Homestead exemption would reduce that amount to $11.3 billion. This is only a growth of 2.3% since last year's budget. The total valuation has grown by about $230 million. One cent on the tax rate next year would generate $1,274,655, which is a 2.1% increase over the current rate. The valuation is clearly not growing at the rate of expenditures. The expenditures over the last ten years have grown at the average rate of 7.3% per year. Laura Blackmon said that the current Consumer Price Index will be 4.1%, so there is a gap between the valuation increase and the CPI. This coming year will be difficult as the economy continues to slow down. Chair Jacobs asked about the increase in revenue divided by the property valuation and Donna Coffey said that if the County stayed at the same property tax rate, it would get $112 million from property taxes. b. Sales Tax Revenues Laura Blackmon said that sales tax revenues will not increase as predicted. For the first six months, the targeted amount was $13.5 million and the received amount was $12.5 million. Next year is the second year of the three-year Medicaid Relief/Sales Tax Swap. The State is also keeping some of the proceeds of the Article 39 sales tax to help offset the new costs associated with Medicaid. In addition, the State is changing the sales tax distribution formula from a per capita distribution to a point of sale distribution, further reducing sales tax amounts that counties with smaller retail bases receive. Next year's sales tax revenues are anticipated to be lower than currently budgeted, which is $23.2 million. Staff is working with representatives from the NC Association of County Commissioners to finalize how the legislation will affect the upcoming revenues. Commissioner Carey asked how much less the County would get this year in sales tax and Donna Coffey said that at this point, distributions should be at 58%, but they are only at 54%. The Medicaid costs are much higher than the State predicted. Commissioner Gordon requested that the staff update the Medicaid swap chart and also write a report on the lottery proceeds as to what is available. c. Funding Requests from Local Boards of Education Chair Jacobs said that both Superintendents are in attendance, as well as the Chair of the CHCCS Board and two potential County Commissioners. Laura Blackmon said that on April 22"d, both school boards presented their budget requests for next year. The CHCCS requested an increase of$6.8 million and OCS requested an increase of$1.8 million. The current per pupil expenditures is $3,069, and Attachment 2 has the historical comparison of the per pupil appropriation from 1983 to the present. Based on the State Certified Student Membership Projections, CHCCS will have an increase of 323 students and OCS will have an increase of 79 students. If the Board of County Commissioners fully funds the CHCCS budget from the ad valorem tax, the tax increase would be 8.39 cents and the per pupil allocation would be $3,569. The CHCCS increase would result in an additional $3.8 million for OCS. An alternative to increasing the ad valorem tax rate to fully fund the request is to use some combination of ad valorem and special district taxes. If the County Commissioners fully funded the OCS budget, the tax increase would be 4.25 cents and the per pupil allocation would be $3,290. The OCS increase would result in an additional $3.5 million for CHCCS. The remaining $3.25 million requested by CHCCS could be funded by increasing the special district tax. Staff anticipates one cent on the special district tax to generate about $808,000. Laura Blackmon said that the Board has not discussed any of the items that the schools presented, and the Superintendents are present to answer any questions. Superintendent Pedersen said that if the County fully funds OCS, then CHCCS could use the district tax, which would get them way down the road with adding the 12th grade at Carrboro High and opening Morris Grove Elementary. The total increase in the district tax for this would be 2.43 cents. Superintendent Pedersen said that he was in a meeting of superintendents today and there are rumors that there could be a salary increase for teachers as high as 10%. CHCCS has budgeted 5%for teachers and 4% for classified. He would like to keep an eye on this. Anything greater than this will be a challenge. Chair Jacobs suggested sending a letter to the Lottery Commission about getting money for these projects as soon as possible so that the County can get ahead of the sequestering curve, should there be one. He asked the Superintendents how they would spend the lottery proceeds. Superintendent Pedersen said that the first six months of lottery proceeds, which CHCCS has received, will go to the renovation of the Lincoln Center for the expansion of the Phoenix Academy. This is about $640,000. The other half is budgeted in 2008-09 for ordinances. Chair Jacobs said that the Board also asked of CHCCS about where it was suggesting the County get the $640,000 for planning money. Laura Blackmon said that it will be coming back on May 20th Donna Coffey verified with Superintendent Rhodes that OCS has dedicated its lottery proceeds to Orange High School renovations. d. Funding Request for Orange County Satellite Campus of Durham Technical Community College Laura Blackmon said that the Durham Technical Community College current budget was