County Board of Commissioners met for a special called meeting at 3:00 p.m. in
the Commissioners' Meeting Room of the Historic Courthouse on
were: Chairman Bill Moyer, Vice-Chairman
Also present were: Deputy Clerk to the Board Teresa L. Wilson, Sheriff Rick Davis, Captain Greg Cochran, Public Information Officer Pam Brice, Finance Director J. Carey McLelland, Research/Budget Analyst Amy Brantley, Engineering Director Marcus Jones, Associate County Attorney Sarah Zambon, Planning Director Anthony Starr, Code Enforcement Director Toby Linville, and IT Director Becky Snyder.
CALL TO ORDER/WELCOME
Chairman Moyer called the meeting to order and welcomed those in attendance. He stated that the purpose of this meeting was a Facilities Planning Workshop to continue Board discussion.
FACILITIES PLANNING WORKSHOP
During the discussion of this issue at the last Board meeting the
Commissioners requested some additional information. The consensus of the Board was to get to the
point of making some decisions today regarding facilities and move forward and
to conclude the meeting by 5:00 p.m.
Chairman Moyer requested the
Project Projected Cost Annual Debt Service
Estimate (15 yrs/4%)
Apple Valley/North High
Former Health Dept. Bldg.
$1,000,000 - $1,500,000
$90,000 - $135,000
Jim Wilhide and Dan Mace (of Moseley Architects) had prepared the above figures.
The question was raised as to what the best use would be for the old
Discussions were then centered on the former Chamber of Commerce Building: What fits best in this facility? Cost to up-fit the building dependent upon facility use. Rough cost estimate was $400,000, to make it usable office space.
Repairs and renovations
Campus-wide Repairs and
- Gravel Parking
- Paved Parking
The Commissioners and the School folks are looking at fast tracking the school repairs and renovations and Chairman Bazzle committed to being able to do these projects in 18 months.
Grand Total for the following Projects List = $31,404,304.
Apple Valley/North High Classroom Building $ 8,000,000
System-wide repairs and renovations $ 6,500,000
Campus-wide repairs and renovations $ 4,404,304
Former Health Department Building $ 1,500,000
Courthouse Annex/Justice Center (Sheriff -$6,500,000) $11,000,000
Grand Total = $31,404,304
Carey McLelland referred to a slide of the PowerPoint presentation. If the Board made the decision to finance the total costs for the above projects for 15 years @ 4% the total annual debt service payment would be $2,825,000. He discussed funding sources for the different projects and the debt roll-off that would occur each fiscal year. (Option #1) In this option the Board would use the full Capital Reserve Fund Balance of $2,326,195.
Carey McLelland then referred to Option #2, a pay-as-you-go option. He explained that the capital reserve fund balance stands currently at $2.3 million at the end of this fiscal year. He presented the annual cumulative debt service reduction that could be used. In FY 2010 there would be $3,098,872 available, in 2011 there would be $1,998,402, in 2012 there would be $2,337,074, in 2013 there would be $2,665,653 and in 2014 there would be $3,000,318.
then explained that Option #3 is a
Capital Reserve/Capital Interest Funding option. He had worked with Chairman
Moyer to prepare this slide. Chairman
Moyer explained that the other options make the assumption that the
Chairman Moyer’s Option #3 phases the projects in, doing the following:
Schools Maintenance, BRCC Maintenance, Old Health Dept., and Chamber Bldg. in 2010
Apple Valley/North High Debt Service (15 years @ 4%) in 2011
Justice Center/Courthouse Annex Debt Service in 2012
Chairman Moyer explained that he didn’t believe it is good business practice to finance maintenance projects with long-term capital debt. Chairman Moyer favors option #3.
Chairman Moyer asked Chairman Ervin Bazzle to speak to the maintenance projects and the time needed for those. Chairman Bazzle said if the Board of Commissioners tells him to do it in 18 months, then he will try to do it in 18 months. But his opinion is that it is preferable to have 2-3 years, need three summers. The most practical and best time table for the School Board is the one they put into their budget this year where the maintenance projects are phased in over a period of time.
Commissioner Williams feels the Board should push forward on these small projects. We are currently in a low cost environment. One of the major benefits of doing these small projects quickly is “job creation”. He feels it should be done as quickly and efficiently as it can be. Not only are building costs lower now but interest rates are also.
Commissioner Young felt these projects should be done in 3-5 years and should not be financed. He’d like to see them done in three years but if the economy deteriorates further or our revenues deteriorate, then we may have to extend to five years.
Commissioner Messer said the list is growing, “let’s stop the bleeding now”. He also was opposed to borrowing money for maintenance projects, ditto for the college maintenance projects.
