STATE OF NORTH CAROLINA BOARD OF COMMISSIONERS
COUNTY OF HENDERSON APRIL 4, 2002
The Henderson County Board of Commissioners met for a special called meeting at 4:00 p.m. in the Commissioners' Conference Room of the Henderson County Office Building at 100 North King Street, Hendersonville, North Carolina.
Those present were: Chairman Bill Moyer, Vice-Chairman Marilyn Gordon, Commissioner Don Ward, Commissioner Charlie Messer, Commissioner Grady Hawkins, County Manager David E. Nicholson, and Clerk to the Board Elizabeth W. Corn.
Also present were: Assistant to the County Manager Selena D. Coffey, Finance Director J. Carey McLelland, and Public Information Officer Chris S. Coulson.
WELCOME AND CALL TO ORDER
Chairman Moyer called the meeting to order. He welcomed those in attendance, stating that today=s meeting was a workshop on the 2002-2003 Budget, and the major facilities plans for the coming years. He stated that the state is currently in a difficult budget situation, which may continue for the next two years. Because this will create a difficult budgetary time for the county, actions have to be taken with that consideration.
Mr. Nicholson stated that staff is on track to present a budget to the Board in May. The last of the departments has just submitted their budget, so today=s information is a quick preliminary look at the budget. He presented a detailed printout of general fund revenues. He pointed out the following areas of interest:
1. Property tax levy - This shows an increase of approximately $3,000,000 over last year. Some of that is a direct reflection of economic development within the county.
2. Article 39, 40 and 42 Sales Tax - This is a number that is very hard to pinpoint because we do not receive the 3rd quarter sales tax until the middle of May. This only gives staff two cycle on which to base their estimates, so they have taken a very conservative approach to that number. There was much discussion concerning the possible growth in sales tax, and the new 2 cent sales tax.
3. Ambulance Fees - There is a substantial increase in ambulance fees. This is due to an increase in the per mile fee charged.
4. Carolina Mountain Land Conservancy - This is a grant that is currently being worked on.
State and Federal Revenues - Mr. Nicholson stated that the trickle down theory is starting to apply itself in county government. We are now seeing bits and pieces of reductions in programs and funding. Overall the total revenue increase at this time is about 2.1%. Chairman Moyer questioned the difference in the grand total on this sheet versus what is in the budget ordinance. Mr. Nicholson stated that the difference is due to changes in federal and state funding. These are just straight pass through=s of over-collections from federal and state programs.
Commissioner Hawkins questioned the line item dealing with AWelfare to Work@. It is budgeted in 2003 at $0. This information was based on the DSS budget, on which it was indicated that the county would not receive revenues for that program in the next fiscal year.
There was additional discussion on line items that might be affected by a possible withholding of funds by the state. In particular, Mr. Nicholson answered questions concerning mental health (Trend) issues and franchise taxes.
Mr. Nicholson then reviewed the AOverview of Major Revenue and Expenditure Growth Comparison of FY 2002 Budget to FY 2003 Expenditures@. The number for Property Tax was up just over $3,000,000. Mr. Nicholson stated again that this is due in large part to the economic development program within the county. There was an increase indicated for Federal and State Revenue of $254,098, but he believes that number will probably shrink.
Some of the major requests that have been received have come from Public Schools, the Community College, Medicaid, Social Services, Public Health, Debt Service and Economic Development Incentives. The total of these expenditures totals $3,402,699. There was much discussion on these expenditures, especially in the area of Medicaid costs.
Mr. Nicholson then discussed the State Tax Reimbursements. These revenues are projected to be $3,261,340. These are scheduled to be distributed throughout the year. The budget has been built around these numbers, but the contingency plan must also be built if these monies are not received.
There was some discussion on the Animal Shelter. Mr. Nicholson reminded the Board that the Board of Health is working on this process, looking at the operational issues. They are focusing on what services the Board of Commissioners and the Board of Health want to provide for animal services within the community. Within the Health Department budget there is a request for general maintenance on the existing building if it is not replaced.
Human Services Building
Mr. Nicholson began with discussion of the schematic design of the human services building. The architects have been informed that the design of the building should be realistic, and able to serve the needs of the county. He presented the draft drawings of the building, and explained several features to the Board. The north elevation shows the building from Spartanburg Highway, and the southern elevation is from Old Spartanburg Road. He located on those drawings the areas designated for the Department of Social Services and the Health Department.
Mr. Nicholson highlighted the Child Protective Services areas for the Board. He noted several private entrances, as sometimes children need to be moved in and out of the facilities. He also noted the central file storage area. This area has to be done a certain way now, all those files have to be locked up and secured due to new HIPPA requirements.
Both the Department of Social Services and the Health Department have signed off on these drawings and are ready to proceed.