for a partial year and it was opened up earlier than expected. The full schedule will be available in the fall. The budget request was $581,601 for next year. There will be a jump in the coming years and she was pleasantly surprised by their budget request. This is Line#10 on Attachment 1. e. Departmental Requests for New Staff and/or Changes to Existing Staff Laura Blackmon said that this information was given to the Board of County Commissioners at the last work session but the Board did not have a chance to discuss this. Line#11 on Attachment 1 refers to transitions of long-term temporary positions to permanent positions. The estimate for this is $210,000. Commissioner Gordon made reference to major budget drivers and asked what did not get on the list. Laura Blackmon said that the Board would get the Manager's recommendations at the budget presentation and she thought it would be good for the Board of County Commissioners to see all of the requests, and if she does not recommend them this year, the Board will likely see them again next year. This gives the Board a sequence of some of the demands of the departments. Laura Blackmon said that one thing not on the list is operating capital items such as equipment, etc. Donna Coffey said that the preliminary lists from departments are about $2.8 million. Laura Blackmon suggested going through each category of Attachment 3, Departmental Requests for New Staff and/or Changes to Existing Staff for FY 2008-09. Category 1 - New Positions Related to Opening of New Facilities: Chair Jacobs asked about the Central Orange Senior Center Front Desk Manager and if this included salary and benefits for a full year. Donna Coffey said that the aging positions are for eight months. Laura Blackmon said that the Central Orange Senior Center will mirror what was done at the Seymour Center. Commissioner Gordon suggested that the effective date be on the sheet and Donna Coffey said that she would add this. Chair Jacobs said to add the effective date to each of the positions that are delayed. Commissioner Gordon said that positions should be highlighted if they are a fraction of a year. Commissioner Gordon asked about the Revenue Office Assistant and information desk position and asked why the opening of a new building created the need for this position. Tax Collector Jo Roberson said that they tried to centralize the information desk and minimize interruptions to other staff. The design of the new building has an information desk where people can come in for basic information. Chair Jacobs asked about signage for the building and Jo Roberson said that there would be signage about where people should go. The elevator will open up to the information desk, and part of the responsibility of this position is to welcome the person and see if they need any help. Chair Jacobs made reference to the Parks Conservation Technicians and the statement that says they were included in the capital project ordinance. He asked about the need for saying this. Donna Coffey said that the positions were included in the CIP and part of the operating costs. The staff was trying to show the impact of a new facility. Commissioner Gordon said that it is great that the Manager is mentioning this in the job description, but to be clearer with the wording and Donna Coffey said that she will fix this. Category 2— Change in Funding Status: Additional General Fund Support Requested (No Change in FTE): Laura Blackmon said that the Health Department has a Senior Public Health Educator, which is the Volunteer Coordinator that coordinates the Medical Reserve Corps and the Community Emergency Response Team programs. The federal grant ended on September 30, 2006 and last year the Board decided to fund it for another year. Last year there were some EMS grant funds and National Association of City and County Health Officials funds. This year, the County support would have to increase. Commissioner Foushee said that it is more beneficial to the Board if it is clear that the County will be funding this position in full, if moving forward. Laura Blackmon said that she is expecting some offsetting revenue (EMS Services grant of$10,000), but all of the other grants that used to support this are gone. Commissioner Carey said that the Board made this same observation last year when this was discussed. Commissioner Gordon said that there really should be an FTE change because the County will be providing this service now, and the county is still taking on full funding. Laura Blackmon said that the second position is the Housing/Community Development Director position, Tara Fikes' position, and this position was initially funded with Housing funds, however, there is a requirement that the percentage of tasks performed by that position coordinate with the amount of funding that comes from Housing funds. Over the years, there has been a change in the way this position has been functioning. The staff is looking to fund more of this position from the General Fund since Tara Fikes spends most of her time on duties related to the County's involvement in affordable housing programs. The proposal is for this program to be funded 70% from the General Fund and 30% from grant funding. Tara Fikes said that the administrative fees that can be earned under the Section 8 program have remained stagnant for about five or six years. Chair Jacobs asked, if there is a