Commissioner Williams has a big concern about depleting our cash. He doesn’t want to finance but feels that financing is better than depleting our cash. Cash flow is very important. He stated there are some unknowns in terms of what may happen in the way of state funding and the reduction of funds that we may receive plus the fact that interest rates are low and construction costs are also lower. He stated maybe at a future date we can either pay off debt with cash we’ve saved or pay cash for other projects instead of financing at that point in time.
Messer stated that we’re looking at $19 million for just the Apple Valley/North
Henderson project and the school maintenance and the BRCC maintenance. He favors some debt on some of the projects. About every two years the county has grouped
several capital projects together for financing purposes. In this economy he can understand going in
debt for $18 - $20 million but not for the $32 million needed to do the bulk of
the projects. He and Commissioner
McGrady are going to
Chairman Moyer made the first motion, to move Planning, Inspections, and Permitting to the old Health Department Building and to renovate it to the minimum extent necessary to house those facilities and that it be considered their permanent home which will give them some room for growth and include a meeting room that would be adequate to handle the needs of the Planning Department so they can have their own hearings and meetings in that building. Following some discussion, all voted in favor and the motion carried.
Chairman Moyer made the motion to move the Assessor’s Office and the Tax Collector’s Office into the 100 North King Street Building, basically doing the move as is but that the Board promptly study the recommendation received from the County Commissioners’ Association and then determine the minimum cost to make that space usable for whatever reorganization the Board decides on. All voted in favor and the motion carried.
Chairman Moyer made the motion not to plan to bring the old Chamber of Commerce building up to handicap accessibility but to study that further and work in conjunction with moves in the 1995 courthouse to see if we can make that into a record storage area, mainly for the 1995 courthouse. All voted in favor and the motion carried.
Chairman Moyer made the motion not to do any capital
projects this year but to identify the Apple Valley/North
Chairman Moyer expressed hope that the $8 million construction figure will hold. Chairman Ervin Bazzle (School Board) and Jim Wilhide were both questioned about the aggressive schedule. It will take about 6 months to develop the drawings and plans, go to bid about October\November, and by the end of the 2009 have the bids back and are ready to begin construction by the end of the calendar year. It will take 12-14 months for construction so two years from now we would be able to occupy the school. Carey McLelland stated that the Local Government Commissioner (LGC) will require bids in hand before they will approve the financing. The debt service would be about a quarter of a year for the FY 2009-2110 budget. The full amount would begin in FY 2010-2011.
Chairman Moyer amended his motion (above) to move on the schedule mentioned in the paragraph above we’d have to incur some debt service in the last quarter of FY 2010 and then the full amount in FY 2011.
Commissioner Williams was not ready to vote on this yet and wished to share with the Board a rather detailed spreadsheet that he had put together of projects that he would plan but he only finished it about 30 minutes prior to the meeting. He asked Amy Brantley if it could be put up on the screen so that he could address his ideas with the other Commissioners regarding the borrowing aspect for these projects, going ahead with them and doing the financing. The merit he sees is preserving the cash and taking advantage of the opportunities identified. He thinks the risk may be greater, that we will pay more in the long run if we wait around.
Commissioner Williams had laid out a list of projects that he felt were priorities (from his standpoint) and put them in order and then looked at what all funding sources are available, looking at each year going forward. He is very interested in protecting our cash flow.
CAPITAL FINANCING OPTION
SUBMITTED BY: COMMISSIONER MARK WILLIAMS
Project Total Cost Debt Servicing
School Renovations 6,500,000 585,000
BRCC Renovations (less major projects) 2,200,000 200,000
Old Health Department Renovation (Consider paying for from cash) 1,000,000 90,000
Funding Sources 2010 2011 2012 2013 2014
Capital Reserves + Surplus 2,236,195 3,599,935 4,318,676 4,776,089 5,062,081
Debt Service Reduction 772,677 1,998,402 2,337,074 2,665,963 3,000,318
Budgeted School Renovations Variance 1,805,339 755,339 25,339 (244,661) (244,661)
Budgeted BRCC Renovations Variance 90,724 - - - -
Interest – Unapplied Loan Funds 200,000 100,000 - - -
5,194,935 6,453,676 6,911.089 7,197,081 7,817,738
New Debt Servicing
School Renovations 585,000 585,000 585,000 585,000 585,000
BRCC Renovations 200,000 200,000 200,000 200,000 200,000
Old Health Dept. Renovation 90,000 90,000 90,000 90,000 90,000
1,595,000 2,135,000 2,135,000 2,135,000 2,135,000
Surplus / (Deficit) 3,599,935 4,318,676 4,776,089 5,062,081 5,682,738
Notes on School Renovations Budget
Budgeted for 2009 2,255,339 This figure is used as the base for the renovation budget
Preliminary Amount 2010 50,000 Assumes all but $450K to be included in renovation package
Projected 2011 1,500,000 Reduced due to renovations being caught up
Projected 2012 2,000,000 Incremental increase of $500K over prior year
Projected 2013-2015 2,500,000 Incremental increase of $500K over prior year
Takes advantage of opportunities of unusual environment of low interest rates and lower construction cost
Creates jobs and local economic stimulus due to numerous smaller projects
Cleans up back log of carryover repairs and capital improvement projects for the school
Financing instead of paying for projects from reserves will preserve cash to overset risk of uncertain economy
If reserves build as shown less borrowing on future projects, including the law enforcement center
Takes care of needed capital projects that have been planned for a number of years
spaces will remain available for other uses or to be sold (Old
Commissioner Williams referred to the above spreadsheet.