Mr. Nicholson then reviewed the budget for this project. He reminded the Board that they are still in the estimate stage, but the numbers so far look good. He stated that what they now need is the Board=s permission to move on to the design and development stage. The building and the properties located behind it have been acquired for $2.6 million dollars. All of this amount was financed.
Beam Construction Company, the company that built the new jail, has come back with an estimate of $4.4 million dollars. That is about $1 million less than on the last set of budget numbers. There are also the Architectural and Engineering fees, a security system, telephone systems, cameras, records storage, and a contingency fee.
The Land Development Building has been appraised, as the sale of such is part of the plan. The appraisal on that building has come in at $1,014,000. To be conservative, Mr. Nicholson is using 80% of this number for purposes of this presentation.
The combination of these figures brings the bottom line on this project to $7.7 million. The interest rate on the loan is 6% for 20 years, making the annual debt service $662,000. DSS will have indirect costs for their use of that side of the building, amounting to about $235,000. In the current years budget, debt service on the Carolina Apparel Building was $325,000. Mr. Nicholson also estimates once the Land Development Building is sold, it will generate about $4,000 each year in property taxes. This brings us $98,000 away from the annual debt service payment, so we are right on the budget for this building.
Mr. Nicholson presented the architectural drawings for the Historic Courthouse. He reminded the Board that this would be a joint project between County Administration and Travel and Tourism. There were several schematic elevations shown, many very similar to plans seen earlier. He stressed that the dome should be gold, as it had been at some point. He then discussed the proposed stage and fountain, several aspects of the two annexes, entrances and exits, and the new addition to the building. He also pointed out the areas that have been designated for the various administrative departments.
He informed the Board that he is currently working with Travel and Tourism and Freeman White to design the lockdown system for the facility. There are times when Travel and Tourism will be open when other offices are not, and vice versa. There is also a room planned for the building that could be used by the community during otherwise non-business hours.
The estimate on this building has come back at $4.6 million dollars. That is about $1.5 million dollars different than the last time the Board saw this budget. Mr. Nicholson has planned for a 10% contingency for this project because the project is not as far along as the Human services Building. The budget includes $250,000 for the jail demolition, $400,000 for fees, $300,000 for FF&E, and the project contingency to bring this project to right at $6.3 million dollars.
There have been appraisals for both the Travel and Tourism building as well as the Nucholls Building, allowing for an 80% buydown. The combination of these figures brings the bottom line on this project to $5 million. The interest rate on the loan is 6% for 20 years, making the annual debt service $429,000. This would free up the McAllister lease, and if the minimum to current debt service payment for Travel and Tourism is applied, it totals about $91,000 for offsetting revenues. The debt service payment would then be $429,000, less the property tax, less the $91,000. In the current years budget, debt service on the Historic Courthouse was $280,000. That puts the net difference in the overall budget at about $52,000. Mr. Nicholson noted that it would only be $76,000 more if it was financed for 15 years. If this project is begun in January 2003, it could coincide with another set of school projects.
Mr. Nicholson answered several questions from the Board on the time frame, some budgetary figures not used in the previous years budget, and the $1.5 million dollar lower estimate. Commissioner Hawkins questioned the payment that could be expected for use of this building by Travel and Tourism. Commissioner Gordon answered that the Travel and Tourism Board had voted to support going forward with a move to the Historic Courthouse based on the understanding that their contribution would be for the life of the loan. Travel and Tourism has to provide itself a facility, and can make the determination on where that facility might be.
Commissioner Hawkins made the motion to separate the two projects, and give direction to staff to proceed on with the Carolina Apparel Building, and also direct staff to put a referendum on the upcoming election for a $6 million dollar financing for the Historic Courthouse.
Chairman Moyer spoke to the motion. He stated that with the amount of money being discussed, and uncertainty about the State budget, he felt it would be a mistake to move forward with the Carolina Apparel Trading Building (CAT). He stated that he felt the project had been a mistake from the start, it is not a good project, that it should be suspended, and other alternatives sought. He stated that the site may be appropriate, but the existing building is not. He felt that all monies set aside for debt services should be put into capital reserve for buildings, and we will have it for future capital projects. He does not support moving forward with this project at this time.
Commissioner Ward stated that he felt the two projects should be separated. He agreed that the CAT Building site was what had been purchased, and the building was a plus if it can be used. He did not believe that now was the time to spend money on long range financing.
Commissioner Gordon felt it would be appropriate to proceed with the Human Services Building. The departments that would move into this building are handicapped in their operations because there has been no action on similar projects over the years. She stated that we do have to be careful on the timing, but the estimates are coming in lower because of the timing. Construction companies are looking for business, so it is a good time to build. We need to use the resources we have to do what we can, but hold back where we don=t need to act. She strongly believed that the two projects should be separated, and proceed with the Human Services Building.