Democratic President with a Democratic Congress that is more sympathetic to public housing, if it would be easier to reconfigure this position back to support Section 8 or other public housing efforts. Laura Blackmon said that the duties and the programs under the Housing Department have expanded, so even if more funds were available, she is not sure that the County could use Section 8 funding to support a position that is more dedicated to other duties. Commissioner Carey asked Tara Fikes if there are other positions in her department supported by cost-sharing with the Federal Government and Tara Fikes said all but two. Commissioner Foushee asked if there was a way to draw more funding since some of these duties are now delegated to other staff. Tara Fikes said that the County is drawing down the maximum administrative funds that it could from the Housing funds. Category 3—Additional General Fund Support and Increase in FTE: Laura Blackmon said that these positions have been working at a partial rate and now she wants to increase them to full-time (FTE-full time employee). The Health position is not moving to a full 40 hours, but the other two are. Commissioner Carey suggested increasing the Dental Hygienist position to full-time and decrease the waiting time. Health Director Rosemary Summers said that the employee now in this position only wants to work at 32 hours. She said that this is an incremental change. The other limitation to decreasing waiting time is the facility capacity. Chair Jacobs said that it might be useful to have an additional category of positions that are partially or fully generating revenue that offsets the cost of the position, because when the public is told that the County is adding a position, the assumption is that the taxpayers are paying for it. Commissioner Gordon asked about the Planner II position and Craig Benedict said that this is Karen Markowitz's position. She is part-time now and he would like her to be full-time. He said that, since the advent of the half-time position, there have been two new boards put under Planning's purview—the Orange Unified Transportation Advisory Board and the Rural Planning Organization —and these demand staff time. Category 4— New Positions to Improve Service Delivery: Laura Blackmon said that the final estimate for funding all of these positions (total, not just this category) is $2.1 million. None of the new positions were included in the budget driver estimates. Commissioner Gordon asked about the Assistant Fire Marshal and what happened to the fire and rescue study. Laura Blackmon said that they were waiting for the new director, Frank Montes de Oca, to come on board and they will approach the Sage report once more. The new positions were submitted by staff before he came on. Commissioner Gordon asked if there are existing needs to be covered by the Assistant Fire Marshal, or if there will be new needs from the study. Frank Montes de Oca said that there are new requirements in the fire code for inspections of nursing homes, assisted living facilities, schools, etc., and staff has not been able to maintain the level of inspections that is mandated. Chair Jacobs said that this position has been requested for years, and this position was often pitched to the County as something that would lower homeowners' insurance. Frank Montes de Oca said that when he arrived, the Fire Marshal was busy for three to five days assisting the Town of Hillsborough during its ISO rating. There are some maps that are not accurate, and the Fire Marshal helped the Town of Hillsborough's Fire Marshal walk through the process. This will help the rating. Commissioner Foushee said that they are talking about meeting the minimum requirements for fire safety and there have been a lot of new facilities that have been developed in the last year in the County, and she would like to focus on prevention this year instead of suppression. Commissioner Gordon said that fire protection is important and the Sage report was not reflective of the rural fire department needs. She said that something more is needed to meet the rural area needs. Frank Montes de Oca said that he has been working with the Land Records Department and making sure that this position will be focused on 911 and GIS mapping. Donna Coffey said that the staff has talked about looking at fire inspection fees next year. Chair Jacobs suggested, in the future, funding additional positions through the fire district taxes rather than the property tax. Chair Jacobs said that he counted six departments with multiple requests, and he would like the departments to give the Board these requests in priority order. Commissioner Gordon asked that, when the Manager works with departments, if she asks staff to look for efficiencies and if there are any incentives when efficiencies are found. Commissioner Foushee left at 9:00 pm. Laura Blackmon said that some departments are doing this as they go through the budget process, but there are a lot of needs out there with not enough staff. Commissioner Gordon said to just have this mindset when going through the budget process. Laura Blackmon said that this is what staff brought to the Board when she recommended deleting the summer camp and after-school programs because other entities were already providing these services. f. County Employee Salary and Benefit Compensation Plan Laura Blackmon said that