Young felt that this was a good proposal but felt that if we were going to
borrow any capital project money for maintenance services that we need to look
at long-term maintenance projects such as the chiller for Upward Elementary or
a roof repair. The smaller projects
should be done without borrowing money.
Commissioner Young stated that the Sheriff’s
Chairman Moyer felt that the Board was looking at an unrealistic number. He questioned the $11 million dollar cost of a 60,000 square foot building versus a 40,000 square foot building at $6 million. The cost per square foot figures are way out of line.
Mr. Jim Wilhide, of Moseley Architects, explained that the proposals were for different building types and different cost per square foot for those building types. When you get into the securities and the detention facilities the cost is much higher than standard construction. Mr. Wilhide reminded the Board that he worked with schools and these proposals were from Dan and not his expertise.
Messer felt that $6 million for a
feels that the public will perceive that the County has money and must spend
it. The issue should be whether the
project, in this environment, is essential to do. From the citizen’s standpoint, he feels if
there is extra money they would rather see the Commissioners’ reduce taxes next
year than spend it. He was not in
support of spending money on projects such as the
Commissioner McGrady has viewed the consolidation of the Sheriff’s Department as a significant priority since he came in as a Commissioner 4 ½ years ago and still believes it should be high on the list. Several of the buildings are clearly inadequate and are spread all over the place. Now is the time to do this as we have an opportunity with lower construction costs and financing rates. He would like to see the Commissioners put money in to get the architectural work done in this coming fiscal year with the idea that we would be ready to go (bid it and begin building) at least very early in the next fiscal year.
Young suggested building the
Chairman Moyer emphasized that once we have committed this year it doesn’t matter what happens to the economy two years down the road, the decision has been made, debt issued, and we are obligated.
Commissioner Young restated that this would not deplete the capital fund and at that time if we had to use the capital fund balance we could sell the Nuckols buildings, do away with some leases, etc. to create a fund balance.
Messer would not vote to have a 40,000 square foot
Davis stated that 40,000 square feet is exactly what the original discussions
were. This included the evidence storage
and consolidation of offices not including the 911 center. Sheriff Davis felt that building the
Chairman Moyer made the motion that the Board advances with the Apple Valley / North Henderson projects and be ready to go with bids in about 6 months with the bidding process lasting for 1 month, continue through the local government process and ready to begin construction between December and January. Debt serving would kick in sometime between spring or last quarter of 2010 and a full year in 2011. All voted in favor and the motion carried.
Discussion followed in regards to the length of the debt.
Commissioner Young made the motion that the Board approves financing long-term capital (projects which last longer than the length of the financing) maintenance projects, not to exceed $3 million. Commissioner Moyer restated the motion that the Board approves financing of capital projects for which the life of the project will exceed the length of the debt (15 years). The vote passed 4-1 with Chairman Moyer voting nay.
followed in regards to the
was not ready to take action on the
Messer was not ready to take action on the
McGrady was in favor of directing the
Commissioner Williams was in favor of committing to going forward and letting it be known that this is a project we are planning to do. We will have to determine the final figures and it may have to be pushed to the next year.
did not wish to send a message to the public right now that we are planning in
the next year to build a new
Commissioner Williams made it clear that his entire scenario has nothing to do with raising taxes. He is trying to formulate a plan that avoids raising taxes and does not set the Board up so that they are in a position that they have to raise taxes. His efforts were made with financing in a very favorable climate to preserve cash.
Young was concerned that the window of opportunity would be lost if the
Commissioner McGrady made the motion that the Board
assumed that the same concept in a previous motion of packaging renovations for
schools as long-term capital would also be utilized for
Commissioner Young made the motion that the Board
borrows the long-term capital maintenance projects for
McGrady raised the concern of the Fletcher library issue. The Town of
Commissioner McGrady made the motion that the Board adjourn at 5:15 pm.
Teresa L. Wilson, Deputy Clerk to the Board William L. Moyer, Chairman