January 19 2011 Minutes-Budget Work Session with Finance Committee184
A Work Session of the Frederick County Board of Supervisors and the Frederick County
Finance Committee was held on Wednesday, January 19, 2011, at 8:30 A.M., in the First Floor
Conference Room, County Administration Building, Winchester, Virginia.
PRESENT
Chairman Richard C. Shickle; Vice - Chairman Bill M. Ewing; Christopher E. Collins;
Charles S. DeHaven, Jr.; Gary W. Dove; and Gene E. Fisher.
ABSENT
Gary A. Lofton.
OTHERS PRESENT
John R. Riley, Jr., County Administrator; Kris C. Tierney, Assistant County
Administrator; Jay E. Tibbs, Deputy County Administrator; Cheryl B. Shiffler, Finance Director;
Jennifer Place, Budget Analyst; Sharon Kibler, Assistant to the Finance Director; Finance
Committee members Ritchie Wilkins, Stephen Swiger, and Ron Hottle; Ellen E. Murphy,
Commissioner of the Revenue; C. William Orndoff, Jr., Treasurer; Lisa Frye, Finance Director,
Frederick County Public Schools; Al Orndorff, Superintendent for Administration.
CALL TO ORDER
Chairman's Shickle called the work session to order.
FY 2011 BUDGET WORK SESSION
Administrator Riley provided an overview of the work session. He stated the
Commissioner of the Revenue would go over revenue estimates following the Finance Director's
review of proposed scenarios, and he would provide an overview of the impact of each scenario.
Commissioner of the Revenue Ellen Murphy provided some preliminary revenue
estimates. She noted:
- Real estate hearings by the assessors are over and land use is almost complete, but the
Board of Equalization is yet to meet. The majority of appeals wanted property values
lowered more, but there were a few wanting their values raised.
- Industrial and business equipment appeals are occurring on a regular basis. Her
department is in touch with the county attorney and the Department of Taxation on
some filing issues. She anticipates a loss of revenue upwards of $1,400,000 including
prior year adjustments. The machinery and tools estimates include reductions in two
major industries based on recent activity and one large increase. She would know
more after the filing deadline of March 1, 2011 unless there are a number of filing
extensions.
- She just received NADA valuations on personal property.
- Personal property estimates include the Personal Property Tax Relief from the State
that is applied to qualifying bills.
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Board of Supervisors and Finance Committee Budget Work Session of 01/19/11
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- Public Service Corporation property is all over the map. Her department does not
know what to expect for 2011 nor does the State.
Finance Director Shiffler reviewed FY 2012 proposed budget scenarios:
- Scenario A — $125,611,341 is based on current level expenditure and fund balance
funding and a revenue neutral real estate tax rate.
- Scenario B - $121,311,341 is based on reduced expenditure funding, no fund balance
funding, and a revenue neutral real estate tax rate.
- Scenario C - $118,811,341 is based on reduced expenditure funding, no fund balance
funding, and the current real estate tax rate.
- Scenario D - $123,111,341 is based on reduced expenditure funding, current fund
balance funding, and the current real estate tax rate.
Administrator Riley reviewed the affect of each of the proposed scenarios on county
operations:
- Scenario A — allows the county to operate at current level spending. Cuts will have to
be made to the budget to absorb increases in health insurance, retirement funding
rates, utility costs, gasoline costs, and funding to joint projects like the regional jail,
which has experienced increased county usage. State reductions are unknown at this
time.
- Scenario B — presents cuts to schools in the amount of $2.4 million and cuts to the
general fund in the amount of $1.8 million. Budget cuts would impact public safety.
Proposed cuts could include:
• 10% reduction to outside agency contributions, which will result in a savings
of $300,000.
• Reduction in public safety workforce of 20 employees saving approximately
$900,000.
• Elimination of Fire and Rescue Volunteer Length of Service program saving
approximately $80,000.
• Defer a net 2% cost to all employees for their retirement which saves
$400,000.
• Reduce Social Services' local funding by $120,000. It is expected this
reduction would cause a reduction in workforce.