staff was going to give the Board more information to discuss such as general information. The staff was looking at not making a lot of changes this year. Human Resources Director Michael McGinnis said that since the last work session, he has been looking at alternatives with what was brought to the Board previously. The pay plan is still being worked on through the Archer Group. He has also received information from other organizations about how they are dealing with COLA and in-range adjustments. The health plan has an 11% annual increase, but he thinks that some changes can be made to bring this down to 7% or 8%. Laura Blackmon said that the numbers listed on line#14 and #15 were what she was going to recommend. The pay plan will not be ready by July 1st, and there have been discussions with staff about whether the COLA would be effective January 1st or next July. Regarding in-range, part of the problem is that in-range does not reflect performance and thus, it will cause compression. She said that she is reviewing the drivers for the compensation plan. Michael McGinnis said that, with the WPPR, the County does pay for performance (2% for Exceptional), and there is not enough difference to encourage this type of exceptional work. About 15% of employees are getting this. The Exceptional category is increasing because supervisors are looking at ways to compensate staff when there are not other means to increase salaries. He said that it will be important to move into a performance appraisal system that separates this and allows monitoring of performance with specific tools. Sheriff Lindy Pendergrass said that the Sheriff's Department has not asked for any positions since 1996 and the workload has increased 100%. He would appreciate anything the County could do for them. Laura Blackmon said that the Sheriff is asking for eight new deputies, and the vehicles come with the positions. There is also some replacement vehicles requested. Other Budget Drivers Laura Blackmon made reference to line#17, Open New County Facilities (including staffing and operating costs), which totals $2.75 million. Line #18 is the Outside Agency Funding of$246,629. Line#19 includes a 5% increase of County Operational Funding Associated with Inflation and Higher Costs. This includes the increase in costs of fuel, utilities, and supplies. Laura Blackmon said that the Board will be receiving the Manager's Recommended Budget during the regular meeting on May 20th Commissioner Nelson said that, during the retreat, the County Commissioners put out ideas for the budget. He asked how these will be factored in and Laura Blackmon said that the management teams are reviewing these, and many ideas are ones that they are already doing and are in the budget. Some of the ideas are long-range and will be coming back to the Board of County Commissioners within the next few weeks. Commissioner Nelson asked which ideas are in the budget and Laura Blackmon gave examples of the Farmers' Market and the animal tethering issue. Commissioner Nelson said that he is concerned that the Board had a retreat in which it discussed projects that needed more emphasis. He said that the way budget processes work the best is if the policy-making body tosses out ideas, discusses them, and then things get considered for the budget. He does not see where the Board has gone through this process. He does not think that this is good policy-making because the Board has tossed out ideas and there,has been no follow-up. Commissioner Gordon said that the Board did not adopt the goals and objectives and then relate the budget back to the goals and objectives. She said that she remembers a time when the Board did adopt goals and objectives and one of the check-off items in the budget was whether the item met one of the Board of County Commissioners' goals and objectives. Laura Blackmon said that, in order to do this, the Board would have to have a retreat in October or November because departments are turning in budgets earlier in the year. Commissioner Carey said that the Board has not adopted goals until late spring in the past and thus, at this point, only comparisons can be made. Commissioner Gordon suggested trying to finalize the goals for this year. She said that half of the County Commissioners will be new next year and she does not think that the Board will want to adopt wholesale the goals and objectives. Chair Jacobs said that Commissioner Nelson's point is well taken. He said that the Board does not have much clarity on how the budget relates to the Board of County Commissioners' goals. He said that when the County Commissioners come back after the break, they need to configure the entire process and the new Commissioners can participate, but at the same time they can get on top of what needs to be done quickly enough so that it does not affect the budget process. Commissioner Gordon suggested having an articulated set of goals and objectives for a retreat in November or December which will include the new Commissioners. Chair Jacobs suggested having a work session on September 9m to discuss the budget process. Commissioner Gordon said that in some years the County Commissioners have written a critique of the budget process before they went on break, and she recommended that they do this again. The meeting was adjourned at 9:32 pm. Barry Jacobs, Chair Donna S. Baker, CMC Clerk to the Board