STATE OF NORTH CAROLINA BOARD OF COMMISSIONERS
COUNTY OF HENDERSON JUNE 27, 2002
The Henderson County Board of Commissioners met for a special called meeting at 1:00 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, Finance Director J. Carey McLelland, Assistant to the County Manager/Budget Analyst Selena Coffey, Public Information Officer Chris S. Coulson, and Deputy Clerk to the Board Amy R. Brantley.
CALL TO ORDER/WELCOME
Chairman Moyer called the meeting to order and welcomed those in attendance. He reminded everyone that the State had yet to pass a budget, and that situation has dealt this Board a hard hand with which to deal. He acknowledged that the Board would probably not be completely satisfied with the end result, but would do the best job possible.
FY 2002-2003 BUDGET WORKSHOP
Fees for Services
Selena Coffey spoke to the fees charged by various departments. She noted several increases in fees and answered questions from the Board for the following departments:
C Environmental Health
It was noted that if there are families that are unable to afford recreation fees, accommodations have been made. Mr. Nicholson stated that there is an informal process in place, and Henderson County will not turn kids away.
Review of Budget Options
Mr. Nicholson first answered a follow-up question from a previous meeting concerning how much money was in the Courthouse Fund. There had been $530,000 going into the Capital Projects Fund (Historic Courthouse and Human Services Building), which was partially to cover the demolition and debt service monies. Additional expenses that had been incurred were architectural, engineering and other miscellaneous costs. Thus far the County has spent about $300,000 of that money for those architectural costs. The Historic Courthouse project has been frozen, but the Human Services Building was continuing and therefore costs have continued. Because the Board did a Reimbursement Resolution, the County will ask for the $300,000 back and would replace those funds. It is the decision of the Board where that money will go, but the fund must be in the black at the end of the year.
Mr. Nicholson then reviewed a comparison of three possible budgets. He noted that the County Manager Recommended Budget numbers included the cuts proposed at the previous meeting. The chart reviewed was as follows:
Comparison of Recommended, Plan A and Plan B Budgets
Co. Mgr Recommended Plan A Plan B
Sales Tax $15,203,451 $17,649,456 $15,203,451
Intangibles Tax Reimbursement $ 2,023,496 $ - $ -
Food Stamp Tax Reimbursement $ 35,356 $ - $ -
Homestead Tax $ 41,460 $ - $ -
Inventory Tax Reimbursement $ 1,161,028 $ - $ -
Transfers $ 627,797 $ 627,797 $ 1,370,326
Appropriated Fund Balance $ 709,882 $ 709,882 $ 1,506,690
Total Revenue Changes $19,802,470 $18,987,135 $18,080,467
Difference $815,335 $906,668
Contingency $1,722,003 $906,668 $0
Difference $815,335 $906,668
County Manager Recommended Budget
These numbers included the $3.2 million in tax reimbursements from the state. He also had $627,797 in Transfers, and noted for the Board that the figure included $500,000 from the schools Capital Projects Fund. These changes had caused him to increase the amount in Contingencies.
These numbers included the proposed Article 44 Sales Tax, which increases the Sales Tax revenue to $17,649,456. This figure assumes the Article 44 Sales Tax will begin in October with no hold harmless. It does not include any reimbursements, and the amounts in Transfers and Appropriated Fund Balance were consistent with the County Manager=s Budget. This reduced the amount of Contingencies to $906,668.
These figures do not assume that the county will receive the Article 44 Sales Tax or any reimbursements from the State. Transfers would go to $1,370,326, and would be comprised of the aforementioned $627,797 plus an additional $742,529. That amount is the balance of the $1.2 million that was in the school Capital Fund, and would bring it down to $0. It also included an additional $796,808 coming from Fund Balance, and reduced the amount for Contingencies to $0.
Mr. Nicholson stated that there is 13.5% currently in fund balance, and Plan B would drop that amount to around 11.5%. This amount is about average with other counties our size, and should not affect our credit rating. He then outlined the difference in Plan A and Plan B.
Mr. Nicholson then discussed what would happen if some money does come back from the state. The board could decide to put money back into contingencies, School Capital Projects from $500,000 up to $1.2 million, or lower the Fund Balance Appropriation. There was discussion on how these numbers could be moved with no idea of what the State will do eventually.
Commissioner Hawkins mentioned changes to the recommended budget. First was the adjusted budget based on the 3% cut budget, which became the 1% cut budget. He stated that there may be room for some additional cuts in the Department of Social Services, Sheriff=s Department and the Garage. Those additional cuts included elimination of some positions (not currently filled), wearing apparel, and a downgrade in the octane gas used. He stated that the County Manger=s original recommendation had been for $77 million, and that even after the cuts the recommendation was still for $77 million. He was concerned that this budget has largely been a paper exercise.
Chairman Moyer stated that he did not agree that this had been a paper exercise. He felt it was very important to build up the contingencies given the situation with the State. He was not in favor of reducing the budget further given the risks in the coming year.
Commissioner Gordon agreed, stating that most departments had already submitted a bare bones budget. The budget they had been presented could be funded with the existing property tax rate, and assuming receipt of the money the County is entitled to. There is a plan in place to provide for the unexpected, and therefore no need to pick out small amounts of money from the whole.