Commissioner Messer agreed with Commissioner Hawkins motion to separate the projects and put the Historic Courthouse on the back burner for now. There should not be a time factor put on that. He stated that DSS and the Health Department are in a bad situation as far as space is concerned. He supported going to the next phase with the Human Services Building, and putting the Historic Courthouse on hold.
Commissioner Gordon asked Commissioner Hawkins if he would consider revising his motion. Since he has made it clear that he would like to separate the two issues, would he revise his motion so that it could be voted on in two pieces. First on the Human Services Facility, and then on the Historic Courthouse.
Commissioner Hawkins stated this Board and previous Boards have struggled with this for some time. The Board is now in a position where it needs to get the hard figures and move forward. On the Historic Courthouse, it is fair to the people to allow them to decide what to do. No one wants to see it torn down, fall down, or go away, so there must be some solution. There must be some avenue that most people can agree to, though it is a hard decision to make. We do have the opportunity to let the voters decide with an upcoming election, so he preferred to keep his motion as it was presented.
Commissioner Gordon questioned why this didn=t go to the voters a few years ago when the county made application for $5.5 million to do this project. Commissioner Ward stated that sequence did not line up to group such a referendum with the referendum on the ballot for school projects.
Commissioner Messer stated again that to put the Historic Courthouse on hold until we realize the full impact of the state budget crisis, is the best situation.
Commissioner Gordon reminded the Board too, that if it goes on the ballot and is supported, the Board is committed to doing the project regardless of other projects that might come up.
There was additional discussion concerning the implications of a bond referendum.
Chairman Moyer stated again that because of the economic situation with the state, both projects should be put on hold.
Commissioner Hawkins called the question on the motion. Ms. Coffey reminded the Board that the motion had dealt with separation of the projects, directing staff to move forward on the Human Services Building, and putting the Historic Courthouse renovation on a referendum in the upcoming election. The motion failed 4-1 with Commissioner Hawkins voting aye.
Chairman Moyer made the motion to consider the Historic Courthouse and the Carolina Apparel Building separately for the purpose of determining what will be done on each project. All voted in favor and the motion carried.
Chairman Moyer then made the motion to put the Historic Courthouse project on hold temporarily and nothing further be done on it, and the monies that are in the budget for that project be put in a capital reserve account for building projects, until the board decides further.
There was much discussion on the specifics of this motion. The $280,000 that has been set aside in this years budget is already designated to go to the capital projects fund. It will carry over to the next year. Mr. McLelland will reserve this money as fund balance in the capital projects fund, it will be reserved fund balance.
Following discussion, Chairman Moyer amended the motion to put the Historic Courthouse project on hold temporarily and nothing further be done on it until the Board decides further on this project after getting clarification of the State financial situation and it=s impact on us. The motion carried 4-1 with Commissioner Hawkins voting nay.
There was additional discussion concerning the need for a referendum, and the amount of time it would take to send this project back out to bid. Mr. Nicholson believed it would take approximately six months.
Commissioner Gordon informed the board that she has had discussions with a number of groups and has been pleased with the support she has heard regarding use of the building. Putting this project on hold allows community groups some time to come up with uses other than County Administration.
Commissioner Hawkins made the motion that staff be directed to proceed on with the design, architecture, and funding package, for $7.7 million for the Carolina Apparel building.
Mr. Nicholson reminded the Board that that was the preliminary amount. It might be less, it might be more. There followed discussion on which budget year this would be done in.
The Board took a five minute break.
Mr. Nicholson clarified that this project probably still needs four months worth of work. The ideas are there, but it is still a long process once you go into the design phase and start working on the real details of the building. His hope would be that some time in the early fall it could go out to bid.
There was much discussion about making the decision on this building prior to seeing the budget.
Chairman Moyer restated that the motion as he understood it was to move forward with the Carolina Apparel Building. The motion carried 3-2 with Commissioner Ward and Chairman Moyer voting nay.
Commissioner Ward made the motion to put the Historic Courthouse on a Bond Referendum.
The motion failed 3-2 with Commissioner Hawkins and Commissioner Ward voting aye.
Chairman Moyer questioned whether there were any departments the Board would like to have detailed meetings with prior to receiving the budget. Commissioner Hawkins stated that they will probably have to meet with the Board of Education, and possibly with DSS. These meetings can wait until after presentation of the preliminary budget. Commissioner Ward stated that the Board should also plan to meet with Blue Ridge Community College. Commissioner Messer asked about budgets received from the fire departments. Mr. Nicholson stated that these will go to the Fire& Rescue Advisory Committee for review, and they will send their recommendations to the Board of Commissioners. It was the consensus of the Board to hold off on any meetings until after presentation of the preliminary budget
There being no further business to come before the Board, Commissioner Messer made the motion to adjourn the meeting at 6:15 p.m. All voted in favor and the motion carried.
Elizabeth W. Corn, Clerk to the Board William L. Moyer, Chairman