- Scenario C — has the greatest impact. Translates to $6.8 million in local cuts to the
schools and general fund (school cut $3.84 million and general fund cut $2.95
million). Proposed cuts could include:
o 20% reduction in outside agency contributions, which will result in a savings
of $600,000.
o Total reduction in workforce by 25 employees. The majority of these would
be public safety employees due to that area employing the most and being
reduced the least over the past two fiscal years. This would bring the total
county workforce reduction over the past three fiscal years to 95 employees or
15 %. This would generate approximately $1.1 million.
o Eliminate the Fire and Rescue Volunteer Length of Service program saving
approximately $80,000.
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Board of Supervisors and Finance Committee Budget Work Session of 01/19/11
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o Reduce local funding to Social Services by $170,000. This would result in a
reduced workforce and reduced state funding.
o Require that the employees' share of VRS be funding by the employee.
Shifting this cost would save an estimated $1 million annually.
Scenario D — reduces the general fund and schools budgets by $2.5 million (general
fund cut $1.08 and schools' cut of $1.4 million. Proposed budget cuts could include:
o 10% reduction in outside agency contributions, which will result in a savings
of $300,000.
o Reduction of public safety workforce of 15 employees saving approximately
$675,000.
o Reduced Social Services' local funding by $105,000. It is expected this
reduction will cause a reduction in workforce.
He went on to say, in the past, we have replenished fund balance by the same amount we have
used to balance the budget. Staff is willing to commit if the Board allows the use of fund
balance and we cannot meet the amount needed to replenish the general fund then it would be
made up through budget reductions.
Supervisor Dove stated he did not mind using fund balance given staff s commitment;
however, he suggested making the amount $2.9 million instead of $4.3 due to the possible $1.4
million personal property refund that is pending.
Vice - Chairman Ewing stated he would like to review the scenarios to see the affect on a
revenue neutral rate.
Administrator Riley reiterated that even Scenario A would involve budget cuts.
Supervisor Collins spoke regarding the proposed cuts to public safety. He noted other
jurisdictions were advertising public safety positions with higher salaries, so there was a need to
be cognizant of losing some employees to those jurisdictions.
In response to a question about a proposed timeline, Administrator Riley responded he
would like to have things wrapped up by the end of February.
Chairman Shickle stated he would like to see some comparative analysis of how
Frederick County compares to other jurisdictions (e.g. population, police officers, budget, etc.).
He would also like to see income levels in Frederick County.
Administrator Riley advised that staff would look at counties of like size (e.g. Fauquier,
Rockingham, Augusta, etc.).
Supervisor DeHaven stated these were tough decisions and he would like to see that
information before the next meeting.
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Board of Supervisors and Finance Committee Budget Work Session of 01/19/11
187
Supervisor Dove stated he would like to see a scenario where fund balance is reduced to
$2.9 million, which would reflect the off -set of the $1.4 million personal property tax appeal.
Chairman Shickle asked what two scenarios people were most interested in considering.
Vice - Chairman Ewing stated he was interested in scenarios A and D.
Chairman Shickle was interested in scenarios C and D.
Supervisor Fisher noted there have been increases in the cost of fuel, energy, food, etc.
He went on to say if we plan to deliver the same services with costs increasing "we can't do it
with the same egg."
Mr. Swiger stated he would like to see detail on the schools' budget.
Treasurer Orndoff asked the school representatives to report on the General Assembly
information they are seeing.
Executive Director of Finance Lisa Frye responded the schools were interested in
crossover day in Richmond. They were watching the VRS issue closely. There is a requirement
that 65% of funding be spent on instruction. Federal dollars are still a big impact. She
concluded by saying the FY 2013 was an unknown at this point.
Supervisor DeHaven stated he would like for the County to share information we are
comfortable sharing with the schools and vice versa.
There being no further discussion, the work session adjourned at 9:15 A.M.
Richard C. Shickle
Chairman, Board of Supervisors
Jo 9� e
r.
erk, Board of Supervisors
Minutes Prepared By: (� 1 4 1-1,
Jay Ik. jibbs
Deputy Clerk, Board of Supervisors
Minute Book Number 36
Board of Supervisors and Finance Committee Budget Work Session of 01/19/11