Commissioner Ward stated that in his proposal (Plan B), he had a $250,000 contingency but left some flexibility in hiring. He felt that the Board had not done a lot of work on the budget, because the budget is basically the same as last year with modifications in certain departments, and some increases built in for inflation. He expressed concern that the Board had not considered the Budget by line item. Commissioner Ward stated that he felt the Board had negated its responsibility for this budget and had left the responsibility for it to the County Manager.
Chairman Moyer stated that Commissioner Ward was speaking for himself when he stated that the Board had not looked at the specific line items. He reminded everyone that the Board had been given the budgets, they had met with the schools and individually worked on the budgets with departmental advisory committees.
Commissioner Ward stated that he had several questions on specific line items, but had not had a chance to raise them because the Board had not met with departments. Chairman Moyer reminded Commissioner Ward that the County Manager had asked the Board which departments they wished to meet with, and the Board answered. Commissioner Ward then stated that they don=t bring in departments except for the big three, unless there is a specific issue.
There was some additional discussion among the Board about how the budget process has worked this year.
Commissioner Messer commented that the County Manager had presented a budget, and the Board had met with the departments with which they wished to meet. He spoke in support of the 2 cent sales tax, stating it was the fairest method.
Commissioner Ward expressed again that he was not unhappy with the budget in general, but that they had not looked at significant changes in specific line items. He was not satisfied with the procedure the Board had followed, stating that he did not believe the Board was thorough enough to answer questions that may arise in the future.
Chairman Moyer raised a question on the destruction of old apple orchards. As he understood it there had been a matching fund for $15,000 to help with that program, and wished to make sure it had remained in the budget. Mr. Nicholson stated that it did end up in the budget, and is only for people who are below the median income.
Mr. Nicholson reminded the Board that the Criminal Justice Partnership Act monies were eliminated from the Governor=s budget. A portion, though not all was put back in by the Senate, but certain programs were eliminated. Pre-Trial programs were not eliminated, so if the budget ends up with money in the Pre-Trial programs, it could be reinstituted.
Commissioner Messer spoke in favor of the increase in fees for the inspections department. There is a lot of construction going on in the county, and the department is already working with some temporary help.
Commissioner Messer then requested that with the additional money being spent on economic development, the Board receive a quarterly report from the Chamber of Commerce on where those monies were being spent.
Commissioner Gordon stated that a written report is received monthly, but a verbal report from the Chamber quarterly would be a great idea. The results from some of the businesses that have received assistance have come in much higher than anticipated, and the Board should hear how well those programs are working.
Commissioner Ward questioned whether they were going to vote on the budget or continue asking questions. Mr. Nicholson stated that staff would be happy to do whatever the Board wanted, but would be happy to meet with Commissioners after the meeting. Commissioner Ward stated that he did not feel his questions would change the bottom line. It was the pleasure of the Board to ask questions of staff following the meeting, and bring back specific items at a future meeting.
Chairman Moyer suggested Plan A as a basis for staff to proceed. Chairman Moyer took a straw vote on proceeding with Plan A, with Commissioners Messer, Moyer and Gordon agreeing to proceed, and Commissioners Ward and Hawkins disagreeing with this plan.
Plan A Budget Ordinance
Mr. Nicholson stated that currently Plan A does contain the money, $85,633, for the Criminal Justice Partnership Program (CJPP). He proposed that be deleted from this budget. This changed the ATotal General Fund Revenues@ to $77,053,748, and the ARestricted Intergovernmental Revenue@ to $12,108,433. Ms. Coffey requested that under AGeneral Fund Appropriations@, the Board strike out the amount for CJPP replacing it with $0. She then requested that the amount for the ROAP Program be changed from $226,039 to $226,038.
Ms. Coffey then spoke on the various Sections of the Budget Ordinance. She added the Schools Capital Projects Fund, which will become Section 9. There was discussion on Section 13 - Tax Rates Established. This established the property tax rate at 50 cents, no tax increase. It also set the individual Fire District Rates.
Commissioner Hawkins expressed concern that the rates being paid for the same volunteer fire companies, vary between municipalities and those in the county. This has occurred in Fletcher and Laurel Park. Fletcher had adjusted their rate accordingly, but the contract Laurel Park has with Valley Hill only has those residents paying .070. The rest of the county residents were paying .090. He could not determine a reason why county residents should pay 2 cents more for the same fire protection. He felt that there should be some discussion with Valley Hill concerning what rate they expect beginning next year.
There was discussion between the Board and Mr. Nicholson on the future resolution of this issue.
Mr. Nicholson discussed Section 14 - Restrictions: Budget Officer, numbers 7, 8 and 9. Last year the Board passed a Resolution establishing a base salary for the Sheriff, Tax Collector and Register of Deeds. He asked that the following wording be added to each of those lines: AHowever, the Board reserves the right to adjust the Elected Officials Salary based on the Resolution passed by the Board on December 3, 2001 establishing the salary.@
Chairman Moyer made the motion to approve the budget as presented with the changes mentioned: the additional section, the renumbering of the sections to add the Schools Capital Project Fund, the additional language to items in Section 14, #7, 8 and 9, and the dollar changes required to effect the elimination of the CJPP.
A vote was taken on Mr. Moyer=s motion and the motion passed three to two with Commissioners Hawkins and Ward voting nay.
Commissioner Messer made the motion to adjourn the meeting at 2:40 p.m. All voted in favor and the motion carried.
______________________________________ ______ ____________________________
Amy R. Brantley, Deputy Clerk to the Board William L. Moyer, Chairman