October 16, 2002 Work Session
282
A Joint Worksession between the Board of Supervisors and the County Finance Committee
was held on October 16, 2002, at 9 A.M., in the Board Conference Room, County Administration
Building, 107 North Kent Street, Winchester, Virginia.
PRESENT
Chairman Richard C. Shickle; Robert M. Sager; Margaret B. Douglas; Sidney A. Reyes;
Gina A. Forrester; and Lynda J. Tyler.
ABSENT
Supervisor Smith absent due to illness. Supervisor Sager was not present at start of session.
STAFF
Administrator Riley; Assistant Tierney; Finance Director Shiffler; Budget Analyst Place;
Deputy Clerk Bayliss. Members of County Finance Committee.
Administrator Riley explained what he hoped to accomplish at this session and made the
following statement concerning the upcoming budget:
As we are all aware, the FY04 budget will present enormous funding challenges. We face
increased school debt, the opening and staffing of a new high school, a suffering economy that limits
revenue growth, and the risk of reductions in state funding that have not yet been released by the
Governor. These events have caused us to look at our budget process and make changes that will
enable us to get through this difficult time.
At this time, we will discuss with you a list of Statements Regarding the Preparation ofthe
FY 04 Budget that will give us the foundation to make decisions and give staff direction in preparing
the budget. This list can be altered in the beginning of the process, but should be closely followed
during the process if our goals are to be met.
Next, we will discuss Financial Terms and Clarifications. as it Relates to Frederick County.
The purpose of this discussion is two fold. First, it will put everyone on the same page by defining
financial terms frequently used by county staff. Second, it will address several rumors about the
county's excess reserves. These rumors distort the facts by creating confusion and misinformation.
Lastly, we will discuss trends in revenue, expenditures and fund balance. After this
information is presented, we will present preliminary budget funding options for discussion. It needs
to be stressed that these options are preliminary and are pending information regarding state funding.
They are presented for preliminary discussion only in an attempt to evaluate the impact of each
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option.
We encourage dialogue from both the Finance Committee and the Board of Supervisors
during this difficult budget. While all parties need to understand the sacrifice necessary to balance
this budget, there must be a consensus on the end result which is a balanced budget that meets the
needs of the Frederick County community.
Supervisor Reyes referred to the information entitled Statement Regarding the Preparation
of the FY 04 Budget and bullet #three wherein it states that state cuts carmot be absorbed by the
locality. All state cuts will directly impact the agency/departmentlboard and require additional cuts.
He feels this is "pretty tough."
Supervisor Forrester addressed bullet # two which refers to a tax increase being probable and
that extreme efforts will be made to minimize the increase in the tax rate. She prefers not to see this
wording at this time.
Administrator Riley reviewed the information Financial Terms and Clarifications as it
Relates to Frederick Countv wherein he advised these are committed funds.
Supervisor Forrester asked of the $19.9, how much is committed.
Director Shiffler advised basically all.
Administrator Riley asked the Board to review all the information being provided, and ifthey
had any questions to please let him know. He reviewed with the Board the packet entitled A Look
at Frederick Countv's Maior Revenue Sources. Fund Balance Analvsis. and FY 04 PreliminarY
Funding Options.
Supervisor Reyes asked about the 70% car tax reimbursement from the state.
Administrator Riley explained how this works.
Committee Member Don Butler advised of those industries located within the County that
do not have a lot of machinery and tools; therefore, revenue is not as much in the form of taxes from
these companies.
Supervisor Forrester asked about the ratio on machinery and tools after four years and what
the decline would be at that time.
Administrator Riley explained how this works and what has transpired over the years.
Supervisor Forrester asked the amount for the County's bond rating.
Director Shiffler advised it is 15% and we are currently below that. She does not recommend
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that we go any lower.
Commissioner Murphy advised what happened in 1998 when there was a downturn in the
economy.
Administrator Riley addressed the Preliminarv Funding Scenarios as presented in the packet
of information provided to each Board member.
Committee member Butler advised there is not mention of a second middle school.
Administrator Riley advised this is a year with a difficult budget.
Committee member Butler stated that he feels the school is "sneaking in" and the County
cannot afford it.
Committee Member Wilkins advised the school is in there.
Supervisor Reyes referred to Scenario A showing no tax increase. He asked Administrator
Riley to provide him with the figures showing the amount the cuts would need to be in order to
accomplish this.
Administrator Riley advised that under County Government the dollar figure is $3.2 million,
this equals a 15% cut, and under School Transfers, $8.0 million equals a 10% cut.
Administrator Riley advised staff would be given the directive to work on Scenario A only
at this point.
Supervisor Forrester questioned what would happen with the opening of Millbrook High
School and the $3.8 million.
Chairman Shickle asked ifbullet #10 dealing with the funding for new positions and the fact
that it is stated this will not be considered during the preparation of the FY 04 budget, if in fact this
is feasible. He further asked for a timetable showing where staff was with this budget, and to let the
Board know when this information was available.
Director Shiffler advised staff would be starting at present level.
Commissioner Murphy asked if everyone understood about the "one time money?"
Chairman Shickle asked if there is a general consensus, that this is how we are going
forward?
Supervisor Reyes advised that he felt this is a good start.
Administrator Riley advised the next step is allocations.
Committee member Wilkins advised that he would like the September 2002 school
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emollment numbers.
\2.--~! 0_ ~
Richard C. Shickle
Chairman, Board of Supervisors
fit&-KI
Jo . Riley, Jr. .
Cle k, Board of Supervisors
Minutes Prepared By: ~>L,,;>~.T ;6")., llu,,-~)
Carol T. Bayliss
Deputy Clerk, Board of Supervisors
Minute Book Number 28
Board of Supervisors Budget Worksession with Finance Committee 10/16/02