STATE OF NORTH CAROLINA BOARD OF COMMISSIONERS
COUNTY OF HENDERSON JUNE 25, 2002
The Henderson County Board of Commissioners met for a special called meeting at 7:00 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-Chair Marilyn Gordon, Commissioner Grady Hawkins, Commissioner Don Ward, Commissioner Charlie Messer, County Manager David E. Nicholson, and Clerk to the Board Elizabeth W. Corn.
Also present were: Finance Director J. Carey McLelland, Assistant to the County Manager Selena Coffey, and Public Information Officer Chris S. Coulson.
CALL TO ORDER/WELCOME
Chairman Moyer called the meeting to order and welcomed all in attendance. He stated that this was the second public hearing on the County Manager=s recommended FY 2002-2003 Budget. He reminded anyone wishing to make comment that the comments were only to be directed to the budget. He did not put any time limits on comments but asked speakers to please be courteous of other speakers.
1. Larry Young - Mr. Young is a candidate for County Commissioner, District 3, Marilyn Gordon=s seat.
He spoke against the cutting of library hours and against the purchase of the Carolina Apparel Building on the Spartanburg Highway. He spoke against the cutting of monies from the County Health Department for medical supplies and flu shots.
2. Michael Brown - Mr. Brown is a candidate for Henderson County Sheriff.
Mr. Brown stated that he was a candidate for Sheriff. At a previous meeting, Mr. Brown had challenged the Board and the County Manager to consider and examine the Sheriff=s budget, to identify non-critical expenditures for reduction. He spoke at length to one such item for consideration: purchase versus rental of vehicles. It was his opinion that the County could purchase the vehicles for the same amount it pays to lease them, and sell them at the end of four years or 60,000 miles for 25% residual value.
3. Lynn Johnson - Mr. Johnson is the Chairman of the ACommittee of 100@.
Mr. Johnson stated the mission of the committee is to create jobs and increase the tax base. With the current economic slowdown, now is not the time to deviate from this task. In regards to the Lockwood Greene Master Plan, he stated that in consideration of the County=s fiscal condition, the consultants scaled back the recommendations from what they would typically recommend and how the best practice communities typically fund their operations. The Committee also scaled back the recommendation before bringing it to the Board. He requested the Board remember that requests for economic development are an investment.
4. Eva Ritchey - Ms. Ritchey is a candidate for County Commissioner, District 3, Marilyn Gordon=s seat.
Ms. Ritchey spoke regarding the Carolina Apparel Building, referring to it as a ARed Elephant@. She expressed concern over the cost, and the possible problem of inadequate future size. She stated that neither the community nor employees support putting the Health Department in the CAT Building, because it will not be sufficient for future needs. She stated that if it is the responsibility of government to create jobs, then it is also the responsibility of government to provide income to make that possible.
5. Dick Baird - Mr. Baird works for WHKP and is referred to as the Crab Creek Cracker.
Mr. Baird expressed his discouragement at not being asked to offer his expertise with the budget. He has spent many hours reviewing the budget, and offered suggestions at the last Public Hearing. He felt frustration at doing this work on behalf of the citizens, with no feedback from the Board.
Chairman Moyer questioned whether there was anyone else in the audience who wished to speak. There being no indication, Commissioner Ward made the motion to go out of Public Hearing. Mr. Nicholson indicated that the Board could have discussion while still in the Public Hearing. Commissioner Ward withdrew his motion. Chairman Moyer stated that the public input session would be closed, but the Public Hearing would remain open.
Chairman Moyer stated that the Board gets a lot of input from the public. They may not appear at the meetings, but are very comfortable sending letters, e-mails and other information. This information is given to Mr. Nicholson to digest, along with information he receives from the Commissioners during budget meetings.
Mr. Nicholson updated the Board on the following items:
1. Sales Tax Projection - He provided the Board a chart showing the projected sales tax to be collected in the coming fiscal year. The chart showed projected revenues of $3.3 million dollars. Of that, the County would receive $2.6 million in sales tax collections beginning August 1, 2002 and the balance of $699,516 from the >hold harmless= provision. He felt strongly that the budget should contain those sales tax figures. If they are taken out, it shows the State that there is no effect on the County budget. There was additional discussion on the state budget.
2. Lease Vehicle Program - Mr. Nicholson stated that staff calculations find that there is a savings of about $1,200 per vehicle to continue the leasing program. He outlined several variables for the Board to consider which included the guaranteed replacement program, interest earned by not purchasing offsets the leasing fees, and vehicles which are paid for by contracts and/or grants.
Commissioner Ward provided some background on the lease program. He stated that the lease program did straight-line the budget. Previously, there were years when 20 vehicles would be purchased, and others when there would only be two. The leasing program upgraded the County fleet, keeping cars on the road rather than in the garage.
Commissioner Hawkins expressed concern that the numbers compiled by Mr. Brown and those provided by staff do not correlate. He questioned what the state is selling the vehicles for. He stated than financing not withstanding, $500,000 could be used to purchase 20 vehicles each year.
Chairman Moyer recommended continuing the lease program as it has been working, and asking the County Manager to look into this and provide a more detailed analysis of the program around mid-year. Mr. Nicholson stated that he would have the analysis completed for the November expiration dates. Following additional discussion, much of it concerning use of confiscated vehicles, it was the consensus of the Board to proceed with Chairman Moyer=s recommendation.
3. Recommended Reductions List - Staff had reviewed the original recommended budget as well as the 3% cut lists from each department. Staff recommended a reduction to that original budget in the amount of $497,127. Mr. Nicholson did not make major changes to the schools, DSS or the Health Department since their final budgets will be largely determined by the final state budget. He then reviewed in detail the summary of changes to the recommended budget. For placement purposes, those funds were then placed in contingencies.
Mr. Nicholson then proposed that of the $1.2 million in the Schools Capital Reserve Fund, $500,000 be put back into the Schools Capital Account. The remaining $700,000 was proposed to remain in the Schools Capital Reserve Fund. This would allow some emergency capital money for the schools, or it could be used for future capital projects. This money was also placed in contingencies. That placement was done to keep the budget balanced.
Mr. Nicholson also reminded the Board that there had been $220,000 appropriated for FY 2001-2002 for the demolition of the courthouse annex, which would go back into the General Fund, and then contingencies. Commissioner Hawkins requested a breakdown of the $1.7 million currently in contingencies.
Chairman Moyer stated that each time a savings has been identified, it has been designated to go into contingencies in the event that the County does not receive the reimbursements of the sales tax dollars. He reminded the Board that there is now $1.7 in contingencies, reserved for problems in the coming year. Chairman Moyer asked what type of gap would need to be covered from contingencies if the sales tax dollars came in October 1st.
Mr. Nicholson stated that if we lost the first quarter, we would lose about $825,000. With the amount currently figured for contingencies, that gap would be covered. Commissioner Hawkins stated that he did not wish to start the year out assuming the state was going to allow for Article 44, but if they do it is easier to come back and identify what had been cut out.
Commissioner Ward had prepared a budget proposal for the Board=s consideration. It assumed a 3% cut across the county line, and allowed $500,000 to remain in the schools. He proposed using $1.2 million from the Schools Capital Reserve Fund, and $500,000 from the courthouse fund. If the Article 44 Sales Tax passes, that money could be put back into the Capital Account. He also assumed $500,000 in savings from a hiring freeze, which allowed $283,000 for flexibility. This plan also left $250,000 in contingency, planned for no tax increase and no cut in funding to non-profits. There was much discussion on how this Plan compares with other Plans in balancing the budget, especially in the areas of filling open positions.
Commissioner Messer stated that the Board needed to ensure that the libraries remain open as much as possible, and stay staffed. If the monies are received from Article 44 and the new tax, then the libraries can move forward. Mr. Nicholson noted three important issues going on at the libraries. First, there is an open maintenance position at the library that can go part-time. Second, the Library Board has looked at the possible reduction of Sunday hours. Finally, there would be a reduction in the amount of materials purchased for the libraries. If the Article 44 Sales Tax passes, those hours and other things could be added back in.
There was debate on whether the Board should pass a budget assuming monies will be received so the State will be forced to see the effect their withholding has on the County, or pass a budget assuming the worst case scenario of no reimbursements. There was concern among the Commissioners about coming to the point where services would have to be cut. It does not pressure the State to give the counties their money if counties present balanced budgets without those funds. There was much discussion on what type of budget should be passed.
Commissioner Messer felt it important that the citizens let their representatives know they are in support of this sales tax. Commissioner Gordon stated that she was not in favor of raising the sales tax, though she was going to be forced into doing so. She felt it was the wrong way for the State to balance their budget.
Chairman Moyer stated that the Board needed to give direction to the County Manager for the next meeting. There were a number of items that Chairman Moyer stated still needed to be discussed or voted on. He stated that he felt strongly about the economic development piece, and would recommend its funding. He asked for a straw vote, proposing that $69,000 for the Master Economic Development Plan be funded for the coming year. This would be in addition to $70,000. Following some discussion, it was the consensus of the Board to fund the Plan.
Commissioner Hawkins requested the County Manager minimize the amount of money to be taken out of the fund balance. Mr. Nicholson assured the Board that he was very conservative when it came to the fund balance.
Chairman Moyer then stated that he would recommend the $5,000 for the Alliance for Human Services. Past participation has been well worth this amount. The Community Foundation and the United Way have each paid $5,000 toward this service. It was the consensus of the Board to approve those funds.
Regarding the fire tax, Commissioner Hawkins expressed concern that there is a municipality that pays a lower fire tax than county residents. He stated that he would bring this issue back to the Board on Thursday.
It was also the consensus of the Board to have any monies in the Historic Courthouse Fund go into contingencies.
Commissioner Ward made the motion to close the Public Hearing at 8:56 p.m. All voted in favor and the motion carried.
Elizabeth W. Corn, Clerk to the Board William L. Moyer, Chairman